July 19 (Bloomberg) -- The Senate blocked a Democratic tax proposal designed to make it more difficult for companies to move jobs out of the country and easier to bring jobs to the U.S.
The 56-42 vote today, with 60 needed to advance the measure, was largely along party lines as most Republicans voted not to allow Senate consideration.
The bill would have prevented companies from deducting the cost of moving operations out of the U.S. It offered a 20 percent tax credit for companies’ expenses in moving investments from another country to the U.S.
The current policy is “the height of insanity,” said Senator Richard Blumenthal, a Connecticut Democrat.
Compared with the $15.5 trillion U.S. gross domestic product or the $2.5 trillion the government is collecting this year in tax revenue, the bill would have a relatively small budgetary effect.
Eliminating the tax deduction would raise revenue by $168 million over 10 years and the tax break would cost $255 million, according to the nonpartisan Joint Committee on Taxation, said Cullen Schwarz, a spokesman for Senator Debbie Stabenow, a Michigan Democrat who sponsored the proposal.
Democrats scheduled the vote on the bill as President Barack Obama and Republican presidential candidate Mitt Romney are trading accusations about outsourcing and the effects of their proposals on job creation.
The outsourcing bill is S. 3364.
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