Connie Mack: “I rise to introduce the Defense Jobs and Trade Promotion Act of 1998. This bill will eliminate a provision of tax law…”

“I rise to introduce the Defense Jobs and Trade Promotion Act of 1998. This bill will eliminate a provision of tax law which discriminates against United States exporters of defense products. Other nations have systems of taxation which rely less on corporate income taxes and more on value-added taxes. By rebating the value-added taxes for products that are exported, these nations lower the costs of their exports and provide their companies a competitive advantage that is not based on quality, ingenuity, or resources but rather on tax policy. In an attempt to level the playing field, our tax code allows U.S. companies to establish Foreign Sales Corporations (FSCs) through which U.S.-manufactured products may be exported. A portion of the profits from FSC sales are exempted from corporate income taxes, to mitigate the advantage that other countries give their exporters through value-added tax rebates. But the tax benefits of a FSC are cut in half for defense exporters.”