A new tax credit proposed by U.S. Sen. Dick Durbin (D-Ill.) would reward companies that pay workers higher wages, and don’t leave the country.
Durbin calls it the Patriot Employer Tax Credit. In order to qualify, employers have to maintain or increase the number of jobs they have in the U.S., pay almost all their workers $14 per hour or more, and provide retirement and health benefits. To pay for the tax reduction, Durbin wants to reduce tax deductions companies can take when closing operations in the U.S.
“We’re creating some incentives for the wrong things,” Durbin said. “There should be no incentives in the U.S. tax code to ship jobs overseas. Currently, we have them.”
Durbin says those credits cost about $50 billion per year, and claims it forces more people to rely on government assistance. The new tax credit would be worth about $1,200 per worker, depending on the company’s federal tax rate.
Durbin is introducing the bill in the Senate this week, but admits that it’s not likely to be considered until next year as part of broader tax reform.