Our sites have more than 200,000 highly targeted visitors every month. With cost-effective marketing solutions to suit any budget, we feel confident that we can deliver the results you need.

Contact us at info@ ustaxnetwork.com or for more information, click here.

The Results Of The AJCA
Eventually, more than USD300bn was repatriated under the Act, although it is not clear that it was deployed as the Act intended.

Resolution Of The EU's Complaint
The EU objected to 'grandfather' clauses in the AJCA; but the issue was resolved in 2006.

The American Jobs Creation Act Of 2004

Under fire to produce legislation which would roll back the FSC and ETI export subsidy regimes which had been banned by the WTO, Congress finally agreed a text which was thought likely to be acceptable to the WTO and the EU only in October, 2004.

The bill, dubbed the "American Jobs Creation Act of 2004," set in train an eventual repeal of FSC-ETI subsidies for around 1,800 firms, and the lifting of European Union tariffs on US exports, and was eventually passed by the Senate in a 69-17 vote after the upper chamber was forced to sit an unusual Sunday session to iron out a dispute relating to a $10 billion buyout of quotas held by tobacco farmers.

The centrepiece of the new legislation was an effective 3% corporate tax cut for ‘qualifying’ US producers and manufacturers - a broad definition which included traditional manufacturers, architects, Hollywood studios, and oil and gas drillers, among other sectors. The reduction, phased in through 2010, eventually benefited around 200,000 firms, saving them $76.5 billion in tax, it is estimated.

A one year ‘tax holiday’ which dropped the corporate tax rate to 5.25% for firms repatriating earnings held offshore also found its way into the final version of the Act. This provision was welcomed by the hi-tech industry, which claimed it would help to repatriate as much as $300 million to the US and create half a million new jobs. Opponents however, criticized the move for effectively rewarding firms for outsourcing jobs overseas.

Another important measure aimed to enable taxpayers residing in states that do not levy an income tax to deduct state sales tax on their federal tax returns for a temporary period. Rules relating to foreign tax credits, interest expense allocation and other items were also simplified under Act in a bid to make US multinationals more competitive overseas.

Controversially, the hefty 650 page bill contained a cornucopia of other unrelated special interest measures designed to benefit a variety of recipients ranging from fishing tackle makers to racetrack owners. It was estimated that the package provided more than $100 billion in tax relief overall, although lawmakers insisted that the bill was revenue neutral to the Treasury through the closure of tax loopholes and other revenue raising measures.

However, perhaps the most crucial measure of all - the repeal of the FSC-ETI legislation - continued to be phased out only over the following three years. Initially, the European Union’s then Trade Commissioner, Pascal Lamy, indicated that the new legislation was unlikely to result in an immediate lifting of EU trade tariffs on US goods.

Whilst welcoming the final passage of the American Jobs Creation Act 2004, Lamy stated that time would be needed for EU officials to thoroughly examine the provisions of the bill and ascertain whether it meets with the Commission’s requirements before the sanctions can be lifted.

“I am pleased that Congress has finally taken this step towards US compliance with the WTO ruling. It vindicates the EU’s patient but firm approach,” Mr Lamy commented. He added: “We will now carefully study the details in the final compromise between both chambers, in particular regarding transition periods, grandfathering clauses, as well as all other relevant fiscal provisions.”

However, subsequent reports showed that a transatlantic rift over government support for the main American and European aircraft manufacturers, namely Boeing in the US and Airbus in the EU, could create complications. “There are a number of issues which are not that clear, for instance on the treatment of options for selling planes. Depending on our findings and the fact that the Boeing issue has surfaced, we will need to see what to do,” noted Lamy. The possible grandfathering of the firm's tax break in relation to future sales was said to be a particular problem.

President Bush duly signed the Jobs Creation Act aboard (Boeing) Airforce One. "This legislation will end the European sanctions on American exports, and it will help promote the competitiveness of American manufacturers and other job creators, and help create jobs here in America," White House spokesman Scott McClellan announced on the campaign trail in Pennsylvania. Contentious 'grandfathering' clauses in the Act, to which the EU strenuously objected, were finally removed by further legislation in 2006.

The Results Of The AJCA
Eventually, more than USD300bn was repatriated under the Act, although it is not clear that it was deployed as the Act intended.

Resolution Of The EU's Complaint
The EU objected to 'grandfather' clauses in the AJCA; but the issue was resolved in 2006.