cross-posted from Working America's Main Street blog where I am a featured guest blogger
A new jobs bill that the House expects to take up shortly includes a year-end extension of eligibility and continued future funding for all of the expanded federal unemployment insurance and COBRA programs.
Urgent action is needed to pass this legislation quickly, as eligibility for these critical programs is set to expire June 2 unless Congress acts.
More than 10 million Americans currently depend on unemployment insurance while they look for work, including 5.4 million who rely on the federal programs that extend jobless aid to those out of work longer than 26 weeks.
According to the Economic Policy Institute:
Nearly 46% of unemployed workers have been jobless for at least six months, representing the highest long-term unemployment rate in at least six decades. Those workers face dim employment prospects with well over five unemployed workers competing for every available job.
The bill being prepared in the House, H.R. 4213, is now called the Promoting American Jobs and Closing Tax Loopholes Act of 2010, and it includes not only the year-end unemployment and COBRA extensions, but a host of other major provisions designed to bolster jobs and recovery while making wealthy Wall Street traders and corporations finally pay their fair share in taxes. I'll summarize shortly what's reported to be in the bill.
But first, you need to pick up the phone, call toll-free 888-254-5087 and tell your Representative to vote for H.R. 4213 -- the Promoting American Jobs and Closing Tax Loopholes Act.
And tell them they must get this done before the Memorial Day recess.
Go ahead -- I'll wait....
OK, so let's take a look at what we expect to see in this new House jobs bill in addition to the year-end eligibility extensions for the federal unemployment insurance and COBRA subsidy programs.
The bill reportedly will include an extension of FMAP, the federal assistance to states for support of Medicaid, through mid-2011, as well as a one-year extension of the TANF Emergency Fund, which provides funds to states for employment programs and support for needy families.
It includes funding to support more than 350,000 summer jobs for young people ages 16 to 21, an age group that currently faces a 25 percent unemployment rate.
The bill would also support infrastructure investment to create jobs by extending Build America Bonds and other tax credit bonds to spur investment in economic recovery zones.
A five year extension of the so-called "doctor fix" to prevent reductions in Medicare payments, thus ensuring access to physician choice for seniors, is also expected in the bill.
Other provisions would extend the National Flood Insurance Program through the end of 2010; extend affordable small business lending programs and research and development tax credits for businesses supporting American jobs; extend tax relief to middle-class families and individuals; distribute funding for surface transportation projects; and support the National Housing Trust Fund to help build and maintain affordable rental housing.
So, what about the closing tax loopholes part? This is good. Really good.
Significant parts of the bill would be paid for by eliminating the tax incentives that encourage companies to ship American jobs overseas. The bill would prevent corporations from using current U.S. foreign tax credit rules to subsidize their foreign activities, and close a host of corporate tax loopholes that allow companies to avoid paying U.S. taxes through a variety of foreign tax credit schemes.
But here's the best part. You know how working folks are required to pay regular income and employment taxes? Even if you are unemployed you likely have to pay the regular income tax on your unemployment insurance payments. But wealthy investment fund managers don't. No siree. The fees they "earn" are taxed as so-called "carried interest", a tax loophole that allows their income to be taxed at only 15 percent, as if it were capital gains.
Super-rich hedge fund managers, private equity fund managers and other high-flying Wall Street traders pay a much lower tax rate than working people do -- even if you're on unemployment! And taxpayers are left holding the bag for an estimated $2 billion a year in lost revenues due to this one loophole.
Well, they helped bring down the economy while making out like bandits -- and now it's high time they paid their fair share. This jobs bill would close their "carried interest" tax loophole.
The Center for American Progress has a good overview of the expected legislation posted today.
The Center on Budget and Policy Priorities has an excellent report on why the legislation is needed, and why budgetary objections to it are misplaced and economically wrong-headed.