United States of America: Subsidy to tuna canner
Description
The House of Representatives has approved, and the Senate may soon take up, a wide-ranging tax bill that includes an item that may lead to the extension of millions of dollars in subsidies to the StarKist tuna operations in American Samoa. The bill, which is designated as H.R.4213, is formally entitled the "American Jobs and Closing Tax Loopholes Act of 2010." It includes a provision (section 270) directing the Treasury to "pay $18,000,000 to the Government of American Samoa for purposes of economic development." That provision was inserted at the request of Congressman Eni Faleomavaega, a non-voring representative of American Samoa in the U.S. Congress. Congressman Faleomavaega argued that this sum is needed to offset the monies that used to be returned to StarKist as a refund of its taxes, but there have been no refunds of late because StarKist's operations in Samoa have been unprofitable.
As written, the bill provides that this money will be transferred from the Federal government to the Government of American Samoa. Congressman Faleomavaega nevertheless intends to have the money converted into an operating subsidy for StarKist, as noted in a press release he issued on May 20, 2010. In that release he said that,
Because StarKist would have been entitled to ... tax credits worth up to $18M if it had been operating at a profit, the money we have now been able to set aside as a direct payment to [the Government of American Samoa] is intended to be used to put our tuna cannery workers back to work at StarKist Samoa. This is why I will be entering in to discussions with the U.S. Department of Treasury, [the Government of American Samoa] and the Fono [the Samoan legislature] to make sure the funds are used for their intended purposes.
In the same press release, Congressman Faleomavaega noted that "StarKist, American Samoa’s largest private-sector employer, is operating at a loss because it can no longer compete against low-wage rate countries like Thailand that pay fish cleaners $0.75 cents and less per hour," and that, "Without help, StarKist will be forced to close its operations in American Samoa."
Both chambers of Congress had already approved earlier versions of the bill. The provision in question was added to the final, reconciled version (i.e., the compromise version negotiated between the House of Representatives and the Senate). The House of Representatives approved this compromise version by a vote of 245-171 on May 28, 2010. The bill now requires a final vote in the Senate. If it is approved in the upper chamber, it will then go to President Obama for his signature.
Any Evidence-Based Deliberation:
| Question | Result |
|---|---|
| Is there anything in the public record to suggest that evidence of the effectiveness of the proposed measure was considered during official deliberations? | No |
| Is there any evidence that alternatives to the proposed measure were considered? | No |
| Is there anything in the public record that suggests that empirical evidence informed the comparison across the alternatives available to government? | No |
| Was such evidence identified? | No |
| Is such evidence publicly available? | No |
| Did the official decision-maker in question provide an explanation as to why a chosen measure was favoured over alternatives? | No |
| Is there any evidence to suggest that potentially affected trading partners were consulted before the measures were taken? | No |
| Is there any evidence that safeguards have been put in place to ensure that implementation of the initiative is transparent and non-discriminatory? | No |
| Did the government state its intention to review the measure within one year of implementation? | No |
Date Discovered:
Implemented: No
Date of inception:
GTA Evaluation: Amber
Source:
See the hyperlinked items in the description.
Government Response:
- 138 reads
