ANNOUNCEMENT 20 May 2010In May 2010, the government of the United States of America announced a targeted tax change.
NUMBER OF INTERVENTIONS
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The House of Representatives approved 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 provision was removed from the bill before it was enacted into law in its final form.
The bill, which is designated as H.R.4213, is formally entitled the "American Jobs and Closing Tax Loopholes Act of 2010," included 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 intended 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.