By Sam Goldfarb, CQ Staff

Republicans are struggling to unify behind a tax cut strategy to boost the economy, a marked departure for a party that usually marches in lock step on tax issues.

After a summer break filled with constituent worry over the slump in the jobs market, GOP lawmakers agree that the tax code needs to be revamped to encourage economic growth. But so far, they cannot seem to agree on how.

Republicans have shown little enthusiasm for a small-business tax break proposed by their own leadership, have reacted uncertainly to tax cuts proposed by President Obama and have continued to be at odds over whether multinational corporations should be given temporary tax relief on the earnings they bring to the United States from other countries.

In addition, although Republicans agree that the tax code should be overhauled by eliminating tax breaks and lowering overall rates, they have sent decidedly mixed signals about whether such a rewrite should bring in additional revenue.

To be sure, Republicans have not abandoned their basic anti-tax argument. Nevertheless, a philosophical divide has emerged within the party, pitting some GOP lawmakers — who believe the economy could respond favorably to temporary tax measures — against more traditional conservatives, who argue that only a simplified tax code will encourage businesses to make investments and create jobs.

A key member of the group that supports aggressive, immediate action is House Majority Leader Eric Cantor. For much of the year, the Virginia Republican has made the case for a so-called “repatriation tax holiday.” Such a measure would drop the U.S. tax on most foreign business earnings from 35 percent to 5.25 percent for one or two years.

Currently, companies can avoid paying U.S. tax on foreign earnings as long as those earnings are kept offshore. Some lawmakers and tax experts argue that multinational companies would bring their cash back to the U.S., and spend it on domestic efforts, if the repatriation barrier were temporarily lifted.

Many U.S. multinational companies have been lobbying for this kind of tax relief, and the U.S. Chamber of Commerce released a study last week that found a repatriation tax holiday could help the economy grow by an additional 1 to 4 percent.

As with similar previous reports, the Chamber’s findings were trumpeted by Cantor aides but elicited little reaction elsewhere. A red flag for some Republicans may have been that the Chamber used economic modeling techniques similar to those used by the Congressional Budget Office to analyze the economic impact of the 2009 stimulus law (PL 111-3), which Republicans view as a failure.

Another concern is that temporarily reducing the tax on foreign earnings could lead more U.S.-based companies to move to other countries in anticipation of future tax holidays, as was found to have occurred after the last repatriation tax holiday was enacted in 2004.

Many Republicans, though, simply view all forms of short-term tax policy as counterproductive.

“We need fundamental and permanent tax reform,” said Ways and Means member Charles Boustany Jr., R-La. “There are too many temporary measures in the tax code, and this creates uncertainty and makes it difficult for businesses to plan, to hire, to deploy capital in future investments.”

That same sentiment also spells trouble for another initiative being pushed by Cantor. He and other House GOP leaders have proposed a 20 percent tax deduction for businesses with 500 or fewer employees. Unlike a repatriation tax holiday, this proposal has the explicit support of Speaker John A. Boehner, R-Ohio, but it remains to be seen whether more Republicans will get on board.