Corporations are looking for a way to return overseas profits to the United States under a program that would tax those profits at a paltry 5.25%, instead of the current rate of 35%.
The argument goes like this.
Corporations and their lobbyists say the tax break could resuscitate the gasping recovery by inducing multinational corporations to inject $1 trillion or more into the economy, and they promoted the proposal as “the next stimulus” at a conference last Wednesday in Washington.
“For every billion dollars that we invest, that creates 15,000 to 20,000 jobs either directly or indirectly,” Jim Rogers, the chief of Duke Energy, said at the conference. Duke has $1.3 billion in profits overseas.
There's just one problem with this proposal. It's a lie. Back in 2005 these very same corporations convinced the easy-to-convince Bush administration to provide a similar profit repatriation scheme. Guess what happened?
But that’s not how it worked last time. Congress and the Bush administration offered companies a similar tax incentive, in 2005, in hopes of spurring domestic hiring and investment, and 800 took advantage.
Though the tax break lured them into bringing $312 billion back to the United States, 92 percent of that money was returned to shareholders in the form of dividends and stock buybacks, according to a study by the nonpartisan National Bureau of Economic Research.
Yep. That worked out
so well. Tell corporations to
pay their fair share.
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