Congress eyes increasing corporate welfare via another ‘tax holiday’ [View All]

Congress eyes increasing corporate welfare via another ‘tax holiday’

Did you know that the Obama administration – fueled by about two dozen Republicans in Congress and the lobbyists for Microsoft, Oracle, Pfizer, Apple and several other major firms – are pushing for a corporate tax “repatriation” holiday? The plan is to give select multi-national corporations “special dispensation from tax laws” on the more than $1 Trillion in cash the companies are storing in overseas banks that isn’t subject to the statutory 35 percent corporate tax rate.

The pitch is that if the companies will bring that cash back to the United States – with no fear of being taxed on it – then the companies will use that money to create jobs. Members of a very Wall Street-friendly think tank are touting the idea as yet another “stimulus” to create jobs – even though not one supporter of the plan has been willing or able to show exactly HOW this tax break will create a single job.

The plan is widely viewed by economists, tax experts and hundreds of thousands of small business owners as yet another useless government giveaway to a handful of multinational corporate behemoths in the never-ending corporate welfare of Washington.

The trouble is, this has been done before, and it didn’t work. In 2004, Congress approved almost the exact same plan. A total of 364 companies brought back $284 billion of overseas cash for the 2004 tax holiday. But even during the economic boom years of the housing bubble, the fresh cash did not create new jobs or investments. Instead, companies simply used the cash to enrich their shareholders, using the money to buy up their own stock, driving share prices higher.

http://www.watchblog.com/thirdparty/archives/007595.html