No Holiday
NYT editorial
Big business has clearly decided that the economic crisis is too important to waste. While Washington debates how to create jobs and cut the budget deficit, major corporations — read major campaign contributors — are pushing Congress for an enormous tax cut on corporate profits. Lawmakers seem all too eager to grant their wish.
Specifically, multinational corporations — including Cisco, Pfizer and Qualcomm — want a temporary “tax holiday” that would allow them to bring foreign-held earnings back to the United States at a vastly reduced tax rate.
A bill in the House would tax repatriated earnings at 5.25 percent, a fraction of the usual rate of 35 percent; a bill in the Senate would cut the rate to 8.75 percent, or 5.25 percent for companies that added jobs.
The corporations say a tax holiday would help to create jobs, mainly by giving them money to hire and expand. But the National Bureau of Economic Research, the Congressional Research Service, and private researchers concluded that the last tax holiday, enacted in 2004, largely failed to spur investment or job growth. Companies spent most of the repatriated $300 billion on dividends and stock buybacks, enriching executives and shareholders.
(More here.)
Big business has clearly decided that the economic crisis is too important to waste. While Washington debates how to create jobs and cut the budget deficit, major corporations — read major campaign contributors — are pushing Congress for an enormous tax cut on corporate profits. Lawmakers seem all too eager to grant their wish.
Specifically, multinational corporations — including Cisco, Pfizer and Qualcomm — want a temporary “tax holiday” that would allow them to bring foreign-held earnings back to the United States at a vastly reduced tax rate.
A bill in the House would tax repatriated earnings at 5.25 percent, a fraction of the usual rate of 35 percent; a bill in the Senate would cut the rate to 8.75 percent, or 5.25 percent for companies that added jobs.
The corporations say a tax holiday would help to create jobs, mainly by giving them money to hire and expand. But the National Bureau of Economic Research, the Congressional Research Service, and private researchers concluded that the last tax holiday, enacted in 2004, largely failed to spur investment or job growth. Companies spent most of the repatriated $300 billion on dividends and stock buybacks, enriching executives and shareholders.
(More here.)
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