I can’t figure out what’s wrong.
I have consistently inveighed against the idea of providing our multinational corporations the opportunity to bring their foreign profits back to our shores at a much reduced tax rate. It doesn’t help with jobs or growth—last time they used the hundreds of billions in proceeds from the tax break to buy back their own stock, or they increased their dividend payouts. And it would cost the Treasury $80 billion over 10 in terms of forgone revenue.
Yet despite at least two or three blogs on the topic, it hasn’t died. It must be this: it’s a chart by Bloomberg showing the Congressional and White House roots of the lobbyists pushing for the tax break.
It’s an ugly picture. But I’m sure there’s nothing unusual about this aggregation—I suspect any bill that doled out some serious goodies like this would attract a similar crowd.
But it allows me to stop wondering why my blogs haven’t won the day on this yet.
(You know I’m kidding about that, right…?)
Does it make you feel any better that the Heritage Foundation agrees with you?
http://blogs.wsj.com/economics/2011/10/03/heritage-repatriation-tax-holiday-wont-create-jobs/
Don’t I remember something about concentrated interest groups beating the diffuse public interest every time? Especially when they have a lot of money.
Corporations already choose to hold much of their international income overseas to avoid paying taxes in the United States. If corporations believe that such in-shoring opportunities will appear on a regular basis, it stands to reason that they will become even more reluctant to realize this income during the out years. Periodic tax holidays seems like the worst possible design for managing corporate taxes. High statutory rates, low effective rates, and large incentives to distort the policy-making process!
“High statutory rates, low effective rates, and large incentives to distort the policy-making process!” The more time and money is wasted on rigging the corporate tax system the more I am moving to the idea of replacing the revenue from corporate taxes completely (possible replacements: national sales tax, financial transaction tax, dividends and capital gains as regular income, etc.). Any corporate subsidies should be on the spending side so everyone is clear it is “welfare” for certain industries. This would have the double benefit of drying up a major source of campaign cash for Republicans.