Several multinational corporations, under the banner of a campaign known as “WinAmerica” having been pushing Congress to enact a tax repatriation holiday, which would allow corporations to bring money that they have stashed offshore back to the U.S. at a dramatically lower tax rate than the 35 percent that they would usually pay. Rep. Kevin Brady (R-TX) has obliged these companies by crafting a bill that would grant corporations a 5.25 percent tax rate on repatriated money.
However, Brady doesn’t necessarily see this as a tax break, according to a statement he gave to Reuters:
“As this economy continues to struggle, I think our case gets stronger every day,” said Republican Representative Kevin Brady, author of a repatriation tax holiday bill backed by 15 Republicans and eight Democrats in the House of Representatives.
“Lowering that tax rate for a year to bring those dollars home, people don’t understand why we’re not doing that. Some may view it as a tax break, but others just see these stranded profits that could do a lot of good things,” Brady said.
The rationale behind this particular policy is that corporations will use the money that they repatriate to invest domestically and create jobs. However, as we’ve noted time and again, a repatriation holiday in 2004 was a complete flop on that front: the companies who benefited most from the tax break wound up cutting jobs, and corporations began parking more money offshore in anticipation of future tax holidays.
The corporations pushing for a repatriation holiday already pay extremely low taxes. Adding insult to injury, the companies lobbying hardest for the holiday won’t even disclose how many jobs that have overseas.
According to the Joint Economic Committee, another repatriation holiday would cost about $80 billion. But to Brady, only “some” people think that’s a tax break. Well, count us amongst them.