As part of his campaign to reclaim his old seat, former Sen. George Allen (R-VA) released an economic plan last week that calls for a massive tax cut for corporations, dropping the rate from 35 percent to 20 percent. Touting the plan, Allen made the media rounds, proudly saying his plan would create 500,000 a jobs a year. Here he is trumpeting his plan on Fox Business yesterday:

Considering that economists say the country needs to create 250,000 job a month to bring down unemployment , 500,000 jobs a year is not very many. But more importantly, Allen’s own numbers show that corporate tax cuts are not an efficient way to create jobs.

Dropping the corporate tax rate to 20 percent would cost about cost about $1.3 trillion dollars over 10 years, according to a ThinkProgress analysis of data from the Tax Policy Center, or about $130 billion per year to create 500,000 jobs. That translates to about $260,000 in lost tax revenue for every job created. The median household income in 2009 was only $50,000. This is hardly surprising, considering that the Congressional Budget Office has found that a corporate tax cut “is not a particularly cost-effective method of stimulating business spending” and “does not create an incentive to spend more on labor.”

Despite that tremendous cost, nearly every Republican is calling for big corporate tax cuts, claiming it’s the only way to create jobs. But Allen, inadvertently, admitted that these cuts would have a lackluster result.

Several Congressional Republicans have been promoting the idea of enacting a tax repatriation holiday, which would allow multinational corporations to bring money that they have stowed offshore back to the U.S. at an extremely low tax rate (instead of the usual 35 percent). House Republicans have introduced legislation that would allow corporations to repatriate money at a 5.25 percent tax rate, while House Budget Committee Chairman Paul Ryan (R-WI) said this week that a repatriation holiday is a “good idea” that he’d like to see “every day.”

This comes even though a similar tax holiday in 2004 failed to deliver its promised economic growth or job creation. And other problems with this sort of corporate tax giveaway is that it encourages corporations to shift assets offshore, in anticipation of the next holiday. After all, why pay taxes at 35 percent if you think Congress will keep giving you a chance to pay 5 percent?

Research from Northwestern University has shown that corporations actually moved more funds offshore after the 2004 repatriation holiday, in anticipation of Congress enacting another holiday sometime, and that “by the end of 2006 the total ‘permanently’ reinvested abroad had exceeded the 2004 peak.” In fact, as the Center on Budget and Policy Priorities pointed out, “in each of the three years following the 2004 tax holiday, these companies increased the amounts of new ‘permanently reinvested’ foreign earnings by three times as much, on average, as they had in the each of the ten years before the holiday”:

According to the Joint Economic Committee, a repatriation holiday would cost nearly $80 billion over 10 years. Mitt Romney, Herman Cain, and Tim Pawlenty have all endorsed this corporate tax giveaway.

Our guest blogger is Sidney Shapiro, University Chair in Law at Wake Forest University and Vice-President at the Center for Progressive Reform.

The United States Chamber of Commerce, which spends millions of dollars donated by large corporations to lobby against government regulation, has kicked off a new anti-regulatory road show, starring former Sen. Evan Bayh (D-IN) and Andrew Card, George W. Bush’s former chief of staff. In a press conference at the Chamber yesterday, Bayh bashed “excessive” regulations, saying they “suck the vitality” out of the economy. And in an op-ed today, Bayh and Card laid out their case on behalf of the REINS Act, legislation that would virtually halt new or updated health and safety protections (see here, here, and here) by requiring that Congress vote to approve final regulations before they go into effect.

Their case is not only weak; it is false. Bayh and Card, hewing to the Chamber’s talking points, claim that the economic recovery depends on cutting back on government regulation, because “more regulations impose heavy burdens on job creators.” The answer is to “get Americans back to work by removing excessive and costly regulations that make it hard for businesses to grow.” The available evidence supports neither of these claims.

To support their claim about excessive regulatory costs, Bayh and Card cite a study commissioned by the Small Business Administration’s Office of Advocacy, which claimed that regulations cost $1.75 trillion in a year. That study is popular with anti-regulation advocates, but never stood up to scrutiny. A Center for Progressive Reform report I co-authored details the serious methodological problems with this estimate; 70 percent of which was based on a regression analysis using opinion polling data on perceived regulatory climate in different countries. The nonpartisan Congressional Research Service backed up and expanded upon this critique . In congressional testimony, Cass Sunstein, the President’s point person on regulation, described the statistics now cited by Bayh and Card as an “urban legend.”

As with any type of spending, regulatory compliance generates economic activity. While it is difficult to measure whether on balance job gains from this spending offset any job losses, existing studies (described in congressional testimony I gave) do not support the conclusion that regulation retards economic recovery. Instead, the studies find either no overall impact or, in some cases, an actual increase in employment. Read more

Congressional Republicans have been attacking the Dodd-Frank financial reform law in a variety of ways, including gutting the budgets of the regulatory agencies charged with implementing the law and trying to repeal various pieces of it that they particularly don’t like. In their latest move, Republicans on the House Financial Services Committee yesterday voted to repeal a provision of the Dodd-Frank law that requires public companies to disclose the ratio between the pay of their executives and that of their median worker:

The panel also approved, 33-21, the repeal of an 18-line provision from Dodd-Frank that requires all publicly traded companies to report the ratio between chief executive officer compensation and that of their median employee salary. The provision in Dodd-Frank is “a burdensome regulation that provides no benefit and has substantial costs,” said Representative Nan Hayworth of New York, the Republican sponsor of the bill.

There is plenty of evidence that outsized and poorly designed executive pay at the nation’s biggest banks played a role in bringing about the financial crisis of 2008. As outgoing FDIC Chair Sheila Bair said last year, there is “an overwhelming amount of evidence that [executive compensation] is clearly a contributor to the crisis and to the losses that we are suffering.”

The provision that the GOP repealed is aimed at keeping workers, investors, and shareholders informed of the amount by which the growth in CEO pay is outstripping that of worker pay, in the hopes that transparency will lead to restraint in the growth of executive compensation. Today, American CEOs make 263 times the average compensation for American workers, up from a 30 to 1 ratio in the 1970s. In 2010 alone, CEO pay went up 27 percent while average worker pay went up just 2 percent. Over the last 10 years, as Americans experienced a lost decade for wages, bank CEOs made $19 million per year.

This week, a new report shows that 32 companies in the S&P 500 spent more on pay for their top executives last year than they paid in taxes. Meanwhile, “a mounting body of economic research indicates that the rise in pay for company executives is a critical feature in the widening income gap.” Still, House Republicans are attempting to repeal an extremely modest step towards reining in executive pay by claiming that it “provides no benefit.”

Earlier this week, despite raucous protests from Main Street New Jerseyans, the New Jersey Senate — thanks to the defection of eight Democrats who sided with the GOP — passed S-2937, a bill Gov. Chris Christie (R) backs that would ask the state’s half a million public employees to pay dramatically more for their health care and pension costs and limit the ability of public employees to negotiate over their health care packages.

Today, the New Jersey Assembly is expected to vote on its version of the bill. Speaking to the New York Times about the bill, Bob Master, who is the political director at the Communications Workers of America, District 1, noted that the bill would perversely ask teachers to pay more than upper-income earners were asked to pay in a tax that was rescinded in 2010:

Bob Master, political director of the Communications Workers of America, District 1, which represents most state workers, points to the inverted math. Under the tax surcharge rescinded in 2010, a couple who made $750,000 would have paid about $4,800 a year, or slightly less than a teacher making $65,000 will be forced to pay in higher health care and pension payments under the new plan.

Indeed, the so-called “millionaire’s tax,” which New Jersey eliminated in 2010, increased taxes for upper-income earners by less than 2 percent, and the number of millionaires in the state actually grew while the tax was in effect. But it now appears that New Jersey is on the path to demand that teachers and other hard-working public workers pay more of their income for health care and pension plans — 5 to 10 percent by some estimates — than the state’s richest had to pay under the now-expired tax.