As we’ve been documenting, several multinational corporations (along with their Republican allies) have been pushing Congress to enact a tax repatriation holiday, allowing them to bring money they have stashed offshore back to the U.S. at a dramatically lower tax rate. Usually, money brought back to the U.S. is subject to the statutory corporate tax rate of 35 percent.
The corporations pushing for a tax holiday claim that it will allow them to bring funds into the U.S. that they will invest in domestic operations and job creation. However, Congress approved a repatriation holiday in 2004, only to see companies use the money to line their executives’ pockets. The holiday also encouraged corporations to stash more money overseas, because they figured they could sucker Congress into approving holidays over and over.
The Obama administration, as well as some leading Republicans on the relevant tax committees, have thrown cold water on the tax holiday idea. Not to be deterred, a group of corporations, have launched a new website — WinAmerica — to try to convince policymakers of the wisdom of another holiday. It includes pictures of smiling workers and extols the supposed virtues such a tax holiday would provide.
However, many of the corporate supporters behind the WinAmerica campaign already use the various loopholes and giveaways in the corporate tax code to drastically lower their corporate tax rate. Here’s what these companies begging for a new corporate tax cut currently pay in corporate income taxes:
On their website, these corporations claim “providing American businesses with incentives to invest at home is a common sense solution that will immediately inject up to $1 trillion into our economy and provide businesses with the certainty they need to help get Americans back to work.” However, Kristen Forbes, who was on President Bush’s Council of Economic Advisers when the last repatriation holiday was approved, said that the holiday “didn’t accomplish the stated goals of bringing jobs and investment to the US.’’
The Congressional Research Service actually found that the largest beneficiaries of the last tax holiday cut jobs over the subsequent two years. So while “WinAmerica” might be good for corporations and their executives, it’s undoubtedly a loss for everyone else.
*Tax rate is for 2010 or 2009, depending on the latest data these companies have made available. Cross-posted on The Wonk Room.