Corporations and their lobbyists are pressuring Congress to reinstate Bush's taax holiday for corporations to bring home offshore profits at a lowered 5.25 tax rate. Apple would like to shake 12 billion from their offshore tree. Microsoft's ofshore accounts compute to around 29 billion, and ask Google if they want to retrieve their 17 billion out there in cyberspace.
Money is power, so it just might happen again as it did in 2005 when President Bush and Congress appeased corporations with a tax holiday at a one year 5.25 tax rate. Companies with huge assets offshore were offered the opportunity to return $312 billion back to the United states with a much lower tazx rate and stimulate the job market. However, the majority of that money that returned to the country, a whopping 92%, was returned back to stockholders in the form of dividends and stock buybacks (National Bureau of Economic Research)
Hiring and job creation remained flat.
The truth is that the companies pushing the hardest for the next tax break are the ones sitting on billions in cash right here in the United States that they could readily use to hire if they so chose.
According to fromer labor Secreatry Robert Reich, between 1980 and 2011, the Anerican economy has doubled in size, but where has all that money gone.? Almost all the gains have to to the Super Rich.
1. The top 1% who used to take home 10% of the wealth, now take home more than 20%. The Super Rich hold 40% of the nations wealth.
2. The Super Rich have the political power to lower their tax rates from 70% to less than 35%. But because much of their income is capital gains, they are taxed at only 145%. According to the IRS, the richest 400 Americans pay only a 17% income tax rate.
3. Wages have barely increased with adjustments for inflation
4, Revenues are down to less than 15% resulting in huge budget deficits.
"This is about creating jobs," Rep. Kevin Brady, R-Texas said when introcducing the Tax Holiday bill this Spring. Jobs. The word that was dangled like a tank of oxygen before a gasping population of unemployed in order to pass the extension of tax credits for the 2% of the wealthiest Americans who live up where the air is rarified. It was supposed to create jobs and resuscitate the economy. We're still wheezing out here. Because statistics prove that as long as stockholders, executives, and politicians continue to grow their own record profits and accumulate wealth in the exclusive dynamic of the laslt 30 years, there will be little effect on jobs, the working middle class, or the economy.
The tax holiday is just one more Corporate conciliation, one that rewards companies, once again, for moving jobs and investments overseas.
