the Joint Committee on Taxation, a nonpartisan congressional research arm, has estimated that a tax holiday, would eventually cost taxpayers about $78.7 billion over the next decade.
Yeah, I read the article. That statement doesn't make sense though. The tax holiday would bring in that much. Are they saying the result is those funds would not trickle in over the next decade? Not trying to be a smart ass or argue for the holiday. I really haven't read enough about this issue to determine if I am in support of it or not.
Over all they let compaines repatriate their money at a tax rate of 5.25 percent (instead of the usual 35 percent)Which is considered lost revenue (They shouldnt have been attempting to hide money over seas anyway).
Might not be a bad deal if it really did make jobs, but instead what we have seen it do in the past is the same companies lay-off workers instead of hiring and they gave the CEO's a raise.
Yeah I seem to have read an article on this topic not too long ago. They tried this already and companies just pocketed the tax break as extra profit or paid it out as bonuses. The intended effect of trying to get companies to bring overseas cash to the US, or to get the to hire more Americans never happened. The inference is that it didn't work the last time we tried it, and it does cost a lot of money, so why do it again?
What was the intent though? Was it soley to create jobs or was it also to bring in needed tax revenue to the government?
$78 billion isn't chump change. Contrary to what the dumbass above you says, corporations are not hiding money overseas. They are legally making money overseas and legally keeping it there. They are not required to bring any of that money home. It just seems to me that these tax breaks, while not perfect, give a pretty strong incentive to bring cash home which the government gets a cut of. Seems better than it sitting else where and not benefiting from it at all. What our government does with any tax revenue received should be of more concern than what these corporations do with THEIR OWN CASH which they LEGALLY EARNED. We can only be hopeful that they invest it domestically, but with the way the current administration is making it harder and more expensive to do business here I can see where all the doubt comes from.
The thought behind the initial amnesty was that the corporate tax rate was causing multi-nationals to earn profits globally, but repatriate all the losses and none of the profits since US tax code permits that. IT was also thought that by keeping this capital off their US ledgers, that it negatively impacted expansion of those corporations in the US. That if they could bring it in at a competitive rate, they would then spend the money here rather than get it taxed again sending it out of the country.
The thought was that it would create jobs, construction, and other such things that go along with expansion.
What it actually did was fill up the war chests, fund executive bonuses, fund "loans" to themselves to pay out dividends, and other fun stuff. The only part that resulted in "expansion" has been using the war chest to acquire other companies. Since they then lay off anyone they didn't want to buy, this expands the buying company slightly while still netting more layoffs.
Ask the executives, and they will tell you "of course we aren't hiring, it's only a temporary tax break."
Which in a way is true. Mostly, the US market is not underserved in any category that can't be outsourced. Outsourcing gets long term lower wages, lower taxes, lower benefit payments, and lower costs of regulatory compliance.
The notion that outsourcing is about taxes is false. All this will do is give a payday to the banks. (Yes, JUST the banks, the businesses ALREADY have that money, just not here.) That payday comes from things like larger dividends payed out, plus they get to leverage the large deposits that make up the war chests I mention above.
zekej3
Correct me if I am wrong, but by the numbers listed in the article wouldn't it bring in $78.75 billion in taxes that wouldn't otherwise have to come in?