Congress eyes increasing corporate welfare via another ‘tax holiday’

[FreakinDJ]

Congress eyes increasing corporate welfare via another ‘tax holiday’

Did you know that the Obama administration – fueled by about two dozen Republicans in Congress and the lobbyists for Microsoft, Oracle, Pfizer, Apple and several other major firms – are pushing for a corporate tax “repatriation” holiday? The plan is to give select multi-national corporations “special dispensation from tax laws” on the more than $1 Trillion in cash the companies are storing in overseas banks that isn’t subject to the statutory 35 percent corporate tax rate.

The pitch is that if the companies will bring that cash back to the United States – with no fear of being taxed on it – then the companies will use that money to create jobs. Members of a very Wall Street-friendly think tank are touting the idea as yet another “stimulus” to create jobs – even though not one supporter of the plan has been willing or able to show exactly HOW this tax break will create a single job.

The plan is widely viewed by economists, tax experts and hundreds of thousands of small business owners as yet another useless government giveaway to a handful of multinational corporate behemoths in the never-ending corporate welfare of Washington.

The trouble is, this has been done before, and it didn’t work. In 2004, Congress approved almost the exact same plan. A total of 364 companies brought back $284 billion of overseas cash for the 2004 tax holiday. But even during the economic boom years of the housing bubble, the fresh cash did not create new jobs or investments. Instead, companies simply used the cash to enrich their shareholders, using the money to buy up their own stock, driving share prices higher.

http://www.watchblog.com/thirdparty/archives/007595.html

Cantor and Boner are placing this squarely On the Table

[Newest Reality]

1. Yeah!

Go, go, Corporatist Party!!!

We pledge our personal wealth and power to the United Corporations of America Inc. All hail the Supreme Board of Directors.

Wewin/Ulose 2012: Serf the Apocalypse!

[moondust]

2. It's bullshit.

In an attempt to “revive profit,” corporate giant Cisco Systems is expected to announce that it’s laying off 10,000 workers, or 14 percent of its workforce:

The cuts include as many as 7,000 jobs that would be eliminated by the end of August, said the people, who asked not to be identified because the plans aren’t final. Cisco, based in San Jose, Calif., is also providing early-retirement packages to about 3,000 workers who took buyouts, the people said. <...> Eliminating jobs will help Cisco wring $1 billion in expenses in fiscal 2012, the company said in May.

The news comes at the same time that Cisco is lobbying Congress for a huge corporate tax break in the form of a repatriation holiday, which would allow companies that have stashed money offshore to bring it back to the U.S. at a much lower rate than they would normally pay. As ThinkProgress has reported, Cisco is part of a group of corporations called WinAmerica that continue to lobby for a repatriation holiday, even as the companies already pay extremely low taxes. Cisco, for instance, has paid an effective tax rate of 19.8 percent — far below the statutory corporate tax rate of 35 percent. Additionally, Cisco has dodged $7 billion in taxes since 2005.

Ironically, WinAmerica corporations are pushing for a tax holiday based on the 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, and data show that the companies that benefited most wound up cutting jobs in subsequent years, laying off tens of thousands of workers. The news that Cisco is laying off 10,000 American workers to boost their bottom line is further proof of just how empty the claim still is.

http://thinkprogress.org/economy/2011/07/12/266090/cisco-to-shed-10000-jobs-while-asking-for-giant-corporate-tax-break/

[RaleighNCDUer]

3. Corporate cash does not create jobs.

DEMAND creates jobs. People having money and wanting to spend it creates jobs.

You want to create jobs? Take that trillion dollars and distribute is across 90 million American households so they can SPEND it.