|
"A comprehensive, collaborative elections resource."
|
Repatriation Tax Holiday Would Increase Deficits and Push Investment Overseas
|
Parent(s) |
Issue
|
Contributor | ArmyDem |
Last Edited | ArmyDem Oct 13, 2011 02:23pm |
Logged |
0
|
Category | Analysis |
News Date | Wednesday, October 12, 2011 08:00:00 PM UTC0:0 |
Description | Proponents Are Distorting Joint Tax Committee Analysis
By Chuck Marr, Brian Highsmith, and Chye-Ching Huang
October 12, 2011
Despite proponents' claims to the contrary, a proposal to enact a second tax holiday for the profits that U.S.-based multinational corporations bring back to the United States from foreign accounts would cost tens of billions of dollars in federal revenue — boosting deficits and debt – while not achieving its proponents' promise of more jobs and higher investment in the United States.
Its cost is particularly troubling given the high expectation of failure. In recent days, leading private analysts have raised serious doubts about the proposal. Goldman Sachs concluded that, with a holiday, "we would not expect a significant change in corporate hiring or investment plans." [1] Fitch Ratings added that a holiday would not likely "support growth-oriented investment by U.S. firms."[2] A holiday also would violate the "do-no-harm" rule because it ultimately would encourage corporations to shift investment, profits, and jobs overseas.
Proponents, part of a massive lobbying campaign for the tax holiday, are distorting an analysis by the congressional Joint Committee on Taxation (JCT) on the proposal's budgetary impact. JCT found that the proposal would boost revenues initially, as companies took advantage of the holiday to repatriate some profits they otherwise would have kept overseas for a number of years. But, JCT explained, the proposal would also reduce revenues by giving companies a large tax break for those profits they would have repatriated anyway in the next few years, even without the holiday, and by giving companies a strong incentive to shift more profits overseas in the future, in anticipation of future tax holidays. JCT found that the net impact of these three different revenue effects would be to reduce revenues by $79 billion over ten years. |
Share |
|
2¢
|
|
Article | Read Full Article |
|
Date |
Category |
Headline |
Article |
Contributor |
|
|