STOCK MARKET WATCH, Friday, December 16, 2011

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39. study: past corporate tax holidays led to little job creation ...

http://www.nationofchange.org/study-past-corporate-tax-holidays-led-little-job-creation-just-helped-corporate-rich-get-richer-1323

study: past corporate tax holidays led to little job creation just helped the corporate rich get richer

A group of cor­po­ra­tions known as Win Amer­ica has spent much of 2011 ad­vo­cat­ing for a cor­po­rate tax repa­tri­a­tion hol­i­day, a pe­riod of time in which the typ­i­cal 35 per­cent cor­po­rate in­come tax usu­ally levied when over­seas funds are brought back to the United States would be low­ered in an ef­fort to stim­u­late job cre­ation and do­mes­tic in­vest­ment. Such ad­vo­cacy has been quickly adopted by anti-tax Re­pub­li­cans, who have made the hol­i­day a key plank in their eco­nomic plat­form.

The only prob­lem with the pro­posal, how­ever, is that there is lit­tle ev­i­dence from past hol­i­days that an­other such re­prieve from the repa­tri­a­tion tax would have a sub­stan­tial im­pact on ac­tual job cre­ation. A new study con­ducted by pro­fes­sors at the Uni­ver­sity of Texas, Syra­cuse Uni­ver­sity, and the Uni­ver­sity of Hous­ton, in fact, found that the 2004 ver­sion of a repa­tri­a­tion hol­i­day had lit­tle ef­fect on job cre­ation, aid­ing cor­po­ra­tions that al­ready had the means to cre­ate jobs while help­ing “the cor­po­rate rich” get even richer, Ac­count­ing Today re­ports:

'The new re­search finds that the AJCA mostly ben­e­fited rel­a­tively ma­ture com­pa­nies that had had the means to in­vest and cre­ate jobs all along with­out the fi­nan­cial boost pro­vided by the leg­is­la­tion. The leg­is­la­tion did not even sig­nif­i­cantly ad­vance a less in­tensely pro­moted pur­pose of the bill: to en­able com­pa­nies bat­tered by a re­cent re­ces­sion to strengthen their bal­ance sheets.

“In essence, the cor­po­rate rich got richer, and, al­though the cor­po­rate needy and fi­nan­cially stretched may not have got­ten poorer, they de­rived rel­a­tively lit­tle ad­van­tage from the bill,” said Mills.'


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