Tax holiday would kill jobs, not create them

[Donnachaidh]

http://www.dailykos.com/story/2011/10/05/1023069/-Tax-holiday-would-kill-jobs,-not-createthem?detail=hide



The corporate campaign for a repatriation tax holiday continues, with the claim that it would "create jobs" despite the fact that most of said corporations are hiding their American job numbers to help them hide the number of jobs they're moving overseas.

As if we needed more evidence that a repatriation tax holiday would be a very bad idea, the Institute for Policy Studies has a new report explaining just how bad an idea it would be. Some highlights:

* U.S. taxpayers provided a huge subsidy to corporations that destroyed jobs. Following a tax holiday on repatriated foreign earnings in 2004, 58 corporations that benefitted from the holiday slashed a total of nearly 600,000 jobs. These 58 giant corporations accounted for nearly 70 percent of the total repatriated funds and collectively saved an estimated $64 billion from what they otherwise would have owed in taxes.

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* Tax holidays encourage aggressive profit shifting. The shifting of profits offshore has accelerated dramatically since the 2004 tax holiday, suggesting that firms are counting on repeated tax holidays. A year after the 2004 tax holiday, job-destroying corporations had $229 billion in untaxed offshore profits. By 2010, this amount had soared to $696 billion, a 204 percent increase over five years.

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More at the link --

[jmowreader]

1. The thing the Republicans need to explain is...

"The claim is, taxing offshore profits causes job destruction, so a tax holiday on offshore profits is necessary.

If we taxed profits made in the US and repealed taxes on profits earned offshore, wouldn't the job creators simply close as much of their tax-liable US business as they could and move all of that business into tax-free foreign subsidiaries?"

[Cool Logic]

2. Some states in the US are better places to do business than others.

Likewise, some of the world's nations are better than others when it comes to encouraging economic activity.

The world is a lot smaller than it used to be and as a result, when businesses find themselves in a hostile environment, they simply migrate to areas with more temperate climates.