Date: June 20, 2012

Author: JT

Tags: , , , , ,

2 Comments »

Why We Should Have Another Tax Holiday for the Rich

jtpedersen_tax holiday_global_competitiveness_tax_rateSo, why should we consider another tax holiday for the wealthiest among us?  Why should we allow money earned overseas by large (and small) corporations to come home, here to the U.S., at a reduced rate?

Fundamentally, it comes down to global competitiveness.

Bloomberg has a pretty straight-forward discussion on the topic (http://bloom.bg/LCqVKh). Here are the salient pieces:

Under current law, American companies can defer federal income taxes on most overseas earnings indefinitely. When they do return to the U.S., they’re taxed at the corporate rate of 35 percent — with credits for foreign income taxes paid.

and, “…foreign competitors are allowed to repatriate foreign earnings at rates of 0 to 2 percent.

Regardless of which side of the argument you’re on (pro/con tax holiday), I think Cisco’s Chambers addresses the crux of the problem well. He has, “…made the case for the tax break, saying it would help overcome a corporate tax system he calls “a dinosaur” and put more than two million Americans back to work.

As we speak, the Fed is debating how to push more and more money into circulation to get things moving again. As long as corporate earnings reside offshore, they’re doing none of us any good. Why not put the Fed at bay and, rather than ‘print more money,’ allow more of what already exists to reenter the market locally?

What do you think?

image credit: Vince Petaccio

2 Responses to “Why We Should Have Another Tax Holiday for the Rich”

  • Chuck Jackson June 21, 2012 at 12:10 pm

    Clearly, the rich are talking Global competitiveness when it bebfits them. Now it the time to do the Patriotic thing and invest in America. We no longer have Patriots when it comes to Non- Second Amendment issues. No other country gives its citizens the freedoms that we do and Freedom is not Free! How many of their sons and daughters fought in Aphganistan or Iraq. The lower socio-economic groups are taking it from all sides, while the rich have the full benefits of citizenship. The Pursuit of Hapiness is truly better for them.

  • Andrew Stein June 21, 2012 at 1:46 pm

    In the study of economics, I think that the hesitancy to bring offshore-earned money back onshore, based on tax laws…, is what is called “unintended consequences.” Seems like the law is flawed, at its core.

%d bloggers like this: