So, 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