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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.
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.
One noteworthy example is General Electric, which cut its U.S. workforce by 32,000 between 2004 and 2010. General Electric repatriated $1.2 billion in 2004, but today has more than $94 billion stashed offshore, the highest amount of any U.S. company. If GE were to repatriate the entire sum at the proposed rate of 5.25 percent, it alone would save an estimated $28 billion from the proposed tax holiday.
A tax giveaway to corporations that followed it up by cutting jobs? Let's do that again! Sadly, this isn't just Republican logic—some Democrats, like Chuck Schumer, have indicated support of it despite the evidence it would be bad for the economy.
The Institute for Policy Studies suggests that, aside from refusing to pass another tax repatriation holiday, the government should make corporations report their U.S. employment information before getting any allegedly job-creating tax relief, and Congress should pass the Stop Tax Haven Abuse Act.