This is the letter I sent today to Congressional revenue and budget committees on Senator Schumer's attempt to do a corporate income tax holiday so that multi-nationals can repartriate their profits. Why is this bad? Because currently dividend taxes are at historic lows and are due to go up to normal income levels automatically at the end of next year.
My proposal is than any repatriation should be offset by raising those dividend tax levels NOW!
If there were ever an issue for Occupy America to take up, this is it.
Here is the text of my letter. Feel free to copy and send it to your Senators (especially Senator Schumer), Representatives and the relevant committees:
I write today to urge the Committee to strongly object to any corporate payroll tax holiday to allow repatriation unless it is offset by an immediate increase in dividend tax rates to their statutory levels. Such tax holidays have never been shown to do much for hiring - they are mostly paid out in dividends.
I can understand the rush to do this now, because dividend rates are going back to normal income levels in 2013. This is exactly why no tax holiday should take place until after 2013, so that this revenue is not lost to the Treasury.
This action would be a temporary provision to fund a temporary action because the 15% rate expires anyway, so there can be no objection that temporary stimulus is being funded by a permanent tax change.
Wealthy individuals are already spending without restraint, they do not need tax benefits to spend more and most corporations are flush with cash, so not further investment is required either. There is no downside for the economy in recouping some of these repatriated dollars through taxes.
Thank you for the opportunity to share these views on this emerging topic.