Should companies get a tax holiday?
Supporters say giving companies a break on repatriating foreign profits would help the economy.
Companies have as much as $1 trillion in profits stored abroad. They want to bring that money to the United States but don't want to pay taxes at current corporate rates, which max out at 35%. Some politicians are pushing for a tax holiday similar to one granted in 2004, which allowed corporations to bring back money at a 5.25% rate, The Hill reports.
Even a former union chief supports the move. Check out the following interview with Andy Stern, who formerly led the Service Employees International Union, about why he supports a tax repatriation holiday.
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Not everyone is in favor of the tax holiday. Some groups, including those representing small businesses, say it's unfair to give big corporations a break. "When powerful large U.S. corporations avoid their fair share of taxes, they undermine U.S. competitiveness, contribute to the national debt and shift more of the tax burden to domestic businesses, especially small businesses that create most of the new jobs," the group said in a letter to lawmakers this week.
Companies are very good at playing international tax laws in order to get the best rates possible, the letter added. Dodging taxes ultimately undermines the U.S. economy; instead, everyone needs to play by the same rules.
The 2004 tax holiday returned money to corporate owners, chief executives and shareholders, the letter said. One report found that a $1 increase in repatriated profits resulted in an increase of nearly $1 in shareholder payouts.
But supporters of the tax holiday say the money will help create some new jobs -- how many is unclear -- and will help revive the economy.
Nice try. These big companies squirrel away money overseas to avoid taxes and now want a pass to bring it back here to use. No way. If this gets approved its just a payback to big corporate contributors to politicians.
A better idea, considering that small business creates over 65% of all jobs in this country, give small business and the working man a tax holiday and lets get this tax money on the street for the consumers to spend at small businesses. This puts money in the pocket small business owners who will see more customers and begin hiring. That will end this recession.
Instead how about giving companies a tax break who manufacture 100% of their product in the USA. This would benefit the investors and the people who need jobs and both pay taxes. Just make sure the contract is written so they can't close the plants in a few years after taking a tax break.
really? A tax holiday for companies like GE who somehow gimmick their way into zero tax liabilities (heck they even get a tax credit!!). Get real!! This would only make sense if that money was forced to be invested within the US (i.e., to create more jobs) and not to dole out as more money to CEOs and a few rich chumps. Also why is "zero" tax even allowed; the average Joe even gets hit with the Alternative Minimum Tax (ATM). Why can't we have an ATM for corporations like GE that engineer their way into zero taxes.
I am all for capitalism and helping businesses but it is sickening to see these large organizations refuse to pay their dues; I personally believe such behavior is un-patriotic and I have not problem boyconting such companies.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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