from ataxingmatter by Linda M Beale: (a great blog!)
…Michael Dell has a particularly interesting “problem”. Like most high-technology companies, Dell has avoided a lot of US tax by offshoring and claiming its profits in offshore tax havens rather than in the US. So it has more than $14 billion of highly liquid assets in offshore affiliates and not here…
We shouldn’t allow that, but fixing it would require real corporate tax reform, not the stuff that commissions and Congress blather on about most of the time, like “lowering tax rates” and “simplifying the tax code”, both of which are nonsensical when it comes to corporate multinationals who pay incredibly low effective tax rates already and who will use any “simplification” as just another invitation to exercise their sophisticated tax skills at manipulating the Code for their private tax advantage.
…And under the Bush Administration, when Congress and the Treasury seemed to be motivated primarily by seeing how fast they could give away tax breaks to corporate business through the tax code, Congress enacted one of its most foolhardy tax expenditures that especially benefited corporations that had been “bad” tax citizens–the 2004 misnamed “American Jobs Creation Act” that allowed the bad companies that had offshored their profits to avoid tax…–the so-called “repatriation holiday” provision. As usual, the right-wing claimed that these corporate tax breaks would create jobs. They didn’t (as shown by Bush’s dismal job creation record, even before the onset of the great Recession). Instead, they were used for corporate stock buybacks and similar goodies for those investors who are mostly the wealthy upper-class who own most of the corporate assets..
So we can expect a new onslaught of lobbying by companies like Dell for another extraordinarily wasteful “repatriation holiday.” The lobbyists will claim that such corporate tax cuts are essential if we want big companies to keep creating jobs. But that’s bunk. The evidence is in from the last repatriation holiday–it lined the pockets of the rich, as most of these corporate tax breaks have done and did not create jobs.
Obama and the Democrats in Congress should resist. Ordinary Americans should not bear the burden of ordinary income rates when the wealthy are taxed at preferential capital gains rates. And ordinary Americans surely shouldn’t be called upon yet again to subsidize profit-making corporation’s low-tax regimes through the cuts ordinary Americans will suffer to needed services…
You missed the point: Off-shore income should be taxed here.
So the corporations should just leave the money overseas instead of putting it to work in the USA. Is that your thesis? You don’t get it do you? Repatriating funds into America means that the profits earned outside of the US could be used in the US for things that will directly benefit Americans. Pension funds, insurance funds, etc all own stock and would all benefit from more corporate cash in the US. The middle class benefits from these funds. Get a grip. Your argument is to keep the funds outside of the US forever. What good will that do Americans?? 2trillion in cash coming into the US from a tax holiday would have profoundly positive effects on our economy, to argue otherwise is foolish.