Big international corporations have been able to duck the IRS for years. Companies such as GE use their international stability to keep money out of the USA and importantly away from high American taxes. The estimated total of wealth of american companies in foreign bank accounts is roughly 1 trillion dollars. Apple and Cisco are leading the charge for a tax holiday that would allow american corporations to bring home this 1 trillion dollars free of charge. Is this fair?
These corporations have moved most of their manufacturing outside of the US while still maintaining US customers as their main source of revenue. They have been able to not give back to the american people without leaving american wallets. American tax payers are left without jobs and are left without any financial help from the big corporations who can hide their profits in offshore accounts.
Some, such as senetor schumer, would like to give a sort of tax holiday where the tax rate is brought down to 5% from its normal 35%. This would bring in roughly 50 billion dollars in taxes. The benefit is receiving all this money, but the negative is that it is still rewarding these companies who cheated american taxpayers out of jobs and taxes.
- Johnston: Tax Repatriation (taxprof.typepad.com)
- Senate Report: 2004 Repatriation Tax Holiday Failed on Every Level (taxprof.typepad.com)
- Tax Foundation Hosts Briefing Today on Repatriation: The Trillion Dollar Question (taxprof.typepad.com)
- GE CEO: Repatriation Tax Holiday Could Help Fund Infrastructure Bank (blogs.wsj.com)