Posted by WARREN MOSLER on May 4th, 2012
Repatriation made it to Romney’s platform:
– Allow for a tax holiday for repatriated corporate profits held overseas
So I’ve been asking this question for as long as I can remember:
‘Name one company holding off on investment because it has some of its excess cash in a Citibank London account vs a Citibank New York account?’
Corporate America is currently ‘cash rich’ with all the funding they could possibly want for investment. If investment is low, it’s because they don’t see sufficiently profitable investments, and not because of lack of funding.
The funds have piled up in these ‘offshore’ accounts for one reason- the income isn’t taxed by the US until it is ‘moved’ to the ‘US books’ of the corporations. So these corporations could have either made their profits from offshore operations and paid their US taxes immediately, or made their profits and deferred taxation by leaving those profits in offshore accounts.
I understand the argument that corporations should not be taxed in the first place, as corporate taxes are all passed through to consumers, directly or indirectly.
I don’t understand the argument that repatriation somehow ‘creates jobs’ and helps the economy.
I do understand the desire for corporations to support candidates on this issue, to the point of misrepresenting the ‘job creation’ aspect.
In fact, there’s new proposal coming out of Puerto Rico that appears to be a ‘back door’ route to unlimited repatriation for US corporations.