1. America's most profitable multi-nationals have $1.4 TRILLION (that they're admitting to - there is most likely scads more) sitting offshore in tax havens from Ireland to the Caymans.
2. These companies (mainly tech and pharmaceutical companies, including Google, Apple, Cisco Systems, Merck, etc.) would like to "repatriate" this money. This means, they'd like to bring it into the United States.
3. The companies have banded together as the "Win America Coalition" and hired 160 lobbyists to convince congress to give them a one time "Tax Holiday" so that they may bring this money into the U.S. at a 5% rate of taxation instead of the 35% the law currently says they will have to pay.
4. The Win America Coalition has recruited top economists, including UC Berkeley Professor Laura Tyson, a former Clinton administration economist, and Douglas Holtz-Eakin, past director of the Congressional Budget Office and adviser to McCain during his 2008 presidential run, to show Senators and Members of Congress how a tax holiday would inject hundreds of billions of dollars into the economy and create jobs. (Carolyn Lockhhead - SF Chronicle 10.15.11)
5. Senators John McCain (R-AZ) and Kay Hagan (D-SC) have introduced the "Foreign Earnings Reinvestment Act", sponsored by, among others, our own Barbara Boxer. The McCain/Hagans position paper on the bill bemoans the fact that this poor, unfortunate money is "trapped" in offshore banks, shell companies, and tax havens.
6. These "Win America" tax dodgers are the same companies that received the "Boxer Tax Holiday" (Go Barb!) in 2004, which coincidentally dropped their effective tax rates on repatriated money to the very same 5% they are asking for today and "gifted" them $315 BILLION (17% of Total US 2004 Tax Revenue). So it's not really a one time thing, more like a two times in 7 years thing.
7. Independent tax analysts have widely panned the idea. Numerous academic studies of the 2004 tax holiday showed that the companies spent most of the money they brought back on shareholder dividends, stock buybacks and executive pay. (ibid)
8. Interest groups as disparate as the conservative Heritage Foundation and the liberal Citizens for Tax Justice strongly oppose another tax holiday, in part because of evidence that the last one encouraged multinationals to SEND more of their earnings overseas, in anticipation of another tax holiday. (ibid) This means that a lot of this money is actually domestic profits that have been DEPATRIATED through tax evasions such as the "Double Irish" and the "Dutch Sandwich".
9. Senator Carl Levin published a study this week, which shows that companies receiving the 2004 Tax Holiday actually eliminated over 20,000 U.S. jobs between 2004 & 2007. For those of you who don't remember, that was when the economy was "good".
10. The difference in tax revenue to the federal government between the 35% tax rate currently required by law and the 5% tax rate sought by the "Win America Coalition" (lord), is $416 BILLION.
11. The total federal tax revenue for the U.S. in 2010 was $2.3 TRILLION, which means that "Win America" wants the federal government to gift them monies that would represent an 18% addition to total tax revenue collected in 2010.
12. The total federal deficit for 2011 is $1.3 TRILLION, which means that "Win America" wants the federal government to gift them monies that if collected would cut 32% off the 2011 federal deficit.
13. The fact that this money is only now being brought forward means that our national accounting systems and the figures they produce, Gross National Product, for example, are pretty much meaningless. For example, our 2010 Gross National Product, which includes the foreign revenue of domestic corporations was actually LESS than our Gross Domestic Product, which doesn't include foreign revenue (15.27 TRILLION to $15.35 TRILLION)!
If we can't trust that our most basic barometers of economic performance are accurate, then what are we to make of the decisions being made on the basis of those barometers?
The inequities and loopholes in our tax system have created this ridiculous scenario. We've got to pretty much toss that thing and start from scratch, but for now, let's send these home-grown, double-reverse carpetbaggers a loud and lusty "Oh HELL no!"
This bill is still in committee. The only petition we can find is one asking Apple Computer to "Think Responsibly" and end it's involvement in this lobbying effort. As the bill nears a vote, we will post links.
