Senator Rand Paul is seemingly obsessed with giving corporations another ‘tax holiday’ even though the last one proved a dud.
Paul has introduced S. 911, which would reduce the repatriation rate to 5 percent. Paul argues lowering that tax on companies would generate more revenue because it would incentivize U.S. investments.
Paul said U.S. companies currently hold more than $2 trillion of profits overseas, but if the repatriation rate were lower than the current 35 percent, the companies would return to the United States.
“We can help fund new construction and repair by lowering the repatriation rate and bringing money held by U.S. companies back home,” Paul said. “This would mean no new taxes, but more revenue, and it is a solution that should win support from both political parties.
Yet, Senator Paul is obviously ignoring the history of the last tax holiday in 2004 which the US Department of Treasury had something to say about that one
In 2004, when the U.S. enacted a repatriation tax holiday, the goal was to encourage U.S. multinationals to pay bigger cash dividends from their overseas subsidiaries and use the cash to make investments in the United States. Unfortunately, there is no evidence that it increased U.S. investment or jobs, and it cost taxpayers billions.”
US Tax reform not only for corporations but also for a comprehensive US reform of the US Tax code has been long advocated, yet Congress to date cannot come up with a comprehensive plan. It’s my opinion, the reality is simply too much like work or work. 🙂
Categories: Economic policy