International Herald Tribune Editorial - Taxes in the global economy
International Herald Tribune Editorial - Taxes in the global economy
Copyright by The International Herald Tribune
Published: July 25, 2007
As Americans grapple with the impact of trade and globalization, the government should be trying to ensure that America's multinational corporations - and by extension, their shareholders - pay a fair share in taxes on the profits from globalization. Unfortunately, policy makers have moved in the opposite direction, dishing out excessive corporate tax breaks that have done little for workers and have served mainly to concentrate wealth among the few.
The corrosive effects of that trend were detailed in The New York Times in an examination of the fallout of the Orwellian-named American Jobs Creation Act of 2004. Pitched by tax-axing lawmakers as a way to generate cash for new hiring, it allowed U.S. companies to bring foreign-held profits back to the United States in 2005 at a discount of up to 85 percent off the normal tax rate. Some 100 companies repatriated about $300 billion, avoiding about $90 billion in taxes.
But instead of hiring more workers, many of the participating multinationals had mass layoffs, especially drug companies. And in a final twist, the law has encouraged the use of offshore tax havens by American corporations.
Among other things, $90 billion could provide a lot of health care and bolster unemployment compensation for American workers. Instead, that sum has gone mainly into the pockets of the already rich. Where is the politician who will take an over-my-dead-body approach to future tax holidays and who will broach the need for new corporate taxes?
Copyright by The International Herald Tribune
Published: July 25, 2007
As Americans grapple with the impact of trade and globalization, the government should be trying to ensure that America's multinational corporations - and by extension, their shareholders - pay a fair share in taxes on the profits from globalization. Unfortunately, policy makers have moved in the opposite direction, dishing out excessive corporate tax breaks that have done little for workers and have served mainly to concentrate wealth among the few.
The corrosive effects of that trend were detailed in The New York Times in an examination of the fallout of the Orwellian-named American Jobs Creation Act of 2004. Pitched by tax-axing lawmakers as a way to generate cash for new hiring, it allowed U.S. companies to bring foreign-held profits back to the United States in 2005 at a discount of up to 85 percent off the normal tax rate. Some 100 companies repatriated about $300 billion, avoiding about $90 billion in taxes.
But instead of hiring more workers, many of the participating multinationals had mass layoffs, especially drug companies. And in a final twist, the law has encouraged the use of offshore tax havens by American corporations.
Among other things, $90 billion could provide a lot of health care and bolster unemployment compensation for American workers. Instead, that sum has gone mainly into the pockets of the already rich. Where is the politician who will take an over-my-dead-body approach to future tax holidays and who will broach the need for new corporate taxes?
posted by Carlos T Mock at 9:49 AM
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