Would you like an income tax rate of 5.25%? You have a chance–if you’re a major multinational corporation.
In 2005 the Bush Administration gave multinational corporations a big tax windfall, telling them that they could bring home profits that they had ‘parked’ abroad and pay only 5.25% in income taxes, instead of the usual top corporate rate of 35%. More than $300 billion flowed back, saving corporations around $100 billion.
The tax holiday was supposed to be an incentive for the corporations to increase their hiring in the U.S., but almost all the money wound up being used for dividends and stock buybacks, as the National Bureau of Economic Research reported. Some companies even used the money to increase their spending on closing domestic plants and laying off workers.
Now, as today’s New York Times reports , the corporations are pushing in Congress for another similar tax holiday, saying that it will–guess what?–create thousands of new jobs. The incredibly cynically-named WIN America (Working to Invest Now in America) Coalition wants a break on as much as $1 trillion–that’s Trillion with a T, as in One Thousand Billions–in profits.
This may be the ultimate corporate double-dip.