Bad Big Businesses Going Good?

 Some of America's largest corporations are now pressing Congress for another tax break, allowing them to duck under their usual rate of 35% and move their massive off shore dollars back to the U.S. As is expected the corporations argue economic benefits and say their off shore funds, Apple- $12 billion, Google(grudge from my last article)- $17 billion, and Microsoft- $29 billion, would help "resuscitate the gasping recovery".

 These corps. are asking for a 5.25% tax-rate for one year and say the short term could yield billions in tax revenue as the money is coming in. They must have some sort of confidence in their plan,
because they have even gone so far as to promote it as "the next stimulus". According to their reps, their plans would influence the multinational corporations  to inject around a trillion dollars or more into the barely surviving economy. Jim Rodgers, the chief of Duke Energy, stated, “For every billion dollars that we invest, that creates 15,000 to 20,000 jobs either directly or indirectly.” So what's wrong and why hasn't this helpful plan been implemented? SHOW US THE MONEY (twisted Jerry Maguire reference, probably a bad one)!!!
 Well it may not be as helpful as those big boys on top say it will be. You see, it wasn't that long ago that this was attempted. As a matter of fact it was only back in 2005, under the Bush administration, when a similar tax allowance was...well allowed. According to an article in the NY Times, "Congress and the Bush administration offered companies a similar tax incentive, in 2005, in hopes of spurring domestic hiring and investment, and 800 took advantage"[800 corps.]. Obviously something went wrong and it failed. A study by the nonpartisan National Bureau of Economic Research revealed that the last "stimulus" resulted in $312 billion back into the United States. BUT, yes there is a huge but, and please excuse the pun. A whopping 92% of those tantalizing billions was thrown right back in the fat pockets of the shareholders. "This money comes from overseas operations and in some cases accounting maneuvers that shift domestic profits to low-tax countries. The study concluded that the program “did not increase domestic investment, employment or research and development"(NY Times, June 2011).

 So, if history really repeats itself, it isn't looking so good. Take a breathe because it gets worse. In total 60% of the benefits went to just 15% of the largest multinational companies, many of which ended up actually laying off domestic workers. For example, the pharmaceutical giant Merck(i know, the name is kinda ironic if you follow rap lingo at all) cashed in last time the U.S. tried this. Merck brought home $15.9 billion from overseas, which went to "U.S.-based research and development spending, capital investments in U.S. plants, and salaries and wages for the U.S.," according to their spokesman, Steve Campanini. Did it really now Steve???
 No. No, it did not. Merck stated they would use the funds to invest in the home land, but as regulatory filings later revealed they actually made cuts to their domestic work force and capital spending in the country(its not over yet). Once their coffers are overflowing you would think the rest would go to what they said it would, but WE THE PEOPLE were wrong again. Unfortunately, we were not the only ones who didn't get their share. While they were shoveling money back to themselves, they were also in the midst of what would become an $8 billion dollar settlement for executive missteps in the past. Add that on top of billions in back taxes owed to the IRS and billions more to various lawsuits filed by consumers of their notorious painkiller Vioxx. Garnish those losses with several hundred millions owed to the Justice Department for accusations of defrauding Medicare and WE are left to fight for the scraps that they ration.
 Overall, history should be given more weight in the consideration of this "stimulus". Last time it obviously didn't work, but the problems are known(were they really blind to the problems the first time?). "The tax break, part of the American Jobs Creation Act, lacked safeguards to ensure the companies used the money for investment and job creation in the United States, as Congress intended"(NY Times, June 2011). Its unfortunate that most of those who represent most of the capital in our country also represent most of the greed, selfishness, and moral degradation as well. Bad Big Business must be held to standards that promote the good of the people while inspiring fierce competition to expedite America's progress.


Source: http://www.nytimes.com/2011/06/20/business/20tax.html?_r=1&scp=1&sq=google%20tax%20repatriation&st=cse