Paul Krugman on the idea of a “Tax Holiday” during which corporations can repatriate the cash piling up inside their overseas tax-dodging havens.
So, what’s wrong with this, aside from the fact that any short-term gain in revenue will be much more than offset by future losses? (Think about the encouragement you’re giving to tax avoiders, who can figure that they too will get a free pass one of these days).
The answer is, it would do absolutely nothing — zip, zero — for job creation.
But, say the advocates, it would put cash in the hands of businesses, which would then invest that cash, right?
Um, aren’t people reading the financial news?
Major corporations — and this is what we’re talking about — are awash in cash, which they aren’t investing in new plant and equipment because they don’t see enough consumer demand to justify expanding capacity. Instead, they’re paying down debt, buying back their own stock, and in general using cash for just about everything except job creation.
So why would you suppose that letting these major corporations slip hundreds of billions of cash past the tax collectors would change anything? The pile of cash they aren’t using would just get bigger.
The Republicans would like you to believe that we’re living under the “most anti-business president ever,” but the truth is we’re actually living under the “most anti-american regime of business ever.”
Corporate America is sitting on massive amounts of cash, and they aren’t hiring because, as far as they are concerned, there’s no reason to. And it’s true that consumer demand is currently depressed because of high unemployment and record-low tax revenue which is leading to budget-cuts at the state and federal level, but Corporate America is still raking in record profits by squeezing more productivity out of a desperate workforce who is simply happy to have a job.
The government is the only force with the power to create enough demand to break Corporate America’s stranglehold on the economy, but as long as the Republicans have the power to block any and all legislation which may do so, we will be stuck in the nonsensical and self-serving cycle of austerity.
Removing the Republicans from the House of Representatives in 2012 has to be a priority.