A very unlikely Democrat believes they are. But, as with most things in politics, you need to dig a bit further to find the hidden agenda.
The corporate taxes at issue here are those imposed upon companies that have earned money overseas. If that money remains overseas, the only tax the American corporation has to pay are the taxes in the country where the income is earned. If that corporation returns that money to the United States, let’s say to build a new plant here, taxes of upwards of 35% (with an offset for the taxes paid over seas) are imposed on that money. For reference, our corporate tax rate is the second highest among all developed countries. Thus, leaving the money overseas makes perfect sense.
So, Senator Charles Schumer (D. N.Y.) has a plan. If we granted a one year “tax holiday”, and allowed companies to return that money to this country with a tax rate of around 5.25%, then we would receive a revenue windfall, something sorely needed given our debt crisis.
Economist Allen Sinai estimates that there is more than $1 trillion abroad. His study finds that [such a tax holiday] would bring $565 billion worth of funds back to the U.S. and could produce 300,000 jobs.
So far, so good. Except for one small “wrinkle”. Senator Schumer does not propose that the taxes raised by this be used to offset our annual deficits, or even to pay down our debt. He demands that all revenues so collected be used to “capitalize” the Obama administration’s long sought after “infrastructure bank”.
What happens with infrastructure bank money, you ask?
The plan is to use the money to fund only the most “worthwhile” causes, such as, wind power, mass transit, broadband, and, of course high speed rail.
I can only suppose that once we’ve spent that money, the taxpayers will be on the hook to continue to fund yet another Obama administration boondoggle.