Are corporate taxes too high?

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.

 

10 replies
  1. sammy22
    sammy22 says:

    Money comes back to the US. How does one allocate the taxes on that money to reduce the deficit or pay down the debt? Whose money is it? How does one spread it around? That should be simple, I am sure.

    • SoundOffSister
      SoundOffSister says:

      Whatever is received in taxes from the tax holiday (the IRS will know this by simply looking at corporate tax returns, i.e., some corporate income?will be?taxed at 35%, and some at 5.25%) is used to solely to buy back U.S. Treasury Bonds, i.e., our debt.
      Simple.

  2. TomL
    TomL says:

    SOS that’s way to simple for our congressional pinheads. I’m sure?zero’s ?Regulation Czar Cass Sunstein should be able to write up a 3,000 page pamphlet that no one will read to allocate the funds or maybe we should have a 30 member blue ribbon panel made up of? Harvard academia figure it out.?

  3. Dimsdale
    Dimsdale says:

    The “infrastructure bank” sounds suspiciously like a money laundering operation or a slush fund.
    ?
    Par for the course.

  4. winnie888
    winnie888 says:

    “Infrastructure bank”—Is that Obama’s stash????

    Schumer is just full of great ideas, huh??

  5. sammy22
    sammy22 says:

    I figured there would be a simple answer provided that: the companies w/ money overseas had an incentive to bring the money back and presumably Congress would “agree” to retire some bonds. I assume it’s not being suggested that the IRS itself buys US Treasury Bonds.

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