Personally, I question whether the tax incentives for repatriation would be effective at all. There are currently so many ways that companies evade tax codes by sending profits abroad, that it seems likely that the same sort of thing would occur. Companies would likely find a way to keep much of their profits abroad, or bring back profits that were illegally abroad anyway to receive the break. I have very little faith that these incentives would actually go so far as to create jobs on the ground for unemployed Americans.
Tuesday, October 18, 2011
Bring profits home and create jobs? Maybe not
This article addresses the possibility, which has been debated in the Senate, of a tax break for companies to bring their foreign profits back into America, potentially creating jobs and boosting GDP. Both proponents and opponents have evidence to support their view, including numbers that show job and GDP loss and gain as a result of the tax breaks, from sources like the Congressional Budget Office and the Joint Committee on Taxation. There is no definitive right in this issue, which makes it something interesting to consider.
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Well, much like politicians in Washington I don’t really have an answer for if a foreign profits tax break would be more beneficial or detrimental to the US economy. I would say that if the results of this tax break are so unknown, even by those in the major economic committees in Congress, perhaps Washington would do better by looking at stimulating the economy and job creation elsewhere. On a side note I was surprised to see that, at least for this issue, Democrats and Republicans seem to be working together, which is novel for recent politics in Washington.
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