Here’s a
short excerpt:
A Senate committee is investigating whether multinational
companies abused a tax break in 2004 that gave them an 85% discount on profits
made overseas and brought back to the U.S. The
Senate Permanent Subcommittee on Investigations is circulating a 17-question
survey asking companies to explain whether they used the cash to create U.S.
jobs as promised or whether they bought back stock or increased executive pay
in violation of Treasury Department rules.
"Proponents
claim that repatriation tax holidays encourage businesses to bring foreign
earnings back into the United
States," said Sen. Carl Levin, D-Mich.,
who is chairman of the subcommittee. "But it may do the exact opposite by
encouraging companies to move operations offshore or shift profits to tax
havens in anticipation of a future tax holiday and by alleviating any worry
that the funds might get stuck offshore." The probe comes as many
companies, including Oracle, Dell, Hewlett-Packard and Eli Lilly, as well as
the U.S. Chamber of Commerce, are urging lawmakers to include an identical tax
break in a Senate fiscal stimulus bill being debated this week. The tax break
was offered for the first time in 2004.
Here’s
short version: Our government basically said: we know you broke the law by
moving profits off-shore. We’ll give you a one time chance to bring that money
back if you promise to use that money to create jobs in the U.S. We will
only charge you taxes on 85% of it. In fact, the regular tax rate for
corporations is around 24% and with this tax holiday, companies only paid
around 5% tax rate.
A number
of companies took a part in this tax holiday and brought their profits back to
the United States.
But now it appears that not only did they not create jobs as they promised,
they also have decided that they deserve to continually get out of paying
taxes, EVEN as they cut jobs. Companies have figured out that they will always
have Members of Congress to help them get around the system. Many now keep their profits overseas biding their
time until they can get another tax holiday. They figure it’s only a matter of
time.
And it
appears they are right. Also according to the US Today Article:
Sen. John Ensign, R-Nev.,
will offer an amendment to the stimulus bill to allow a new one-year holiday,
spokesman Tory Mazzola said.
So, I
guess I am angry that Senator Daschle didn’t pay his taxes because I have paid
all of my taxes since I began working. But when I know that Pfizer was able to
bring in $37 billion dollars at a lower tax rate than I pay on my nonprofit
salary at the same time they were cutting 9,000 jobs in the United States,
I am outraged. I am sure you are too.