Bush Corporate Tax break lead to less jobs: one more Big Lie dispensed with

[JohnWxy]

http://www.usatoday.com/money/perfi/taxes/story/2011-10-11/corporate-tax-break/50735860/1">Senate panel slams 2004 corporate tax break - USA Today

By Paul Davidson, USA TODAY

A Senate panel on Tuesday released a study that concluded a 2004 law that gave U.S. corporations a huge tax break to bring foreign profits back home did nothing to create jobs, undercutting new proposals for a similar initiative to boost the listless economy.

The report found that overall, firms that took advantage of the America Jobs Creation Act to repatriate overseas income from 2004 to 2006 actually cut jobs and research and development spending, while raising stock buybacks and executive pay.

Although the companies were required to use the money for job growth and other investment — stock buybacks and executive compensation were specifically prohibited — no documentation was required, the study noted.

"There is no evidence that the previous repatriation tax giveaway put Americans to work," said Sen. Carl Levin, D-Mich., who chairs the Senate Permanent Subcommittee on Investigations. Some companies moved operations overseas to get the tax break, causing job losses, said the report by the panel's Democratic majority. That contributed to a net $3.3 billion loss in tax revenue over 10 years.
(more)

[toddwv]

1. The REALLY sad thing is that it took them over 7 years to "figure" this out...

C'mon!

[Igel]

2. But that misses the point.

Did they include jobs saved?

/snark off


In any event, the entire "jobs" take on it was mostly a cynical ploy acknowledged in some sectors as a cynical ploy. It produced a one-time revenue increase, was one of the main reasons adduced in the press.

[Bill USA]

3. you're not making sense. The investigators aren't idiots. Here's an excerpt

from the report. The companies exported jobs overseas in the first fucking place. That was NOT considered and actually should have been. they just looked at what impact on employment did the repatriation of over-seas earnings have. the findings are below:


go to http://hsgac.senate.gov/public/index.cfm?FuseAction=Subcommittees.Investigations">Senate Committee on Homeland Security and Governmental Affairs

go down to "Related Files" and click on: REPORT: PSI Majority Staff Report - Repatriating Offshore Funds (10-11-11)


B. Report Findings

The Report makes the following findings of fact.

1. U.S. Jobs Lost Rather Than Gained. After repatriating over $150 billion
under the 2004 American Jobs Creation Act (AJCA), the top 15 repatriating
corporations reduced their overall U.S. workforce by 20,931 jobs, while
broad-based studies of all 840 repatriating corporations found no evidence that
repatriated funds increased overall U.S. employment.

2. Research and Development Expenditures Did Not Accelerate. After
repatriating over $150 billion, the 15 top repatriating corporations showed slight
decreases in the pace of their U.S. research and development expenditures, while
broad-based studies of all 840 repatriating corporations found no evidence that
repatriation funds increased overall U.S. research and development outlays.

3. Stock Repurchases Increased After Repatriation. Despite a prohibition on
using repatriated funds for stock repurchases, the top 15 repatriating corporations
accelerated their spending on stock buybacks after repatriation, increasing them
16% from 2004 to 2005, and 38% from 2005 to 2006, while a broad-based study
of all 840 repatriating corporations estimated that each extra dollar of repatriated
cash was associated with an increase of between 60 and 92 cents in payouts to
shareholders.

4. Executive Compensation Increased After Repatriation. Despite a
prohibition on using repatriated funds for executive compensation, after
repatriating over $150 billion, annual compensation for the top five executives at
the top 15 repatriating corporations jumped 27% from 2004 to 2005, and another
30%, from 2005 to 2006, with ten of the corporations issuing restricted stock
awards of $1 million or more to senior executives.

5. Only a Narrow Sector of Multinationals Benefited. Repatriation primarily
benefited a narrow slice of the American economy, returning about $140 billion
in repatriated dollars to multinational corporations in the pharmaceutical and
technology industries, while providing no benefit to domestic firms that chose not
to engage in offshore operations or investments.

6. Most Repatriated Funds Flowed from Tax Havens. Funds were repatriated
primarily from low tax or tax haven jurisdictions; seven of the surveyed
corporations repatriated between 90% and 100% of their funds from tax havens.

7. Offshore Funds Increased After 2004 Repatriation. Since the 2004 AJCA
repatriation, the corporations that repatriated substantial sums have built up their
offshore funds at a greater rate than before the AJCA, evidence that repatriation
has encouraged the shifting of more corporate dollars and investments offshore.

8. More than $2 Trillion in Cash Assets Now Held by U.S. Corporations. In
2011, U.S. corporations have record domestic cash assets of around $2 trillion,
indicating that that the availability of cash is not constraining hiring or domestic
investment decisions and that allowing corporations to repatriate more cash
would be an ineffective way to spur new jobs.

9. Repatriation is a Failed Tax Policy. The 2004 repatriation cost the U.S.
Treasury an estimated net revenue loss of $3.3 billion over ten years, produced no
appreciable increase in U.S. jobs or research investments, and led to U.S.
corporations directing more funds offshore.

[craticdemo]

4. ...duh?