Congress, for some reason, keeps trying to unearth this bill tax bill that hasn’t worked in the past. Let’s compare it to a movie, such as “Dirt Dancing,”that would do better left alone, instead of remade. Back the newish old idea floating around the congressional halls at the moment. Congress is currently debating whether or not they should give multinational companies a tax break; if, those companies bring their currency back to the U.S.
Senators John McCain (R-Arizona) and Kay Hagen (D-North Carolina) are the masterminds behind this latest idea that, according to them, would help out the U.S. economy by putting the money back in the pocket of American’s in the form of jobs. If more people had jobs, more would spend money to boost the economy. At least according to the two senators.
Senators John McCain and Kay Hagen are not the only political players in support of this bill. Those in congress, who are in favor of this bill, want to use the tax cut to form an infrastructure bank that’s primary purpose would be to boost investment within the U.S. The senators state that if congress passed the bill, over $1 trillion. in overseas earnings back to the U.S.
Here’s how the tax cut breaks down over a period of 10 years. Corporations would spend an estimated $25 billion during the temporary tax holiday. The problem comes in when ,while the companies would pay the $25 million now, they would save over $100 billion down the road; and, less money would end up making its way back to the U.S., over the long term.
Unfortunately for the senators in favor of this bill, a similar plan went into effect as a result of a decision made by congress back in 2004. Instead of the plan creating new jobs, the money went into the pockets corporate shareholders as dividends and stock buybacks.
Over 160 lobbyists are in favor of passing this bill. What’s even more mystifying is that, according to Howard Gleckman, a contributing writer for Forbes.com, Apple and Google are actually agreeing to the proposal presenting by senators McCain and Hagen. At the time of press, though, it makes sense why the two rivals would actually shake political hands. The two corporate giants would only have to pay 8.75 percent tax to bring back their earnings from overseas. At the current rate, they pay up to 35 percent in taxes. Not only would they only pay the 8.75 percent, the amount could go lower, to 5.5 percent. The catch to see the additional drop: they would have to add to their payroll to see further benefits.
The problem comes down to this. The unemployment rate remained high, even after congress gave the multinational corporations a tax break. Many large companies already have a ton of money stashed away, say to the tune of 2 trillion. They could enjoy the tax cut at 8.75 percent, while choosing not to hire new workers. The nation could eventually see these firms stashing money away overseas just to see another tax break happen down the road.