President Freak's Tax Holiday

Richard Stanley

Well-Known Member
The new President is promising a corporate tax holiday rate of 10% in order to repatriate 2.5 trillion dollars from offshore back to the USA. The claimed intent is to have this money be re-invested by corporations so as to create more domestic jobs. However, as demonstrated by Bush 43's 5% tax holiday in 2004, corporate leaders today, post election, are indicating that they want to use the money to do M&A, increase dividends, and do stock repurchases, none of which will create jobs. In fact, M&A usually means fewer jobs through the elimination of duplicate jobs. M&A also means decreased competition in the marketplace.

And as the excerpted article states, last year Apple took on 12 billion in domestic debt just to do stock buybacks and pay dividends.

Perhaps the new administration will include provisions that a certain percentage must be spend on re-investment in order to gain the 10% benefit? But even if so, such as new factories will be highly automated, which is very good for automation equipment companies, but fewer workers will be employed overall. And these workers ironically must have a higher technical education level than the disgruntled voters that voted in the oligarch Trump. Supposedly even this is a problem, as we have been struggling to properly educate enough of these types, while letting public schools go to shit generally.

Of course, construction work will benefit, building the supposed factories, and repairing roads and bridges, if the Republicans let them do the latter that is. So far, it appears Trump is on track to cow them into doing whatever he wants, but who knows. Even Bush led them around like lemmings, but that was before the Tea Party.

Not blaming anyone, because the alternative, the corporate Clintons, fell silently on their sword for the bigger cause. Clearly there is a bigger agenda at work here.

Of course, as a friend of mine pointed out, there is indeed a desire to build (highly automated) factories domestically. The Chinese are doing similar. They build GM Buicks in China for Chinese consumption. Even with low oil costs, it is costing more and more money for shipping goods that could be produced at home just as easy. The Chinese and others' wages are creeping up. And automation helps to level the labor cost differences. But did we really need to have Trump to provide any cover for doing that?

Maybe all this has to do with President Freak's and VP Frack's team of holy warriors and the coming upsizing of the military to support their desired holy wars? Secretary DeVos's new religious charter schools will provide the preferred human drones for staffing the drone factories and the drones for the holy crusade?

The official line from U.S.-based multinational corporations is that if they get a huge tax break, they’ll bring home the trillions of dollars in profits they’ve stashed overseas and use it to hire tons of Americans. (Nearly 3 million, says the U.S. Chamber of Commerce!)


But now that Donald Trump’s election means it might really happen, corporate executives are telling Wall Street analysts what they’ll actually use that money for: enriching their shareholders and buying other companies.


The Intercept’s examination of dozens of earnings calls and investor conference talks since Trump won the presidential election finds that many executives are telling analysts at large banks that they are eager to take the money to increase dividends and stock buybacks as well as snap up competitors. They demonstrate considerably less if any enthusiasm for going on a domestic hiring spree.


Many U.S. multinationals, especially in the technology and pharmaceutical industries, have long resisted bringing their overseas profits back to America — because if they did they’d have to pay taxes on them at the current corporate rate of 35 percent. Their accumulated untaxed foreign profits have now grown to a spectacular $2.5 trillion, an amount equal to about 70 percent of the federal government’s annual budget and 14 percent of the entire U.S. economy.


While running for president, Trump proudly proclaimed that he’d give those corporations a special 10 percent tax rate on that money — not, you understand, for an unpopular reason like making rich people richer, but because it would help regular Americans.


“The wealthy are going to create tremendous jobs. They’re going to expand their companies,” Trump asserted during the first presidential debate. “They’re going to bring $2.5 trillion back from overseas, … to be put to use on the inner cities and lots of other things, and it would be beautiful.” During the third debate he promised that “We’re going to start hiring people, we’re going to bring the $2.5 trillion that’s offshore back into the country. We are going to start the engine rolling again.” ...

https://theintercept.com/2017/01/05/corporations-prepare-to-gorge-on-tax-cuts-trump-claims-will-create-jobs/
 
Top