The whole point of the U.S. government’s provision of tax breaks on offshore profits made by U.S. corporations is for these corporations to bring in the billions of dollars they have outside the country and use the money to create jobs for Americans as well as spend it on more research and development. That was, at least, how it was presumed to work. Ironically, when American companies were give a similar tax break in 2004, what was noted was that these companies still ended up slashing j...
Read more …The whole point of the U.S. government’s provision of tax breaks on offshore profits made by U.S. corporations is for these corporations to bring in the billions of dollars they have outside the country and use the money to create jobs for Americans as well as spend it on more research and development. That was, at least, how it was presumed to work. Ironically, when American companies were give a similar tax break in 2004, what was noted was that these companies still ended up slashing jobs and R & D spending while upping executive pay went up.
Tax breaks can mean billions of dollars of lost revenue to the treasury. Unless the recipients of these tax breaks commit to pumping money into the American economy on a strategic basis, the country would be better off if it just went ahead and taxed them without any preferential treatment. However, the question begs to be asked: if we stop all tax breaks to these corporations, would the possibility of them maintaining their money offshore hurt the economy, and its chances of recovery, more?
