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A number of large corporations are promising Congress that they will create jobs in exchange for a “tax holiday” on their outsourced profits. There are funds of over $1.4 trillion belonging to corporations like Google, Apple, Pfizer, and General Electric which have been stored in offshore accounts, out of reach of the federal government. The companies now want to bring home their revenues without having to pay the sanctioned corporate tax of 35%. Instead, they are heavily lobbying, under the banner of a campaign called WIN America, to pay only 5.25% in taxes. The justification for such a paltry rate is that more revenue will enable companies to add more jobless Americans to their payroll. According to WIN America, “$1 trillion earned by American businesses [is] trapped overseas,” and a tax holiday would “make a significant investment in our struggling economy, boost U.S. businesses, and help put people back to work.” Given the state of the economy, this plan may seem appealing but past instances have proven that the job creation promise may be hollow. In 2004, WIN America lobbied for and won a similar tax holiday under the “American Job Creation Act of 2004.” According to my guest, Chuck Collins, “58 of the large corporations that took advantage of the 2004 tax holiday shed almost 600,000 workers in subsequent years…Today, these 58 companies, [70% of the beneficiaries of the law], maintain combined cash reserves of more than $450 billion.” The companies are able to shift billions of dollars of profits offshore through various accounting gimmicks, some of which could be addressed by a new bill in Congress, called the “Stop Tax Haven Abuse Act.” Meanwhile, Senate Democrats are pushing a 5% surtax on millionaires to pay for President Obama’s American Jobs Act. A number of CEOs of big corporations like Bank of America, Google, and Citicorp said yesterday they would support such a tax if it was coupled with lowering government spending. Google Executive Eric Schmidt boasted that taxes would not crimp his style: “In my case, it is not a particularly big issue because it would not change my behavior,” he said. Schmidt earned $10.3 million plus stock options last year.

GUEST: Chuck Collins, is a senior scholar at the Institute for Policy Studies (IPS) and directs IPS¹s Program on Inequality and the Common Good. He co-edits the web resource, www.inequality.org, an online resource with data, analysis and commentary.

Read his article about the proposed Corporate Tax Holiday here: http://www.commondreams.org/view/2011/10/04