Major corporations are lobbying heavily for a U.S. tax holiday on their foreign profits. These huge multi-nationals like IBM and Pfizer claim that if they are allowed to repatriate their overseas profits the tax cut—that some say would be as much as $80 billion—will be used to create jobs right here in the United States. Pass the salt shaker.
The Washington Post reports today that most these multinational giants refuse to publicly release information breaking down the exact numbers of U.S. workers versus the number of workers in their overseas operations. Between 2000 and 2009 the companies cut 2.9 million U.S. jobs and 2.4 million overseas.
Ron Hira, an associate professor of public policy at the Rochester Institute of Technology told the Post:
It's an important piece of information that the American people should have. Should you listen to the kind of advice these companies have about how to grow the economy when their record and their model indicates they've cut jobs…or should we talk to people who actually do create jobs in the United States.
Many of these firms previously broke down their U.S. versus their overseas workforce numbers in their annual reports or their filings with the Securities and Exchange Commission (SEC). But as huge corporations began receiving more scrutiny and criticism for shipping U.S. jobs overseas, they began keeping those numbers secret. IBM stopped releasing its workforce numbers in 2009.
Data from before 2009 showed IBM rapidly shifting workers to India. Dave Finegold, dean of the Rutgers School of Management and Labor Relations, estimates that 2009, when the company stopped sharing its U.S. employment figure, also marked the first time the company had more employees in India than the United States.
The tax holiday plan has been floated recently by Republican lawmakers—and a few conservative Democrats—and is backed, not surprisingly by a wide range of major corporations. The group Business for Shared Prosperity says that a similar corporate tax holiday in 2004 under the Bush administration was "a proven failure." Proponents claimed it would boost the economy and create jobs. But says Scott Klinger, the group's tax policy director:
Instead, the National Bureau of Economic Research found that a dollar increase in repatriated earnings was associated with an increase of almost a dollar in payouts to shareholders—many CEOs among them. Corporations eliminated more American jobs and shifted even more income and investment to offshore tax havens in the wake of the tax holiday.
U.S. taxpayers and workers have been burned once by the tax repatriation scheme. Let's not let it happen again.
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