February 3, 2009
The Facts
Democrat Senator Barbara Boxer of California, along with the help of Republican John Ensign of Nevada, is proposing a “tax holiday” on American corporations who move profits back to the US from tax haven countries such as the Netherlands and Cayman Islands. They are saying by giving these corporations this tax incentive, it will encourage the corporations to bring $421 billion back home which would create more jobs.
This same ploy was orchestrated in 2004 by the then Republican controlled Congress and Republican President. It didn’t work then, and it won’t work this time. Several companies that participated in the 2004 holiday laid off several thousand people within the following two years. Pfizer brought back $37 billion and received the appropriate tax break. The following year they laid off 10,000 people.
My View
Well, it looks like some Democrats are starting to buy into the fantasy theory of trickle-down-economics. That was previously reserved for the Republicans, most especially the neo-conservatives. But if the Democrats are to abandon their partial belief that regular citizens deserve to be represented, then I guess we are just out of luck. They’re just accepting that rewarding companies who “blackmail” America is a good thing to do. But this will only encourage corporations to go further the next time.
It seems that the trend is to eventually have no one paying taxes except the middle and lower class. The Republicans, along with help from many Democrats, have already passed tax laws that benefit only wealthy people. This report on the tax returns for the 400 highest individual incomers in America attest to that fact. As Linda Beale of ataxingmatter pointed out from the same report, ” the average tax rate paid by the richest 400 Americans fell by a third to 17.2 percent through the first six years of the Bush administration and their average income doubled to $263.3 million”. And remember; the IRS data is quoting Adjusted Gross Income (AGI). So not only do the wealthy have the means to avoid paying taxes on a whole lot of their income, their tax burden for the remainder fell considerably during the Bush years (it’s great to have friends in high places).
So I guess it’s left up to us to look after our selves (see my future post on The Rising of the Commoners).
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