It’s being that Democratic Senator Chuck Schumer, in an interview yesterday with CNBC’s John Harwood, said that one of his top two priorities next year, if he and the Democrats take back control of the Senate, would be to push for a tremendous corporate tax cut. The following comes by way of The Intercept.
Speaking of himself in the third person, Schumer said that “we’ve got to get things done… The two things that come, that pop to mind — because Schumer, Clinton, and Ryan have all said they support these — are immigration and some kind of international tax reform tied to a large infrastructure program.”
American multinational corporations are now holding a staggering $2.5 trillion in profits overseas, refusing to bring the money back at the current tax rates until they get a special deal.
Revenue-starved Democratic leaders have broadly hinted they are prepared to cave, either for a “holiday” period or permanently.
In an exchange with CNBC’s John Harwood, Schumer confirmed that the latter is in fact in the works. When Harwood asked Schumer if “it would be a permanent lower rate, not a holiday rate,” Schumer replied, “Yes, you can’t do a one-shot deal.”
While the idea makes sense on one hand, as it would perhaps give us the revenue we need to fund an infrastructure bank, allowing us to finally address our nation’s crumbling highways, bridges and tunnels, putting American’s back to work in the process, it would, on the other hand, be a – to use the words of Senator Elizabeth Warren – “a giant wet kiss for the tax dodgers” who have taken advantage of loopholes for the past several decades to hide their profits oversees.
I suppose I should withhold judgment, as it might well be the case that President Clinton and the Democrats could negotiate an awesome deal for the American people to bring corporate profits back to our country, where they could fund projects that would lay the foundation for future American growth. I can’t help but think, however, that, we the Democrats win in November, especially if they win in a landslide, as some are suggesting, that there might be an opportunity to do something more ambitious than pass a corporate tax give-away. I mean, if Clinton comes to office with a mandate, and if we retake the Senate, do we really want our first order of business to be a tax cut? Again, I get the up-side, and I understand that it would be great if Clinton could get an immediate “win” that could bring conservatives to the table, but I don’t know that this is the kind of thing that you and I had in mind when we sent checks to her campaign. And that’s what concerns me. I’m afraid that talk like this will keep progressives from the polls on November 8, and we can’t afford to see that happen. So, yeah, I’m pissed at Schemer for bringing this up right now. Even if it just makes a small fraction of voters from coming out on election day, it could have a huge impact.
I should also mention that there’s some question, given the history of such initiatives in the United States, as to whether this plan of Schumer’s would even work. The following comes from former Labor Secretary Robert Reich.
A good idea? Congress’s last tax amnesty, in 2004, was a flop. Executives of large global U.S. corporations had argued that the amnesty would allow them to reinvest their overseas earnings in America. But a study by the National Bureau of Economic Research found that 92 percent of the repatriated cash was used for dividends, share buybacks, and executive bonuses. “Repatriations did not lead to an increase in domestic investment, employment or R.&D., even for the firms that lobbied for the tax holiday stating these intentions,” the study concluded.
Again, I’m hesitant to pass judgement at this point, as it could make sense, depending how how well we negotiate with these firms, but, on the face of it, something seems wrong about offering an enormous corporate tax break, which could come the American people tens of trillions of dollars over the next several decades, in order to repatriate $2.5 trillion that should have never left the country in the first place. What’s more important, though, I think, is the impression this gives to voters as we’re now just 19 days away from the election. I don’t mind having this debate. I just don’t want it now. I’m of the same opinion as Bernie Sanders on this. Job number one has to be to get Hillary Clinton into office. On November 9, though, we need to change focus and go at her from the left, keeping the pressure on her to serve as President for all the American people, and not just the corporate elite.