In 2004, Congress passed and President Bush signed a "tax holiday" for America's largest corporations. The thinking was that if corporations could bring back, or "repatriate" funds they were holding in offshore accounts, that money could be used to hire new workers.
@rag:Guess what? It didn't quite work out that way. The reality? Ninety-two cents of every dollar corporations brought back to the U.S. didn't go to hiring American workers, but rather ended up in the pockets of CEOs and shareholders through bloated compensation packages, stock buybacks and bigger dividends.
Example: the top five executives at Johnson & Johnson, which laid off 9,900 American workers since their last "holiday," saw their pay increase by $33 million a year in just three years. For the CEOs, this really was a holiday.
In 2011, they're back with their hands out again. Lobbyists for many of the nation's largest corporations are telling Congress that if they can just have one more tax holiday, one more tax break, and they will bring home hundreds of billions of dollars and use the cash to put Americans back to work.
If only that were true.
There are a couple of problems with corporate lobbyists' argument. For starters, companies already are sitting on $348 billion in cash reserves already here in the United States, and they are not using that money to hire new workers.
Second, another corporate tax holiday would cost taxpayers $79 billion over the next 10 years, according to the Joint Committee on Taxation. It would actually increase the deficit and create few jobs.
It's clear why corporations are trying to fool us again -- massive profits. It's less clear why Congress would even consider such an outrageous request, until one follows the money.
A new report recently issued by the nonpartisan groups Public Campaign and USAction found that just 20 of the nation's largest corporations have spent $1 billion on campaign contributions and lobbying Congress since the last time they got this corporate tax giveaway.
The amount of money spent solely on lobbying is staggering -- these 20 corporations spent roughly $365,638 per day lobbying in Washington since 2005, every day, including weekends. General Electric alone spent $164 million in lobbying and its executives and PAC gave $13 million in campaign cash, according to analysis of data from the Center for Responsive Politics. Pfizer spent $94 million lobbying and made $9 million in campaign contributions.
Doesn't this sound familiar? American jobs and profits are shipped overseas by huge corporations who use their clout and cash to push Congress to pass corporate tax giveaways, while increasing the deficit and making the wealthiest Americans even richer. This is government of, by and for the 1 percent.
What can Congress do instead? Congress should close the loopholes that encourage companies to ship profits (and jobs) overseas in the first place, and invest that revenue into putting Americans to work, educating our kids, repairing our infrastructure, and making our homes and offices energy efficient. It's time to focus nation-building back home and to put America back to work rebuilding our schools, roads and infrastructure.
"Fool us once ..," you know the rest.
Zuckett is executive director of WV Citizen Action Group, a state affiliate of USAction.org.