Lie #2: Tax Repatriation Holiday
Giving Corporations a Repatriation Tax "Holiday" Puts Money in the Pockets of...Corporations
Lie #2 in the Trump tax code overhaul: A tax holiday (reduced rate) on money made by multinational corporations overseas will get them to bring that money back and put those profits into the economy.
How it would work: Currently, the US taxes the entire worldwide profits of US corporations, but it taxes foreign profits only once they're brought back here. So companies tend to leave foreign profits abroad, which allows them to delay paying taxes, often indefinitely. So Republicans plan to perform a one-time lowering of the traditional 35% corporate tax rate to get Apple, Google, and others to bring that money back.
What's the lie? It didn't work when it was tried in 2004. Not only did the money brought back on average get distributed to shareholders instead of put into the economy, corporations ended up with a 5% tax rate on that income. Why on earth should they get a rate that is lower than the poorest American has to pay when there is no evident benefit to the economy?
Evidence of the 2004 repatriation holiday suggests that companies might take advantage of the break to get a lower rate on funds they had intended to repatriate anyway--meaning the tax holiday could end up costing the government money. And guess who will pick up the slack on those lost tax dollars? Yup.
1. CALL YOUR SENATORS 202-224-3121 using this toolkit to see how much of the tax break is going to the wealthiest 1% in your state and using the script below.
USE THIS SCRIPT (feel free to ad-lib, of course)
I want to tell the Senator that I urge them to vote against the current proposed tax overhaul because of the disproportionate break it provides to the wealthiest Americans. This vague proposal privileges the wealthy without making clear at all how the middle class will be affected.