“Top Senate Democrats and Republicans on Tuesday said they were considering offering American companies a one-time tax break if they repatriate profits stashed abroad,” Emily Stephenson and Patrick Temple-West report for Reuters. “The senators anticipate the proposal would generate a windfall in revenue that would be used to fund federal transportation projects. U.S. Senate Minority Leader Mitch McConnell [R-KY] told reporters in the Capitol that Republicans had discussed a corporate tax repatriation ‘holiday’ idea and ‘it enjoys a good deal of support in our conference. ‘Republican Senator Rand Paul has talked with Democratic Senate Majority Leader Harry Reid about legislation for a repatriation holiday, a spokesman for Paul said.”
“The plan would give companies a one-time reduction in the amount of taxes they pay on profits earned abroad, giving them an incentive to repatriate those earnings. Supporters say that could generate a revenue windfall to bolster the federal Highway Trust Fund, used for construction and repair projects,” Stephenson and Temple-West report. “The fund is expected to run out of funds by late August.”
“Under U.S. law, companies do not have to pay the 35 percent corporate income tax on most of their overseas profits until they are brought into the United States. These earnings can be held offshore indefinitely,” Stephenson and Temple-West report. “When Congress enacted a repatriation holiday in 2004, corporations were allowed bring foreign profits into the United States at a 5.25 percent tax rate – a bargain that hundreds of companies took advantage of to repatriate billions of dollars. In Congress’s latest consideration of a repatriation holiday, the special low tax rate would be revived, but with certain caps on interest deductions that would help raise revenue, a Republican tax lobbyist told Reuters on Tuesday.”
Read more in the full article here.
MacDailyNews Take: Instead of yet another temporary “fix,” how about a clean, new tax code that actually works?
The U.S. corporate tax rate is way too high. Obviously.
Under the current U.S. corporate tax system, it would be very expensive to repatriate that cash. Unfortunately, the tax code has not kept up with the digital age. The tax system handicaps American corporations in relation to our foreign competitors who don’t have such constraints on the free flow of capital… Apple has always believed in the simple, not the complex. You can see it in our products and the way we conduct ourselves. It is in this spirit that we recommend a dramatic simplification of the corporate tax code. This reform should be revenue neutral, eliminate all corporate tax expenditures, lower corporate income tax rates and implement a reasonable tax on foreign earnings that allows the free flow of capital back to the U.S. We make this recommendation with our eyes wide open, realizing this would likely increase Apple’s U.S. taxes. But we strongly believe such comprehensive reform would be fair to all taxpayers, would keep America globally competitive and would promote U.S. economic growth. – Apple CEO Tim Cook, May 21, 2013
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of course tolling the roads would be too unpopular
We already paid for these roads once, and we keep paying for them through road use taxes on fuels and commercial vehicle fees. That the money is spent on “alternative” transportation initiatives (e.g. bike lanes, light rail) is not our fault. There is a bias toward making the use of our roads and highways more and more difficult and unpleasant by those who hate cars. The present state of affairs is fine with them, except that it hasn’t yet forced people to give up private vehicles in favor of mass transit. Sooner or later we need to tell these loonies to take a hike.
i do have a car but where do you see bike lanes on highways?
the roads may have been paid for the first time, but it takes money to maintain them. and what’s wrong with transit? literally millions of people use it in NYC
you need to get out of town occasionally…then you might notice that there are no subways from Amarillo to Albuquerque.
…hmm, none from Duluth to Detroit either. How ’bout that?
NJ Turnpike and NY Thruway are toll roads. some of the best roads i’ve driven on. i don’t mind paying for roads if the money will go to fix them since it will save me on gas costs
NY/NJ/Connecticut and Pennsylvania there is commuter rail linking most suburbs to NYC, Philly and the the cities in NJ. and that’s in addition to the subway. the trains are full as well. even saturday nights
lol, I think you need to get on a train and take a night school class in American Geo 101.
that’s what airplanes are for
you’re “geographically challenged.” New York City is a minute fraction of the breadth of the United States. Your solution is that the rest of the country should commute on airplanes. Like I said, you need to get out of town occasionally.
Then there are the Pennsylvania toll roads, perennial pariahs, pothole profligates. It’s not a universal theme.
Glad you pointed that out, Derek.
PA Turnpike was the first modern toll road in the free world. When it opened in the 40s was sold by politicians as a progressive way for citizens to fund highway improvement. But more importantly, the promise made was as soon as the roads were paid off, the toll booths would be removed.
Yeah, right.
Today the PA Turnpike Commission is the most mismanaged, corrupt and cronyism of all PA government agencies going on for decades under both parties.
Bleeding a sea of red ink while PA motorists suffer one of the highest gas taxes in the top ten.
Signs when crossing the border should read, Welcome to Pothole Pride Pennsylvania.
PA Turnpike was the first modern toll road in the free world
Which explains why it’s so damned narrow. What it ended up funding was the local Mafia. Meanwhile, oddly, PA continues to be an oil producing state, which explains the higher gas taxes, not-at-all.
At least PA finally finished the Schuykill Expressway, which is actually drivable, usually as opposed to rarely.
That doesn’t contradict what he said. There are massive numbers of people in New York – and in many other cities – who use transit every day.
well of course it does.
no it doesn’t
some of the commuter rail lines your trip will run you around 2 hours to get into NYC. other areas around the US have the same thing.
I’ve already counseled you, please purchase a map of the United States of America.
I see bike lanes on highways all over Oregon. In Portland, striping for bike lanes runs about $5K per intersection, and there are a LOT of intersections. Portland has also spent billions of dollars on light rail. If one divides the annual operating budget of the administering agency by the number of rider trips per year it comes out to about $27 per rider trip. All of this uses up funds intended to build and maintain highways.
over here the most expensive housing is close to the train stations and goes down the farther you go. people who own multi-million dollar homes and condos and those who pay like $3000 or more in rent per month take the train all the time
some bike lanes here and people use them and the bike people are annoying
Once?
How about every year to fill potholes and then years later resurface with inferior materials in an endless cycle.
While at the same time yearly increases to salaries and benefits for road department unions.
Taxpayers: All pay and no say.
“Instead of yet another temporary “fix,” how about a clean, new tax code that actually works?”
Get rid of the lobbyists and their whores in Congress and we might get somewhere.
Trouble is, what noble and fine people are you going to replace them with? Negativity is easy. Having good ideas about how to make it better… not so much.
That’s an easy one.
Working class professionals with next to zero campaign cash that never held office.
Check with Eric Cantor.
heh.
Come on, it’s not in Congress’s best interest to actually SOLVE any problems like our tax code. There’s far more money in posturing and slapping bandaids on things than in actually, oh, you know … DOING THE JOB!
Did anyone read “slapping barmaids”?
Ned Ryerson? I don’t know where you’re headed, but can you take the rest of the day off?
Bing!
Doc, you nailed it big time.
Legions of lucrative salaried government professionals paid to solve problems.
BUT THEY NEVER GET SOLVED.
You fix the problem and you’re out of work. Same for duplicative government agencies working on the same problem. They would go away as well. Never happen.
Taxpayers fund zero sum game results year after year.
Coincidentally, government is the LARGEST employer in the U.S.
Not often does government leave money for years off the table by not creating a reasonable repatriation tax code. Cutting their noses and ours to spite their faces in the process. And as the years go by taxpayers do not benefit by what a fair code would produce and our infrastructure benefit by. Are we tired yet of our dufus “leaders?”
We need to abolish all other taxes and institute a national sales tax with food, drugs, housing, and services excluded. All money spent over and above those items would be taxed at perhaps 10 to 12 percent. An import tax on goods purchased abroad would prevent importation to avoid the sales tax.
Zeke, you’re smart.
besides tax payer equity, a big bonus of a national sales tax would be jackasses like Tricky Dick and Obama Messiah couldn’t use an abolished IRS for political blackmail.
They’d still have the judicial branch to spank people with
true, but that particular corruption has to be executed one case at a time, one paid-off judge at a time…while our beloved vermin of the IRS can screw great swaths of innocents with a single, bulk-mailing of registered letters.
Try 25 percent. That’s what it’ll take.
No, actually, the maximum necessary might be more like 14%. Don’t forget a sales tax has no loopholes. Even those with illegal, unreported income would end up paying a sales tax.
It would also drive up savings and investment capital, since unspent money would not be taxed. That would drive interest rates down, raising the stock market and stimulating the economy. There is no down side to this.
No. Another ‘holiday’ is just admitting stupidity then declaring a holiday from stupid followed by a return to stupid.
Permanent foreign profits tax reform has been SCREAMING at #MyStupidGovernment for decades. Get a pair Congress. Do your jobs for a change.
Seems like a good idea. I’d prefer they make a simple change like this and actually get it done rather than putting all chips in on a complete overhaul.
A complete overhaul to a better tax system would be ideal – but by the time everyone is done debating it and contributing ideas, not only will a huge amount of time have passed without any improvements, but the newly proposed system is likely be a giant mess of compromises and concessions to private interest groups like the current tax system. I don’t have enough faith in the committees of Congress or the leadership of the President to accomplish any reform as complicated as that.
This tax code hurts the American economy .At one time North America was was a manufacturing hub now we have unacceptably high unemployment , a disappearing middle class and most new jobs in the service sector .
Bringing the money home on a permanent basis will be good for everyone .
Tax the employees and the investors and let companies pay taxes on what the consume(land water etc)
Any tax cut that Mitch McConnell and the GOP are for is tainted. I don’t trust them. They do not have OUR interests at heart. Just those of millionaires and billionaires.
Thank you Dem talking points 101. Make sure you eat your veggies in school and don’t stay out too late partying.