U.S Senate Democrat Schumer allies with Apple, other multinationals on repatriation tax talks

“The campaign by U.S. multinationals to sell Congress on a corporate tax break for their overseas profits has looked so far like tilting at windmills,” Tory Newmyer reports for Fortune. “Even backers of the so-called repatriation tax holiday have quietly acknowledged it’s a political stinker that faces long odds in the Senate.”

“That may be about to change. Senate sources tell Fortune that Sen. Chuck Schumer (D-N.Y.), the No. 3 Democrat in the chamber and a one-time opponent of the holiday, is testing his colleagues’ interest in marrying the proposal to a new infrastructure program,” Newmyer reports. “The idea is to encourage corporations keeping a collective total of more than $1 trillion parked abroad to bring it home by temporarily lowering the tax rate to about 5% from 35%. The tax receipts from that holiday then would be dedicated to an infrastructure bank that would help fund new building projects.”

“While the repatriation holiday alone is a non-starter for most Democrats, pairing it with an infrastructure program could marshal labor support,” Newmyer reports. “It’s an approach backed by former Service Employees International Union president Andy Stern, who’s emerged as the most vocal proponent of the tax holiday on the left.”

Newmyer reports, “The team of corporate heavyweights behind the lobbying push for the holiday — including Apple, Cisco, Duke Energy, Google, Kodak, Microsoft, Pfizer, and Oracle — has shown some success softening up Democratic opposition recently. Last week, the centrist Democratic think tank Third Way hosted a breakfast on the topic that featured Sen. Kay Hagan (D-N.C.). ‘A repatriation holiday can encourage economic activity at a fraction of the cost of recent fiscal policy,’ Hagan said in her prepared remarks.”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

Related article:
U.S. companies push for tax break on foreign cash – June 20, 2011

16 Comments

  1. Why 5%? Why not make it 15%?
    Does it have to be that low to makeit worth bringing home?
    Clearly they’d like to bring it home. So what’s it worth?

    1. I’d rather have the private sector spend 95% of their earnings brought back to the US and the government spend 5% than 85%/15%. The government will waste the money while the private sector will put the money to work and employ Americans.

  2. Apple have less than both Google and MS in these offshore accounts. Apple may also be in better position to sit out this deal for a long term as they are a hardware company that manufactures mostly abroad.

    Google and MS, good luck. I would have recommended Apple to bow out of this alliance, but then again, guess they are smart by just sitting around. If the deal is offered they may move a little cash in at 5% penalty, otherwise, meh, they have a Foxconn in Brazil to write a fat check to for the time being.

  3. Why not link repatriation to reinvestment or redistribution? You want to bring it back, fine, here’s the 5% rate. Now build a plant, hire workers, or return the money to shareholders. Don’t want to do that, fine, here’s the 20% rate.

    1. Not a bad idea. (I don’t see how it can be administered, though.)

      The last time they had a “tax holiday” like this, there were almost no jobs created.

  4. As I said yesterday, for every 1000 workers you hired in the last 5 years when you accumulated those billions, you can bring back $1B tax-free. Since Apple has hired about 30,000 people in the US in the last 5 years, they’d probably have no trouble bringing all their cash back.

  5. proof positive that the Dems are no worse than the Repubs when it comes to being corporate whores.

    For as much patriotic lip service as corporations give, they repeatedly demonstrate how little they care about health or well-being or fiscal stability of any one country. Corporate officers don’t ever live downstream from their production facilities. And so the polluted, unsustainable rust belts grow…

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