Here’s the Republican lie. Because corporations are holding billions of dollars overseas, giving them a tax holiday, where they pay only 5.25% income tax on repatriated profits (a 29.5% saving), will bring more money into the treasury. Corporations will take those repatriated funds and invest them here, where it will create new jobs. It sounds good as lies go, but all it really does is to encourage corporations to invest even more overseas, exporting even more American jobs, and waiting for the next tax holiday. The Republicans know they are lying. Shouldn’t you?

Several Congressional Republicans have been promoting the idea of enacting a tax repatriation holiday, which would allow multinational corporations to bring money that they have stowed offshore back to the U.S. at an extremely low tax rate (instead of the usual 35 percent). House Republicans have introduced legislation that would allow corporations to repatriate money at a 5.25 percent tax rate, while House Budget Committee Chairman Paul Ryan (R-WI) said this week that a repatriation holiday is a “good idea” that he’d like to see “every day.” This comes even though a similar tax holiday in 2004 failed to deliver its promised economic growth or job creation. And other problems with this sort of corporate tax giveaway is that it encourages corporations to shift assets offshore, in anticipation of the next holiday. After all, why pay taxes at 35 percent if you think Congress will keep giving you a chance to pay 5 percent? Research from Northwestern University has shown that corporations actually moved more funds offshore after the 2004 repatriation holiday, in anticipation of Congress enacting another holiday sometime, and that “by the end of 2006 the total ‘permanently’ reinvested abroad had exceeded the 2004 peak.”… [emphasis added]

Inserted from <Think Progress>