AI
Tuesday, September 02, 2025 7:29:03 PM
Many corporate tax provisions are so complex as to be indecipherable to the average person, and even to most lawmakers. A change in one percentage point here, an addition of a word there, the insertion of a date — any one of those can be worth millions of dollars to a corporation by giving it permission to do something previously prohibited.
"How four decades of tax cuts fueled inequality"
The section on taxing the foreign income of U.S. companies is full of gifts negotiated by lobbyists. Here, thanks to Congress, multinational corporations enjoy a special status: They can offset their U.S. income with credits and other write-offs generated by their foreign operations. One economist estimated that the U.S. Treasury in one year alone — 2008 — lost upwards of $90 billion in revenue as a result.
The top corporate tax rate was once 35% on income earned anywhere in the world. But U.S. corporations such as Procter & Gamble, Pfizer and Hewlett-Packard had long avoided paying that rate on overseas income by stashing profits in offshore tax havens.
As billions and billions of corporate profits piled up offshore and began to approach $1 trillion, the companies fretted. A group that included Microsoft, Intel, Apple and Coca-Cola formed a lobby called the Homeland Investment Coalition to pressure Congress to change the law so they could bring that money back to the U.S. — at a lower tax rate than domestic corporations pay.
For example, while a local construction company in Des Moines might pay 35% on profits from building a high school in Iowa, the coalition proposed in 2003 that multinationals with foreign earnings would pay only 5.25% in U.S. taxes on profits earned from selling products or services outside the country.
Lawmakers were happy to help.
“We want job creation,” Sen. Gordon Smith, a Republican from Oregon, said when the American Jobs Creation Act of 2004 was being considered with a provision he helped insert to make the tax holiday happen. “We want this to get to the shop floor, not to the corporate boardroom. … We want it to go to those things that will improve the productive capacity of American industry and the rehiring of American workers. We don’t want it to be part of some financial flimflam.”
But flimflam it was. After the bargain-basement tax break became law, companies did bring money back to the U.S. Nearly half the repatriated $312 billion came from just 15 companies, including Hewlett-Packard, Pfizer and Merck. The U.S. Treasury later estimated that the tax break benefited only 4% of American corporations.
How many jobs were created by the American Jobs Creation Act of 2004?
None.
[Insert:
Defiant Bush defends war in speech to UN
September 22 2004: President George Bush yesterday delivered an unrepentant speech to the
United Nations defending the war in Iraq and calling on the world to help rebuild the country.
https://www.theguardian.com/cartoons/stevebell/0,7371,1310041,00.html ]
https://publicintegrity.org/inequality-poverty-opportunity/taxes/unequal-burden/how-four-decades-of-tax-cuts-fueled-inequality/
"How four decades of tax cuts fueled inequality"
The section on taxing the foreign income of U.S. companies is full of gifts negotiated by lobbyists. Here, thanks to Congress, multinational corporations enjoy a special status: They can offset their U.S. income with credits and other write-offs generated by their foreign operations. One economist estimated that the U.S. Treasury in one year alone — 2008 — lost upwards of $90 billion in revenue as a result.
The top corporate tax rate was once 35% on income earned anywhere in the world. But U.S. corporations such as Procter & Gamble, Pfizer and Hewlett-Packard had long avoided paying that rate on overseas income by stashing profits in offshore tax havens.
As billions and billions of corporate profits piled up offshore and began to approach $1 trillion, the companies fretted. A group that included Microsoft, Intel, Apple and Coca-Cola formed a lobby called the Homeland Investment Coalition to pressure Congress to change the law so they could bring that money back to the U.S. — at a lower tax rate than domestic corporations pay.
For example, while a local construction company in Des Moines might pay 35% on profits from building a high school in Iowa, the coalition proposed in 2003 that multinationals with foreign earnings would pay only 5.25% in U.S. taxes on profits earned from selling products or services outside the country.
Lawmakers were happy to help.
“We want job creation,” Sen. Gordon Smith, a Republican from Oregon, said when the American Jobs Creation Act of 2004 was being considered with a provision he helped insert to make the tax holiday happen. “We want this to get to the shop floor, not to the corporate boardroom. … We want it to go to those things that will improve the productive capacity of American industry and the rehiring of American workers. We don’t want it to be part of some financial flimflam.”
But flimflam it was. After the bargain-basement tax break became law, companies did bring money back to the U.S. Nearly half the repatriated $312 billion came from just 15 companies, including Hewlett-Packard, Pfizer and Merck. The U.S. Treasury later estimated that the tax break benefited only 4% of American corporations.
How many jobs were created by the American Jobs Creation Act of 2004?
None.
[Insert:
Defiant Bush defends war in speech to UN
September 22 2004: President George Bush yesterday delivered an unrepentant speech to the
United Nations defending the war in Iraq and calling on the world to help rebuild the country.
https://www.theguardian.com/cartoons/stevebell/0,7371,1310041,00.html ]
https://publicintegrity.org/inequality-poverty-opportunity/taxes/unequal-burden/how-four-decades-of-tax-cuts-fueled-inequality/
It was Plato who said, “He, O men, is the wisest, who like Socrates, knows that his wisdom is in truth worth nothing”
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