As the tumult over the S&P downgrade of U.S. debt continues, so does the fleecing of America. We are discussing slashing safety net programs that protect average citizens without jobs in this economy. Meanwhile, Washington considers the Freedom to Invest Act of 2011 (H.R.1834), corporate welfare for "super citizen" companies that moved those jobs offshore and hid profits there, too. The bill's sponsor, Rep. Kevin Brady (R-Texas) received moral support last week from NC Democrat Sen. Kay Hagan:
"Until we see meaningful and sustained job growth, Senator Hagan is looking closely at any creative, short-term measures that can get bipartisan support and put people back to work," said Hagan spokeswoman Sadie Weiner. "One such potential initiative is a well-crafted and temporary change to the tax code that encourages American companies to bring money home and put it towards capital, investment, and--most importantly--American jobs."
The Bush administration tried this back in 2004, billed as a one-time-only tax giveaway, as Matt Taibbi discusses with Keith Olbermann in this clip. Then as now, the rationale for giving corporate donors a giant, sloppy, wet kiss is that letting them repatriate hundreds of billions at a steep discount creates jobs. Yet, Bush tax cut after Bush tax cut, the promised jobs never appeared -- proof to Republicans that we needed even more tax cuts.
Corporate executives took the money and ran.
Goldman Sachs -- yes, that Goldman Sachs -- dubbed Bush's American Jobs Creation Act the "no lobbyist left behind" act. (Hagan's Republican colleague, NC Sen. Richard Burr, then a congressman, was a cosponsor.) The Washington Post described the bill this way in 2005:
A measure designed to create jobs is instead rewarding the companies that are most adept at stashing overseas profits in tax havens, allowing them to bring money home at a severely discounted tax rate. Once here, that money is simply freeing up domestic profits that would have been spent on job creation and investment anyway.
Phillip L. Swagel, a former chief of staff on President Bush's Council of Economic Advisers, opposed that bill. He acknowledged the raw infusion of cash might have some sort of stimulative effect. But, Swagel observed, "[Y]ou might as well have taken a helicopter over 90210 [Beverly Hills] and pushed the money out the door. That would have stimulated the economy as well." The George W. Bush administration ended its economy-decimating, eight-year run with the worst jobs creation record on record.
Now, Third Way honorary co-chair, Senator Hagan, looks to be holding the football for another one-time-only, jobs-creating tax giveaway. Jobs are coming this time. Really.
Bloomberg reports that Cisco Systems, one of the tax holiday's biggest boosters, "has cut its income taxes by $7 billion since 2005 by booking roughly half its worldwide profits at a subsidiary at the foot of the Swiss Alps that employs about 100 people." (California-based Cisco lists three offices in North Carolina, including Research Triangle Park.) Cisco's real game, Bloomberg suggests, is to prop up its flagging stock prices with dividends and buybacks -- just what happened after the Bush tax holiday. Plus additional executive compensation and bonuses, Taibbi suggests. Meanwhile, U.S. companies are hoarding about $2 trillion in cash "they no longer need ... to weather the economic crisis." Furthermore, according to Bloomberg:
Nor are chief executive officers doing much in the way of using excess cash to build plants or buy new technologies. The same goes for innovating products or expanding into fresh territory. Given the employment numbers, it’s safe to conclude that they aren’t using the cash to add workers.
Which simply means it's time for Republicans and Democrats in Congress to tee up another "job-creating" tax cut for robber baron corporations.
Robber barons is too polite a term. Tax dodgers shouldn't be treated as royalty.
(Cross-posted from Dirty Hippies.)