Trump, like George W.
Bush before him, thinks a “tax holiday” on repatriated money will spur major
corporations who are currently hoarding money overseas to bring that money back
and invest it in America.
They fail to take into
account that, like other tax breaks, companies are not going to build new
factories, plants, offices or stores and hire more people if consumer demand
doesn’t warrant it.
Instead, they’ll
pocket the money they save in one of any number of ways, and regular Americans
won’t benefit one iota from it.
That’s what they’ll do with Trump’s tax holiday.
This isn’t speculation or conjecture, this is something to
which they literally admit.
Bank of America Merrill Lynch conducted a survey of more than 300 companies over the summer, asking them what they’d do with all that money they bring back from overseas. Their top two responses were the following: Pay down debt, and buy back their own stocks.
The idea that they’d use the money for stock buybacks is
especially upsetting since this is a known method for artificially driving
stock prices up. Rich executives and shareholders then get even richer.
Workers see no benefit from it, and the unemployed and
underemployed don’t see new job opportunities popping up.
Literally, the whole point
of this practice is to make the rich richer.
When George W. did this in
2004, companies voluntarily brought over $300 million back in from overseas.
$240 million went to stock buybacks.
Let that sink in for a moment – 80 percent of the money brought
back in from overseas went to stock buybacks. Companies took advantage of that
tax holiday to inflate their stock prices and get richer. There was no economic
growth from that.
Let that sink
in as well.
There will be no
economic growth from Trump’s tax break.
Companies are not so
broke that they can’t afford to expand without some of the money they’re
hoarding elsewhere and protection from repatriation taxes.
They don’t need this
money to build anything or hire new workers.
This is nothing more
than the government enabling companies to enrich themselves, possibly at the
expense of the Americans Trump claims to love so much.
The only way to spur
economic growth is to help the consumer class afford to spend their money
again. But we can’t expect that from Trump – he parrots Republican talking
points on this because he knows he can use them to make himself and his most
loyal rich buddies richer.
Author Rika Christensen is an experienced writer and loves debating politics. Engage
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