It used to be that millions, then billions would get our attention. Since 9/11, and the estimated trillion dollars of damage that did to the economy, only trillions gets anyone’s attention these days. Yet that is just what US corporations have “parked” overseas, over a trillion dollars in profits that they show no intention of returning to the US. Why? Those profits would face a 35% tax, and so GE will keep its estimated $94 billion, Pfizer its $48.2 billion, Exxon its $35 billion and Microsoft its $29.5 billion overseas, all at a time when an economic stimulus is desperately needed in the US, the engine of the world economy.
Unfortunately, unless addressed this trend will only get worse. Moody’s estimates that the profits of tech companies, such as Microsoft, Apple and others “parked” overseas will double by 2013, precipitating an even greater decline in American economic power.
The solution seems simple and common sense. Why not do what many states and municipalities do to enhance revenues or stimulate the local economies and declare some sort of tax amnesty on those foreign profits if they are repatriated to the US? That amnesty need not be a total, no holds barred amnesty, but perhaps an amnesty in which companies would have to pledge to use their profits to create jobs in the US, or perhaps be taxed at a lower, say, 15% rate. Further, the amnesty need not be permanent. It might be that it would be much more effective as a temporary, say 3 to 6 month amnesty.
That no politician has even hinted at this idea is fairly astounding. Is it possible that President Obama might fear that such an amnesty might offend his anti-big business base. Republicans might well fear something that would give the economy a boost fearing that such a move would almost guarantee an Obama re-election. Either way, the short-sightedness of both parties cannot be permitted to continue to damage the American economy. Frankly, I do not care who is the first politician to propose this idea, I only hope that someone does and does it soon.