The big battle over overseas profits

Pfizer is one of a group of corporations that could benefit from a tax holiday. | AP Photo

Goaded by battalions of corporate lobbyists, members of Congress are working to give a select group of U.S. multinational firms like Oracle, Apple and Pfizer a lavish tax break on $1 trillion stashed offshore.
A number of trade groups and corporations that would benefit have joined in a coalition called WIN America. New lobbying disclosure reports show that the group and its member firms have spent millions of dollars, and employed dozens of lobbyists, to press for the tax break, according to an analysis by iWatch News.

The goal is to generate jobs and investment, but the offshore tax holiday was tried before, in 2004, and the lion’s share of the benefits went not to unemployed workers and their families but to corporate shareholders and executives.

Defenders of the tax holiday say bringing money back from overseas will be a net positive, adding an infusion of cash into the economy and creating opportunities for new jobs. The New America Foundation has estimated that the boost to the economy could ultimately lead to the creation of from 1.3 million to 2.5 million jobs.

But other estimates say the proposed tax holiday could end up costing the Treasury $40 billion to $80 billion over the next decade, and critics are asking why corporations and their shareholders should get a tax break on overseas profits, especially at a time of high unemployment. The high cost of the measure is one reason that its prospects for passage are mixed.  READ MORE