The notion that corporate tax holidays– congressional orders that allow corporations like Apple, Microsoft, Pfizer and others to bring overseas profits back to the US without penalty–create jobs is misleading and, based on previous such tax holidays mostly untrue.
According to an article in today’s NY Times Business section (a reliable source of real news), corporate tax holidays typically result in mergers and acquisition that typically result in job cuts.
…the last time Congress initiated a tax holiday, in 2004. The top 15 repatriating companies brought home $150 billion but reduced their work force by 20,931 jobs, according to a 2011 study commissioned by the Senate Permanent Subcommittee on Investigations.
In the coming months, Trump and his minions will be pushing for a new corporate tax holiday so that new jobs can be created. While this is certains to send shivers down the spines of most Trump supports, any jobs that will be created or not lost will not be the ones that midwestern small town employees or coal mines will benefit from. For example, the corporations with the largest amounts of overseas monies are Apple and Microsoft, two technology companies that are unlikely to create new jobs for coal miners, service employees or blue collar workers.
While many Trump supporters believe that Barack Obama and the Democrats were responsible for manufacturing job loss in the US, the real reasons for their loss was mechanization/robotization and globalization. The lost manufacturing jobs are never coming back–despite Trump’s assertions that they are—and the only way unemployed factory workers will find new work is through retraining or moving to urban centers where jobs for unskilled workers appear to be on the rise. Corporate tax holidays, income tax cuts and reduction in social programs will not lead to new job creation but to job loss.
Don’t let Trump destroy the economic recovery that President Obama brought to this nation.
Until next time…
Good Luck and Good Job Hunting