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Politics : I Will Continue to Continue, to Pretend....
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To: Sully- who wrote (11860)8/25/2005 9:11:43 PM
From: Sully-   of 35834
 
Repatriation

Kudlow's Money Politic$

The front page of today's FT reports that the Treasury proposes to crack down on companies shifting profits to low tax jurisdictions. This is stupid. Of course companies will roam the globe for the lowest taxes and the highest returns. That's what investors want.

A much better idea is the Invest-In-USA act, which permits American firms to repatriate their foreign earnings back to America at a tax rate of 5.25%. Unfortunately, this is only a one-year bill. Then the rate goes back to 35%. But the results are startling, according to the American Shareholders Association.

ISI finds that 91 companies in the S&P 500 have repatriated more than $191 billion of foreign profits back to America for investment in the US so far this year. We are on track to get JP Morgan's forecast of $350 billion by year's end.

Tax something less and you get more of it. It's a basic supply-side incentive.

And with these new funds, Allen Sinai expects significantly more US growth, capital spending and job creation.

Instead of punishing US companies for acting rationally on behalf of shareholders, the US treasury should get our corporate tax rate back in the direction of 20%, so we are competitive worldwide.

lkmp.blogspot.com
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