The jobs act that created no jobs?

Would you like to pay only 5 percent on the income you make instead of 35 percent?

Oh, I’m sorry: You’re not a multinational corporation that has “amass[ed] profits abroad in tax havens like Ireland, Bermuda, Luxembourg and Singapore.”

A New York Times editorial today cries foul over a one-time corporate tax break that was supposed to spur creation of jobs. (See my previous screeds on the American Jobs Creation Act here and here.)

Well, that act, according to The Times, created no jobs:

A month ago, Hewlett-Packard announced it would lay off 14,500 workers by November 2006. Meanwhile, the company is about to repatriate $14.5 billion in profits it has in overseas accounts at a measly tax of 5.25 percent – an 85 percent discount off the normal corporate rate. The cut-rate repatriation, offered by Congress to American companies that bring profits held in foreign lands home in 2005, was sold to the public as a one-shot deal to generate cash for new hiring. But as its critics warned, the tax cut is functioning instead as a handout for America’s most profitable companies.

Hewlett is just one example. Normally, the tax on a $14.5 billion repatriation would be about $5 billion. Because of the bargain rate in 2005, Hewlett expects to pay roughly $800 million. Hewlett also expects its layoffs to cost the company about $1 billion. Thus, in Hewlett’s case, the tax holiday has not only failed to create jobs, but has also more than covered the cost of cutting workers from the payroll.

Dozens of other companies are also bringing billions home with no mention of new hiring.

The editorial names other corporations using this tax dodge to repatriate funds not to create jobs but to buy back stock. That, says The Times, “enriches shareholders by increasing earnings per share.”

That’s not creating jobs. But the act was written as an incentive to create jobs. Otherwise, why was the bill named as a job creation act?

Hmmm. Does that mean politicians and corporations lied about the legislative intent when they pushed this gargantuan corporate giveaway through Congress? Gosh.

FYI: The Senate voted 69-17 to accept the conference report as the final version. See how your senator voted here. See the final 207-16 House vote on the conference report here.

Now e-mail the twits who voted “yea” and ask ’em when they’re gonna to do something for you — the citizen, the voter, the little guy.

Advertisement