Apparently, Democrats learned nothing from their recent election debacle. They are still promoting the idea of allowing large multinationals to avoid paying their taxes. Former Michigan Senator Carl Levin has joined Republicans in calling for a “tax holiday” on offshore corporate profits, and using the windfall to fund infrastructure projects:
As divided as our country may be, one issue where there appears to be strong bipartisan agreement is the need to rebuild our nation’s infrastructure. Democrats have supported this for years, and President Trump has made it one of the centerpieces of his domestic program. The question is how we’re going to pay for it. Many are eyeing the huge pot of money — $2 trillion to $3 trillion — sitting offshore courtesy of U.S. corporations who have stashed it there, because they don’t want to pay taxes on it.
With the infrastructure proposal looming large, that pot of money has become an attractive answer. But the big questions are what tax rate reduction would be a sufficient incentive for corporations to finally pay the tax owed on their offshore profits.
Hilary Clinton made a similar proposal during the campaign, as have other Democrats in Congress. This policy would be a mistake for many obvious reasons. First, it rewards bad behavior on the part of large multinationals. The law is clear on the amount of tax owed, and corporations should pay it just like everyone else has to. The second problem is that these infrastructure projects would be almost entirely for roads and highways; i.e. don’t expect it to pay for subways or high-speed rail. And finally, this tax windfall would be just a one-time event. It does nothing to address the long-term decline in gas-tax revenues, which is the root cause of the infrastructure deficit.