Foreign profits earned by American companies are not taxed by the United States until the profits are ‘brought home’ (i.e., repatriated).
Republicans have floated the idea of a ‘tax holiday’ on repatriated foreign profits so that companies are given an incentive to bring overseas profits home, so they can reputedly be invested, and thus create jobs here in the States.
Not only is this a bad idea in terms of tax policy, but even discussing it is bad tax policy. Allow me to relate an anecdote to explain, but be patient. It will take a little while to get back to my point. Continue reading →
Maverick Economist Alfred Kahn has a penchant for candor that is both refreshing and dangerous in Washington. When he said that there is the possibility of a “deep, deep depression” if inflation continues to soar, the President was furious. Kahn responded by purging the word depression from his vocabulary and instead using “banana.” So he now says: “We’re in danger of having the worst banana in 45 years.”