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LETTER TO THE EDITOR: Tax holidays benefit economy

- The Washington Times - Monday, December 5, 2011

J.D. Foster is correct: The repatriation tax holiday is not a stimulus ("Repatriation tax holiday not a stimulus," Economy, Nov. 30). Nevertheless, the proposed bill supporting a tax holiday would do tremendous good for the economy as a whole.

Opponents of the tax holiday argue the 2004 holiday produced few economic benefits and increased the incentive to shift income overseas. They portray large companies like Cisco as "tax dodgers." This is a misleading argument: U.S. subsidiaries operating abroad already pay corporate income taxes to their host countries. The additional tax is simply a cash grab by the United States government.

In fact, there's clear evidence from a wealth of academic studies that tax holidays have a positive effect on the economy. A tax holiday on the repatriation of foreign corporate earnings is a sound policy, but it is only a temporary first step in a needed overhaul of our international corporate tax policy.


Midwest director

Center on Finance, Insurance and Real Estate

The Heartland Institute


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