Fox News turned to Douglas Holtz-Eakin to push for a tax holiday on multinational corporations to allow them to repatriate their overseas profits and furthered the discredited claim that it "could spur job growth." Fox did not disclose that Holtz-Eakin is helping the U.S. Chamber of Commerce push for just such a tax holiday; but studies show that a similar effort in 2004 did not create jobs, and many corporations that benefitted from that repatriation actually cut jobs.
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Fox Pushes Claim That Corporate Tax Holiday "Could Spur Job Growth" ...
Fox News: "Repatriated Corporate Cash Could Spur Job Growth." During the October 11 edition of Fox News' Happening Now, the following graphic appeared on screen:
[Fox News, Happening Now, 10/11/11]
... And Let Douglas Holtz-Eakin Downplay Studies That Show Tax Holidays Don't Create Jobs
Fox Turned To Douglas Holtz-Eakin To Address Studies Showing That Tax Holidays Don't Create Jobs. During the segment, co-host Gregg Jarrett discussed the merits of a "tax holiday" as a possible stimulus, with former Congressional Budget Director Douglas Holtz-Eakin. Jarrett noted that Holtz-Eakin "endorsed" the proposal and asked him to respond to criticism that a 2004 tax holiday "didn't really work so well." [Fox News, Happening Now, 10/11/11]
But Fox Didn't Point Out That Holtz-Eakin Was Commissioned By The Chamber Of Commerce To Push For A Tax Holiday
Holtz-Eakin Wrote A Report On Corporate Repatriation For The U.S. Chamber Of Commerce. Holtz-Eakin was commissioned by the U.S. Chamber of Commerce to write a report claiming that "[t]he short-run stimulus provided by repatriated dollars would speed the pace of economic recovery, increasing GDP by roughly $360 billion and creating approximately 2.9 million new jobs." [U.S. Chamber of Commerce, August 2011]
In Fact Studies Show A Tax Holiday In 2004 Did Not Create Jobs
Heritage Foundation Economists: Repatriated Profits "Did Not Increase Domestice Investment, Job Creation, Or Research And Development" When It WasTried In 2004. Discussing a 2004 initiative to use a so-called "tax holiday" to repatriate corporate profits, Heritage Foundation economists JD Foster and Curtis Dubay wrote: "The evidence clearly shows that these repatriated earnings did not increase domestic investment, job creation, or research and development." [Heritage Foundation, 10/4/11]
CRS: Evidence Does Not Show That Corporate Repatriation Increased Employment. In a report analyzing the stimulative impact of tax cuts on repatriated corporate profits, the Congressional Research Service stated of the 2004 repatriation policy: "While empirical evidence is clear that this provision resulted in a significant increase in repatriated earnings, empirical evidence is unable to show a corresponding increase in domestic investment or employment." [Congressional Research Service, 5/27/11]
NBER Economists: 2004 Corporate Repatriation "Did Not Lead To An Increase In Domestic Investment, Employment Or R&D." In a June 2009 working paper for the National Bureau of Economic Research, economists Dhammika Dharmapala, C. Fritz Foley, and Kristin Forbes analyzed the impact of a tax holiday in 2004 and wrote:
Repatriations did not lead to an increase in domestic investment, employment or R&D -- even for the firms that lobbied for the tax holiday stating these intentions and for firms that appeared to be financially constrained. [National Bureau of Economic Research, accessed 10/12/11]
CBPP: Many Analysts Reported "No Evidence" 2004 Tax Holiday Increased Job Creation. Explaining that proponents for a tax holiday for corporate repatriation in 2004 also promised "a large number of new jobs" and a boost to economic growth, the Center on Budget and Policy Priorities noted:
These promises were not borne out. As researchers at the National Bureau for Economic Research, the Congressional Research Service, the Treasury Department , and outside analysts have reported, there is no evidence the holiday had any of these positive effects. To the contrary, there is strong evidence that the repatriated earnings were used primarily to benefit corporate owners and shareholders, and that the restrictions Congress imposed on the use of the repatriated earnings to ensure they were invested in the United States were ineffective. [Center on Budget and Policy Priorities, 6/23/11]
Many Firms Actually Cut Jobs After Repatriating Overseas Profits
IPS: 58 Corporations Benefitting From 2004 Tax Holiday Cut Nearly 600,000 Jobs. Economic researchers at the Institute for Policy Studies studied the effects of the 2004 tax holiday and found:
Following a tax holiday on repatriated foreign earnings in 2004, 58 corporations that benefitted from the holiday slashed a total of nearly 600,000 jobs. These 58 giant corporations accounted for nearly 70 percent of the total repatriated funds and collectively saved an estimated $64 billion from what they otherwise would have owed in taxes. [Institute for Policy Studies, 10/4/11]
CBPP: "Many Of The Largest Beneficiaries Of The Tax Holiday Cut Jobs." The Center on Budget and Policy Priorities also noted that "many of the largest beneficiaries of the tax holiday cut jobs in 2006 despite overall economy-wide job growth -- and used the repatriated funds instead to repurchase stock and pay dividends." [Center on Budget and Policy Priorities, 6/23/11]
Senate Governmental Affairs Committee: "The Top 15 Repatriating Corporations" Cut Jobs. Demos' Policy Shop blog noted that a Senate committee report on the 2004 corporate tax holiday found:
After repatriating over $150 billion under the 2004 American Jobs Creation Act (AJCA), the top 15 repatriating corporations reduced their overall U.S. workforce by 20,931 jobs, while broad-based studies of all 840 repatriating corporations found no evidence that repatriated funds increased overall U.S. employment. [Demos, Policy Shop, 10/12/11]