As a Right Turn reader suggested on Tuesday, tax repatriation has a lot of sell to both sides of the aisle. Rep. Paul Ryan (R-Wis.) was championing the idea earlier in the year. He explained the idea on CNBC in June:
Joe Kernen: Everybody is talking about repatriation which would . . .
Rep. Paul Ryan: Good idea. Instead of every seven years, let’s have it every day. . . .
Joe Kerner: But the New York Times suggests that a lot of it went to shareholders. God forbid that happens.
Rep. Paul Ryan: We are locking up so much cash overseas. Our U.S. tax system is so internationally uncompetitive. First of all, we have the second highest tax rate in the industrialized world…
Joe Kerner: But then people will say they don’t pay taxes or that it’s all loopholes.
Rep. Paul Ryan: Sure you can say GE and others, but there are a lot of large corporations that pay these high effective tax rates. UPS was 34 percent this year. I talked to [Boeing CEO] Jim McNerney, their tax rate is extremely high — far higher than their competitors. So when you tax American producers a whole lot more than our foreign competitors tax theirs: they win, we lose.
It is also an idea favored by the top Republican presidential candidates. A spokesman for Texas Gov. Rick Perry told me: “The Governor would support significantly cutting the rate to spur investment and create U.S. jobs.” (The rate, I assume, he is referring to is the rate on monies returned to the United States.) Mitt Romney has spoken favorably about the idea as well.
Meanwhile, the Democrats plainly want more revenue. They have gotten the idea that a hike in rates is not in the cards. They might try to ram through “loophole” closings, but Republicans would insist that rates be reduced to offset the additional tax liability. But in the case of tax repatriation, Republicans are encouraging corporations to cough up more revenue. The president’s organized labor pal, Andy Stern, the former head of the SEIU, likes the idea, as does Sen. Chuck Schumer (D-N.Y.). Even Sen. Barbara Boxer (D-Calif.) is on board.
There is little downside to the idea. So long as some revenue is returned, and some taxes are paid, and jobs are created as a result it is a win. And if the parties really are looking for an easy start to meeting the $1.2 trillion mark required to avoid the across-the-board sequestration under the debt ceiling legislation, why not start with this?