How To Bring Profits Home

IBD Editorials ^ | April 11, 2011 | HERMAN CAIN

[Kaslin]

For decades, Democrats have insisted on taxing profits generated by U.S. companies in foreign countries, because they thought it would force businesses to keep the investments in the U.S.

Wrong!

The unintended consequences were just the opposite effect. A business-friendly environment always works better than force.

President George W. Bush was able to get the repatriated tax rate lowered to 5.25% in 2003, and nearly $350 billion came back into our economy. Today, it is conservatively estimated that nearly $1 trillion might come back if we take the tax on repatriated profits to zero.

Yes, zero!

Our economy gains nothing as long as those profits remain abroad. Common sense says we have everything to gain if we let those profits come home without a tax.

Some multinational businesses might use those profits to expand operations here in the U.S., which would mean more job opportunities for the 15 million unemployed people. Or, maybe companies would increase salaries and wages for their employees, or they might pay a dividend to their stockholders.

And remember, many senior citizens depend on their dividend income, if they have any, as a way to supplement their paltry Social Security checks. With the price of gasoline doubling in the last two years, and expected to go even higher along with the cost of everything else, a dividend increase would be some welcome relief to many seniors.