Corporations are ramping up lobbying efforts for a year-long tax break on foreign profits, reports Politico's Mike Zapier. Backed by the likes of Apple, Oracle, and Microsoft, the "repatriation tax holiday" would reduce the tax on foreign profits from 35 percent to 5 percent, ostensibly creating an incentive for multinational companies to bring $1 trillion in overseas accounts back to the United States.
Such a plan, frequently discussed during the recession years, seems to meet the "out innovate" directive put forth President Obama in the State of the Union. Treasury Secretary Timothy Geithner, however, isn't on-board. "We are not going to look at a holiday outside the context of comprehensive reform,” Geithner said in January. Federal Reserve Chairman Ben Bernanke also opposes the plan
Zapier believes the plan will sink-or-swim based on well it is framed. The team of lobbyists--which include "former GOP Rep. Jim McCrery, the ex-ranking member of House Ways and Means, and Jeffrey Forbes, former chief of staff to Senate Finance Chair" along with the PR firm of former Anita Dunn, Obama's fomer director of communications--will attempt to present the measure as "a trillion-dollar economic stimulus plan at little cost to taxpayers," but Zapier says that could be a "tough sell to a public wary of giving big business a free lunch." And while the appeal of a tax holiday is understandable, The Wall Street Journal's John McKinnon says it could lessen "political leverage for winning broader tax overhaul" by providing a short-term fix that fails to address larger problems big business and the administration see in the current tax code.
A similar tax holiday in 2004 led to the repatriation of $315 billion in funds.