On Proposed Corporate Tax Amnesty, Actions Speak Louder Than Words
In a recent op-ed, Duke Energy CEO Jim Rogers wrote that enacting a huge corporate tax break for multinational corporations, like that proposed by Senators Hagan and McCain, would enable his company to bring back $1.2 billion in profits currently held overseas to create jobs and “accelerate our capital program investments in smart grid technology, retire and replace older coal plants, and build natural gas and renewable generation.”
Duke Energy’s actions during the previous corporate tax amnesty in 2004 cast significant doubt on Roger’s claims.
According to a report by the Institute for Policy Studies (IPS), Duke Energy “repatriated” roughly $500 million in profits held overseas during the 2004 corporate tax amnesty. Instead of using the influx of cash to invest and create jobs, Duke Energy responded by buying back $2.5 billion of its own stock. Buying back its own stock did help push up Duke Energy’s share price from around $19-21 in early 2004 to $27-29 in mid-2005, but it didn’t result in more jobs.
In fact, IPS reports that Duke Energy’s global workforce actually fell by more than 10,000 jobs from 2004 to 2010, third-highest among the corporate members of the “WIN America” coalition.
With consumer demand — the real driver of job growth — much weaker now than in 2004-05, Americans should be even more skeptical that a second corporate tax amnesty in less than a decade would do anything to create jobs for anyone who’s not a corporate tax accountant.