Cantor to administration: Corporate tax holiday not a distraction

The post comes two days after Cantor gave a speech during which he discussed a corporate tax holiday as a way to help spark economic growth. It also comes on the same day that Michael Mundaca, the assistant Treasury secretary for tax policy, looked to shoot down a push for that sort of policy.

In a blog entry of his own, Mundaca reiterated that the administration would be willing to look at how corporations’ offshore income is taxed within a comprehensive reform of the corporate tax code. But, while expressing skepticism about the economic benefits of a so-called repatriation holiday, he also said it would be a mistake to take “our eye off the ball” of a comprehensive overhaul in the name of repatriation. 

U.S. multinational companies have more than an estimated $1 trillion stashed overseas now, and corporations like Cisco and Oracle have been pushing for a sequel to a 2004 law that allowed them to bring offshore revenue back into this country at the reduced rate of 5.25 percent.

In his post, Mundaca said there was no evidence that last decade’s tax holiday sparked investment in the U.S. or created jobs. Critics of the idea have also said a second holiday would simply be a message to multinationals that they will be able to keep profits abroad in the future and wait for another holiday.

But Dayspring responded that the employment situation is much more dire than it was six or seven years ago.

“To make such a comparison is to ignore the reality of the current economy and the situation faced by millions of families and businesses in America today,” he added.