 |
|
|
|
|
||
 |
||||||
 |
||||||
 |
||||||
|
||||||
|
|
|
|
|
|
|
 |
||||||
|
May 9, 2003 REVIEW & OUTLOOK Sorry, Stanley Someone owes Stanley Works an apology. Last year, Connecticut politicians and the AFL-CIO shamed the tool and hardware company out of reincorporating in Bermuda so it could save $30 million in corporate income taxes. Attorney General Richard Blumenthal and GOP Congresswoman Nancy Johnson will no doubt now want to take some responsibility for the company's decision this week to lay off 1,000 workers and close nine facilities. But last year's Stanley uproar looks even stranger considering this week's tax machinations in Washington. GOP tax-writers are considering a proposal to cut the tax on repatriated corporate earnings to 5.25% for one year. That represents a giant leap down the Laffer Curve from the regular 35% U.S. corporate tax that Stanley was trying to avoid. A J.P. Morgan study of the proposal estimates that U.S. companies would bring home $300 billion that otherwise would have stayed overseas. Even at a much lower tax rate, this would generate an estimated $15 billion in revenue, according to the study. After all, 5.25% of $300 billion is more than 35% of zero. The proposal sounds sensible to us, though why limit it to just one year? Mountains of economic evidence show that corporations don't pay taxes; they merely collect them, with the tax cost absorbed by customers, employees or shareholders. It's just a shame that this year's tax bill will come too late to save the jobs at Stanley Works. |
||||||
 |
||||||