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The North Carolina Corporation Pushing Senator Hagan and Others to Support a Repatriation Amnesty
In June, the organization Third Way hosted an event in Washington at which a group of politicians, corporate leaders and others argued in favor of a tax amnesty for profits U.S. corporations hold offshore. (See the transcript of the event.) CTJ and other groups have long opposed a repatriation amnesty, noting that it provides the greatest benefits to those companies that simply shift their profits into tax havens.
Jim Rogers, the CEO and president of the North Carolina company Duke Energy, spoke in favor of a repatriation amnesty, as did North Carolina’s Democratic Senator, Kay Hagan.
Towards the end of the event, the audience members asked a series of questions that the panelists were unable to answer adequately. For example, a CTJ staffer commented to the panelists:
If I understand, I think what you’re saying is that the nonpartisan Congressional Research Service was wrong in issuing a study that said that the last time this was tried it did not create jobs, and that the nonpartisan Joint Committee on Taxation was wrong recently when it had its analysis saying that if we repeat this repatriation holiday, it will cost $79 billion over 10 years, partially because some of those profits would have been brought back anyway; partially because, ultimately, corporations will shift even more profits offshore, meaning even if your only goal is to get more of these profits into the U.S., even in that limited goal, you fail on that. So do I understand correctly that you think that the nonpartisan Congressional Research Service and the nonpartisan Joint Committee on Taxation are incorrect and Congress should ignore these analyses?
We were not entirely surprised that no one had a good response to this. What did surprise us, however, was that Duke Energy is already avoiding corporate income taxes, which we learned as we prepared our major corporate tax study.
Duke Energy had profits of $5.5 billion over the 2008-2010 period but received $216 million from the IRS over that period, for a three-year effective tax rate of negative 3.9 percent.
Despite its already remarkable tax subsidies, Duke Energy now wants to bring its offshore profits back to the U.S. and pay almost no U.S. taxes on them.