As Americans continue to worry about jobs and the economy, some lobbyists in Washington are pushing for what they claim is the perfect solution – allowing multinational corporations to bring money from offshore subsidiaries back to the United States at an extraordinarily low tax rate.  They call it a “repatriation” tax break.
Proponents claim the lower tax rate will unleash jobs and investment, but when Congress actually tried it in 2004, the result was just the opposite. Congress allowed them to bring home offshore cash at a one-time-only tax rate of just 5.25 percent — a fraction of what most Americans pay and of the top corporate tax rate of 35 percent.  Proponents promised this special tax break would create jobs.  The legislation was even called the American Jobs Creation Act.
But a two-year study by the staff that of the Senate Permanent Subcommittee on Investigations, which I chair, just found that the companies that took that tax break failed to create new jobs and instead boosted executive paychecks. It was a complete bust.
My subcommittee surveyed 20 major multinational corporations, including the 15 companies that repatriated the most under the 2004 law, and found that the billions in offshore funds weren’t used to hire workers. Instead:
• Despite repatriating more than $150 billion at a reduced tax rate, the 15 multinationals with the biggest repatriation totals eliminated more than 20,000 U.S. jobs.
• Those corporations also reduced their spending on research and development, despite arguments that the tax break would help U.S. companies spend more on developing competitive products.
• While payrolls shrank, these corporations spent more money on repurchasing their stock (to increase the stock price) and on increasing executive pay. Stock repurchases at the top 15 repatriation companies went up by 16 percent the first year after the tax break and 38 percent the second year. Executive pay went up 27 percent the first year after the tax break and 30 percent the next.
• The nine out of 10 U.S. corporations that don’t move jobs overseas and don’t have big stashes of overseas cash got no benefit from the tax break we gave to their competitors. Quite the opposite; they were put at an unfair disadvantage.
•Much of the money these corporations brought back came from offshore tax havens – countries with secrecy laws and a history of facilitating tax dodging.
• In the years since the 2004 repatriation, the corporations went at it again and actually increased the amount of money they keep offshore to avoid paying taxes.
That growing stash of offshore money is the biggest problem with repeating this failed tax policy. Clearly, in the years since 2004, companies have pushed more money offshore in hopes of another tax windfall. If we provide that windfall, we will give even more encouragement to U.S. companies to move jobs, operations, and investments offshore, in hopes of another future tax break. Rather than encouraging investment in America, we would be encouraging U.S. companies to send their money elsewhere, making our economic crisis even worse.
Think about it this way: If someone could invest $100 in Canada, and pay only 5 percent in taxes, or invest in the United States and pay up to 35 percent, wouldn’t they invest in Canada?  The result would give the U.S. economy and companies that don’t move jobs overseas a kick in the teeth.
The nonpartisan Joint Committee on Taxation, which evaluates tax proposals for Congress, has estimated that a new repatriation tax break would cost the treasury $80 billion over ten years, a cost that would have to be paid for through more spending cuts or tax increases.
In addition to costing Uncle Sam a bundle and hurting investment in America, a tax break that rewards multinational corporations for stashing money offshore to avoid U.S. taxes would be a slap to honest taxpayers and to the domestic firms that choose to do business and create jobs right here at home. It would reward the few at the expense of the many, making the U.S. tax code even less fair for average taxpayers.
An army of lobbyists hopes Congress and the American people won’t look at those facts.  They are wagering that, in this time of economic distress, Congress will fall for the same argument as before.  But facts are stubborn things, and I hope the facts can break through the lobbying frenzy for a tax giveaway that helps a few companies but would actually damage our economic recovery.

Carl Levin is the senior U.S. senator from Michigan.