Companies Making the Dough, But Not Jobs

President George Bush will go down in the history books, but probably not for much to be proud of. How about the American Jobs Creation Act of 2004? I call this piece of legislation "Public Enemy #1 to Economic Development."

A recent Business Week article had this to say: "When it comes to corporate income taxes, it sure pays to be a multinational these days. U.S. companies fork over up to 35% of their domestic income in federal taxes. But for earnings from abroad, the tax rate is just 5.25% this year, thanks to the American Jobs Creation Act of 2004. The election-year bill was aimed at spurring the U.S. economy by encouraging U.S. companies with international operations to bring home profits they had parked in lower tax countries."

Business Week goes on to say: "One thing is clear, however: The money piling in from abroad as the result of the Jobs Creation Act has done little to actually spur hiring. In fact, six of the 10 companies repatriating the biggest totals are axing workers in the U.S. They include HP, which announced July 19 that it would cut its head count by 14,500 in the U.S. and abroad, and Pfizer, which has said it will shutter 20 factories with undisclosed U.S. job losses to lower costs by $4 billion by 2008."

What do I suggest? Click here to read my thoughts.