The bill would reduce the tax on profits 75% of the normal tax rate – from 35% to 8.75 %. This would be the second tax holiday in a decade. In the first, in 2004, most corporations did very little hiring in the United States after the bonus and invested most of the money in bonds and other assets. Some, encouraged by the bonanza, actually laid off Americans and moved more business to China.
If they stay in the U.S. they have to pay more in salaries and their profits are taxed 35%. If they move offshore, they pay their foreign employees less and get a tax holiday on top of it.
The 8.75% can become even lower with deductions and tax credits.
Steve Jobs of Apple computers moved all the company’s manufacturing to China. And he was not alone.
It is that money, when it is paid to the higher income investors in New Jersey, which I propose to tax 50% after the federal tax.