Layoffs Seem to Conflict With Tax Break

Here's a stunner (in the Duh, of course it's not working the way Congress intended sense): Layoffs Seem to Conflict With Tax Break Meant to Propel Job Growth. In response to a WTO ruling on how the US taxes or provides subsidies to US businesses with international outposts, the US Congress passed a one year law to allow for the repatriation of foreign income at a reduced tax rate, while also repealing the subsidy which caused conflict with the WTO. The thinking was that businesses would take advantage of the break t pur the money back into their businesses, rather than into executive bonuses. Anyway, according to the WSJ: There is more evidence that a tax break intended to boost U.S. jobs isn't getting the job done.

Consider several major companies that say they are considering bringing home hundreds of millions of dollars in foreign profits under a tax holiday that is part of the American Jobs Creation Act passed last year. These include National Semiconductor Corp., Sun Microsystems Inc. and Colgate-Palmolive Co. -- all of which recently cut staff. These companies' example calls into question how effective "repatriation" will be in spurring new jobs, adding to already reported concerns about the wiggle room the law gives companies in how to spend the money.

But the law gives companies flexibility to use the cash for purposes with indirect links to job creation at best. [...] The Treasury's guidelines require only that companies attest that the spending "likely would have direct or indirect positive effects on employment in the United States."