During the most recent Republican presidential debate, I sat watching to see if a frontrunner or serious candidate might emerge among the clowns and the scandals waiting to happen. Ron Paul, the libertarian standard-bearer and stalwart champion of deregulation, whose name rarely fails to surface when election time draws near, was the only candidate to answer the questions asked of him. Not only that, he answered them in very concrete terms, avoiding the escapism so prevalent in many of his opponents’ answers.
It should have been no surprise to long-time political enthusiasts that in his answers, Paul trotted out many of his most well-known (and least popular) political ideas. He demanded that other candidates take a stand on whether the Fed ought to stick around or be shut down, he lectured on free market values versus overregulated government, etc. Of particular interest to me (primarily since it runs against common sense) was Paul’s call to end the Repatriation Tax.
Now, at this point in our development as a nation, it should never be surprising to hear a Republican candidate rattle the tax-cutting sabre every election period. No one, bleeding heart liberal or right-wing conservative, enjoys seeing his or her hard-earned money shoot straight from the paycheck to Federal coffers. Nevertheless, as with any political policy, the implications of cutting taxes ought to be examined carefully. I’d like to take a look at exactly what the Repatriation Tax is, how it stands now, and how removing it would not only result in the opposite of what Paul and his supporters want, but would also be devastating to Federal revenue and to any efforts to curb the excesses of multinationals.
Simply put, failing to tax income made outside the U.S. that comes into the U.S. would only spur multinational corporations to invest more heavily in non-regulated countries which offer no minimum wage or regulated working conditions.