Bachmann "open" to eliminating corporate taxes
Last Updated 1:50 p.m. ET
Republican presidential candidate Michele Bachmann offered muted support Sunday for Sarah Palin's recent call to eliminate all corporate taxes, noting that she's "open" to the idea of cutting corporate tax rates to zero percent - but not calling for it outright.
The Minnesota Congresswoman, appearing on CBS' "Face the Nation" Sunday, said "we could go that route" on corporate tax rates, but she noted that "we'd have to have a fundamental restructuring of the tax code" first if taxes paid by companies were to be eliminated altogether.
"What we would have to do then is re-jigger other elements to define revenue and what revenues would be needed to the economy," Bachmann told CBS' Bob Schieffer. "We certainly could get down to a zero percent corporate tax rate."
Palin, speaking at a Tea Party rally in Indianola, Iowa on Saturday, blasted President Obama's relationship with "corporate cronies," and called for the elimination of federal corporate income taxes as a job creation measure.
Bachmann said she was open to having a debate on Palin's plan. She declined to support such a move outright, however, and said that the first thing she would do if she were president would be to repatriate profits U.S. corporations earned overseas.
"The very first thing that I would do today as President of the United States is to bring about repatriation of income from American corporations that have earned money overseas," Bachmann said.
Citing a report from CBS News' 60 Minutes, Bachmann noted that "we have over $1.2 trillion in earnings that we could bring immediately to kick-start the economy which would be a true stimulus.Extra: How to shift profits
Boosters for exempting U.S. companies from paying taxes on their profits earned overseas suggest that doing so would increase investment and job creation domestically.
"We could bring that money in at a zero percent tax rate," Bachmann said. "Have it be zero percent through December 31. And then have it permanently fixed at 5 percent. After that I think we do need a reduction permanently in the corporate tax rate."
A 2009 paper by the National Bureau of Economic Research studied a similar tax holiday for repatriating overseas profits, instituted in 2004 by the Homeland Investment Act. Companies were to use money brought back under reduced tax rates for investments in hiring and training workers, infrastructure and capital investments, R&D, etc. The bill's backers predicted more than 500,000 jobs would be created over 2 years.
U.S. multinationals repatriated $298.7 billion in 2005, five times what they brought back the previous year. But according to the NBER report, repatriations were associated not with job creation but "significantly higher levels of shareholder payouts" through stock repurchases. Congressional Research Service Firms that took the greatest advantage of the tax holiday, the report continued, "did not increase domestic investment or employment, instead returning virtually all of the cash they repatriated to shareholders."
In 2009 the Congressional Research Service noted that a number of companies executed mass layoffs in 2005-2006 after repatriating billions of dollars from overseas at lower tax rates, including Pfizer ($37 billion, 10,000 laid off), Merck ($15.9 billion, 7,000 laid off), Hewlett-Packard ($14.5 billion, 14,500 laid off), Honeywell ($2.7 billion, 2,000 laid off), Ford ($900 million, 30,000 laid off), and Colgate-Palmolive ($800 million, 4,000 laid off).
At the above companies, which repatriated $71.8 billion, 67,500 jobs were eliminated.
Also appearing on "Face the Nation," fellow Republican presidential candidate Jon Huntsman told Schieffer that a zero percent corporate tax rate was a "great political bromide" but that "I know how difficult it is to make the numbers work."
"You have to find the revenues that you can reinvest back in the tax code to bring town the rate for everybody," he said.
Signs and portents
Bachmann also addressed comments she made last week suggesting that a string of significant natural disasters that recently hit the East Coast were a sign that God would approve of less government spending.
"Obviously I was speaking metaphorically," Bachmann told Schieffer.
When pressed as to whether or not she believed God uses the weather to send messages on earth, however, Bachmann was evasive.
"I believe in God," she said. "I'm not ashamed to say that I believe in God. I'm a woman of faith and a woman of prayer. But the comment that I made right then was a metaphor. That was very simply what I was doing."
- Lucy Madison
Lucy Madison is a political reporter for CBSNews.com.Follow on Twitter »
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