Today’s News & Commentary — December 28, 2016
At the New York Times, Leslie Picker disputes Donald Trump’s claim that a “tax holiday” would lead to an influx of cash that would, in turn, create new jobs. As Picker explains, “American corporations have kept an accumulation of earnings abroad because they would be subject to paying more taxes when they bring it home.” Current law requires companies to pay up to 35 percent of their earnings to the government, but Trump has said that he wants to offer a one-time rate of 10 percent to incentivize companies to bring their profits home. However, it is far from clear whether such a move would create new jobs. According to adviser’s of America’s top corporate executives, American companies are likely to use the money — estimated at $2 trillion — to acquire businesses, buy back their own stock, or pay off debt. These actions would generate profits for the companies, but would not create new jobs. Past experience bears that out: the last time Congress initiated a tax holiday, in 2004, the top 15 repatriating companies brought home $150 billion but reduced their work force by 20,931 jobs.
The Wall Street Journal weighs in on the strength of the U.S. dollar, which is currently at a 14-year high. A strong dollar increases purchasing power, which could boost retail sales and drive economic growth. However, what is “good for U.S. consumers and companies that purchase components abroad” spells a threat to U.S. manufacturers reliant on sales in overseas markets: it makes “their exports more expensive and their foreign earnings less valuable.”
United Airlines has reached a settlement with the Department of Labor over the working conditions for Newark Airport baggage handlers. The New York Daily News reports that a lawsuit was filed after inspectors “found baggage handlers too often were forced to lift heavy bags or perform other functions while leaning over, twisting or reaching overhead.” According to the Labor Department, United baggage handlers reported over 600 musculoskeletal injuries between 2011 and early 2015. As part of the settlement, United will install conveyor belts on jet bridges so that handlers do not have to manually lift and lower gate-checked passenger luggage. United will also hire an expert on repetitive stress injuries to evaluate injury risks.