Honeywell CEO David Cote made news recently by calling for corporations to pay zero taxes in the United States, something he claims would boost the creation of jobs. But Honeywell has paid an effective tax rate of 2 percent in the last four
Honeywell CEO David Cote made news recently by calling for corporations to pay zero taxes in the United States, something he claims would boost the creation of jobs. But Honeywell has paid an effective tax rate of 2 percent in the last four years and cut 1,000 jobs in the U.S. during that time.
Cote argued that if corporations paid no taxes, they would reinvest that money in creating jobs -- an oft-repeated conservative and Libertarian claim that is rejected by almost all available evidence. Take Cote's own company, for instance. Honeywell is a profitable company. It made earnings of $825 million in 2011, an increase over the $708 million it made in 2010, and saw a related increase in the value of its shares, where profts on the shares from one year to the next were nearly $1.
During the last four years, Honeywell's effective tax rate was 2.0 percent, and that was only because it paid taxes in 2011. From 2008-2010, Honeywell had an effective tax rare of -0.7 percent. In the last two years, Honeywell cut 1,000 jobs in the U.S., while adding 11,000 jobs abroad. So despite paying basically no taxes in the U.S. in recent years, Honeywell continued to ship jobs overseas.
So much for lower taxes leading to more American jobs.
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