Senator Carl Levin (D-Mich.) today released a report from his Senate Permanent Subcommittee on Investigations (Homeland Security Committee).  It asserts that the 2005 repatriation round was a failure.  In support of this, the report gives nine conclusions.  Below, each are refuted:

U.S. jobs were lost, not gained.  The report claims that the top 15 repatriating companies shed 21,000 jobs after the repatriation round.  This is a classic case of selective reporting.  From January 2005 to January 2008, the U.S.. economy created 5.4 million jobs.  Since that time, the economy has shed nearly 7 million jobs.  If anything, the repatriation round created jobs.  One can hardly blame the economic shocks totally-unrelated to and later than repatriation for the subsequent job losses.

Research and development expenditures did not accelerate.  This shows central planning run amok.  It's not enough for companies to only have to pay taxes once on income they earn overseas.  Now central planners in Washington want to tell them how to use it. 

Stock repurchases increased after repatriation.  As we have already pointed out, this is a good thing since it boosted the nest eggs of all Americans with IRAs, 401(k) plans, and traditional pensions.

Executive compensation increased after repatriation.  And what would have happened absent repatriation?  The fact is, highly-profitable companies need to attract top talent in order to stay competitive, provide value for shareholders, and continue to provide consumer benefits to all Americans.  This means paying a competitive, market compensation package for high-performing executives.

Only a narrow sector of multinationals benefited.  So if everyone can't benefit from an improvement to tax law, it can't happen at all?  Let's not forget that repatriation is not some gift to employers–it partly corrects a gross double taxation which shouldn't be there at all.  If other companies don't face this double taxation, more power to them.  But let's end the problem for those who do.

Most repatriation funds flowed from tax havens.  This makes no sense if you know how the repatriation round worked.  It doesn't matter where repatriated funds came from.  The fact is, this income should not have been facing international double taxation in the first place.  And when the economy felt the benefit of over $300 billion coming here, the jobs created and nest eggs replenished didn't ask what country the money came from.

Offshore funds increased after 2004 repatriation.  That's the point.  Because repatriation was for one year only, the double taxation in future years meant that companies would again have no incentive to bring money back home and pay taxes twice.  This will continue to happen until Congress permanently fixes the double taxation problem by moving toward a territorial tax system.  In the meantime, another round of repatriation could mean up to $1 trillion coming back to America in the next year.

More than $2 trillion in cash assets are now held by U.S.. corporations.  Corporations and households are building up liquid cash savings because of the uncertainty created by job killing policies by President Obama and Congressional Democrats.  Why the committee would highlight this is curious.  It has nothing to do with granting a temporary and incomplete reprieve from international double taxation.

Repatriation cost the Treasury money.  This makes no real-world sense.  The report claims that repatriation cost the Treasury $3.3 billion.  But this assumes that companies, in the absence of repatriation, would have brought money back home and dutifully paid double taxation.  This is absurd.  The only reason that over $300 billion came home that year was because of repatriation.  Thus, in a real-world analysis, repatriation actually increased federal revenues by $18 billion.