Corporations domiciled in the U.S. have to pay that 35% tax on all income from domestic operations each quarter as it is earned. The problem is that profits earned overseas are not taxed at all until the money is repatriated. This gives U.S.-domiciled multinationals a huge incentive to reinvest foreign profits tax-free in foreign countries rather than back home in the U.S. The possibility of a repatriation tax holiday from time to time only strengthens this incentive, because there is the possibility that foreign profits, unlike domestic profits, might entirely escape U.S. taxation.

A real fix would require the taxation of all foreign profits as they are earned at the full rate, less a credit for any foreign tax paid. Maybe after we apply it fairly, we could talk about reducing that 35% rate, as it does seem a bit steep, but if we are ever to get our economy back on track, we need to stop this stupid policy of incentivizing U.S. corporations to invest capital and hire laborers in foreign countries at the expense of our domestic work force.