It’s concerning, and still a little surprising, that Australia’s pre-eminent business lobby group, and its members, feel they can lie so blatantly about an important public policy issue as they are doing on company tax cuts.

In an effort to revive support for what would, at over $60 billion, be the greatest tax avoidance scam in Australian history, the Business Council is releasing a CEO survey to demonstrate that the extra money gifted by companies via the government’s company tax cut would be used for investment. The survey, accompanied in the Financial Review by an op-ed from Business Council of Australia head Jennifer Westacott and backed by Malcolm Turnbull, purports to show four out of five CEOs would use tax cuts to increase investment.

But US experience demonstrates they’re lying.

As Crikey recently reported, history shows US companies use tax windfalls to engage in share buybacks that juice their share prices, driving up executive remuneration. But never mind facts, let’s ask US CEOs themselves what they’d do with the current round of corporate tax cuts being offered by Trump. Three weeks ago, Reuters reported that “U.S. corporations are saying they would use a tax reform windfall to buy back shares, retire debt and other shareholder-friendly moves, in recent post-earnings calls with investors and securities analysts.” One example reported by Reuters:

“The chief executive of Honeywell International Inc (HON.N), Darius Adamczyk, said tax reform will ‘offer greater flexibility for Honeywell,’ adding that the industrial conglomerate would invest more cash in the United States to pay for dividends, mergers and acquisitions, share buybacks and paying down debt.”

Why are US CEOs being so open about this? Because Americans know that they’ve been lied to before about how tax cuts will result in additional investment. Let’s go back to the American Jobs Creation Act 2004, a Dubya-era act that allowed corporations to repatriate foreign-earned income — held outside the US because of its 35% tax rate — at the much lower rate of 5.25%. That saw around $300 billion in income returned to the US.

At the time of the Act, Republicans lined up in droves to insist that the lost tax income was worth it because the repatriated money would be used to invest in the US. As one Republican Congressman Phil English put it in exactly the language that is now being used here, 

“The billions of dollars that will be brought back will be used by American employers to hire new workers, invest in top-of-the-line equipment, and build new plants right here at home, instead of in the countries where their earnings are currently stranded.”

And the Republicans even boasted that the Act specifically banned the use of the tax handouts for share buybacks.

In 2011, the US Senate permanent subcommittee on investigations carried out an inquiry into what happened to all that money in Repatriating Offshore Funds: 2004 Tax Windfall For Select Multinationals. That’s the report that has quote after quote after quote about how the money would be used for investment and jobs. What did the committee find? The tax cuts led to job cuts, increased CEO remuneration and — despite the purported ban — share buybacks.

One prominent supporter of the tax holiday, Hewlett-Packard, repatriated $14.5 billion but ended up cutting more than 14,000 jobs. 

At least US CEOs now know they can’t brazenly lie about what they’ll do with tax windfalls, because their own behaviour reveals the truth. It’s a pity Australian CEOs aren’t so honest with us.