There is a great article out right now on The Huffington Post by Chuck Collins making a terrific point:
We're chumps unless we force Congress to stop tax haven abuse.
Instead of cutting state and federal budgets, the United States should crack down on the corporate tax dodgers thumbing their noses at us.
Across the nation, states are making deep cuts that will wreck the quality of life for everyone to close budget gaps that total more than $100 billion.
But there's a more sensible option. Overseas tax havens enable companies to pretend their profits are earned in other countries like the Cayman Islands. Simply making that ruse illegal would bring home an estimated $100 billion a year.
The next time you read a story about some politician bemoaning that "there's no money" and "we have to make cuts," just point to artful tax dodgers in our midst.
They include some of the banks that trashed the economy but gladly took our tax dollars to stay alive after the economic meltdown. Bank of America. Wells Fargo. Citigroup.
Goldman Sachs took a $10 billion taxpayer bailout but then gamed its effective tax rate down to one percent through what its shakedown-artist executives call "changes in geographic earnings mix." Shame on them. Pay up.
See that FedEx delivery van go by on the roads you paid for? Pay up FedEx! Don't pretend you're not making billions in the U.S. Don't lie and tell us you made all those profits on some island with more palm trees than people. We know the demand for coconut delivery isn't that big.
These corporations are heavy users of our taxpayer funded public infrastructure and property rights protection systems. They use our regulated marketplace, call upon our law enforcement system and judiciary to remedy disputes. They're protected by U.S. police forces and firefighters. They enjoy all the privileges and benefits of tax-paying citizens. They just don't pay their fair share for them.
So, ExxonMobil: the next time your gas station erupts in flames, why don't you call the fire department on the Cayman Islands? Or when someone holds up the joint, how about calling the Luxembourg police, since that's where you claim your profits so you don't have to pay the taxes you owe Uncle Sam.
Hey, Pfizer. Without our remarkable taxpayer-funded system of patents and intellectual property rights protections, everyone and their brother would be making Viagra and undercutting your sales of little blue pills. Pay up!
Those of us who pay sales taxes and have income taxes withheld from our paychecks will bear the brunt of state and federal budget cuts in schools, public transportation, and recreational facilities. Our most vulnerable family members and neighbors will suffer thanks to cuts in mental health services, elder care, and Medicaid.
Oh yes, and children. Arizona is cutting health care for 47,000 children. California, New York and Mississippi are cutting K-12 education funding. Hey, kids don't vote. Nor do they have corporate lobbyists. An estimated 900,000 jobs will be cut, including teachers, firefighters, police officers, and medical first responders.
Boeing, you want another contract for a taxpayer-funded military jet? Well, pay up! Pay up General Electric, Mattel, Dow Chemical, Hewlett-Packard, and Cisco. Yes, we know you pay some taxes. But look these children who are losing their health insurance and teaching aides in the eye. Tell them you're paying your fair share.
These global corporations will complain that forcing them to pay their fair share of taxes will "kill jobs." Let's be clear: the patriotic businesses that currently pay their taxes and have to compete against these tax dodgers are the employers we want. It undercuts U.S. jobs for domestic banks, retailers, and manufacturers to have to compete against companies that can game the tax system.
The next time you're waiting longer for a bus or train than you should, or someone you know can't get timely mental health or drug treatment services, remember the tax dodgers. The next time your car hits a pothole or your kid's teacher loses her job, remember the corporations that are using armies of accountants to lower their tax bills.
In a democracy, if we sit back and just grumble, we get what we deserve. We're chumps until we wake up and force our members of Congress to stop tax haven abuse.
I ask here again, why isn't there at least say a 10% minimum corporate tax (or some such fair and wise amount) which any and all should pay so a) they have access to our markets and b) they support our infrastructure and so, in effect, the country itself they're benefiting from?
Isn't that the least they can do? Isn't it the least we can ask of them?
Wouldn't it be downright patriotic to pay, on their part, let alone fair?
And why is no one proposing this?
Link to original post: http://www.huffingtonpost.com/chuck-collins/pay-up-corporate-tax-dodg_b_828925.html (Thanks and a hat tip to longtime friend Dennis for pointing out this article).
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Daily Cartoon: Friday, April 26th
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6 comments:
How do we calculate the profits on a Honda? Some are nearly 100% US made--aluminum and iron at one end, finished engines and other parts out the oter, shipped up the road to the assembly plant 40 minutes away. Some are imported, some a mix. Some american made parts and entire vehicles are sold overseas.
Do we penalise Honda because they have an American division? How about companies that evade our taxes by only selling here, not making anything in the US?
If we raise taxes on Honda, do you think only the shareholders will pay?
If we penalize US manufacturing, we will get less of it-is that really what you want?
I thought I'd hear from you on this, Sevesteen.
In the "good ol' days" of the 50's, corporations paid tax and it was assumed they paid tax. Corporate Amerika and their task-masters, the Republicans keep giving them more and more tax breaks, in spite of our debt.
Is it your stance that corporations owe the country nothing for, again, access to our markets and for the infrastructure needed to make the country work? That seems to be your and their stance. How does a country work if you put all of the weight of the society to work on the middle- and lower-classes as we've done now, with the corporations and wealthy paying little or, as in the case of too many corporations, nothing?
In the good old days, it was much more difficult to shift production from country to country, or to calculate the economic benefits--we didn't have spreadsheets, cheap instant worldwide communication, PLC's (industrial controllers that allow flexible assembly lines) widespread containerized freight, etc.
My stance is that taxes are eventually, inevitably paid by consumers. The only way that taxes won't get passed on to consumers is if only some businesses in a sector are taxed, while competing businesses are not. Americans benefit by having businesses locate here, in ways other than just a source of taxes.
So shifting the tax burden to business may lower our tax bill, but it will raise the prices we pay by at least an equal amount--Plus it is likely to encourage businesses to locate where their taxes are lower, taking those jobs with them. The net result is less buying power for individuals. People are less likely to move to save a small fraction of their tax bill, especially if their job doesn't move with them.
If corporations were completely untaxed, they would still contribute by paying their employees, who will then pay taxes.
Giving up on the notion that the rich must be punished just for being rich would result in a better standard of living for everyone.
You have ignored the very real problem of determining which profits of a multinational were from which country--it isn't trivial, and the amounts involved ensure that the companies themselves do as much as possible to keep it difficult.
First things first--the article I show here is about having companies stop evading already existing taxes and them using/abusing tax havens. That isn't "shifting the tax burden to companies" at all. It's having them pay what's already due.
It isn't "penalizing" a company to have them pay a tax.
I'm familiar with your stance--it's a common and familiar one.
I go back to what I said earlier, a) they have access to our markets, b) them paying taxes pays for our infrastructure and finally, c) why wouldn't paying this tax be considered doing their patriotic duty, if nothing else?
Your view is that taxing the wealthy more is "punishing them for being rich". It's nonsense but that's fine--it's your view. IT sounds, I'll say again, as though you are wealthy and maybe were born to wealth. I can't understand why you--or anyone--from the middle- or lower-classes would defend their getting off easy but that's what Fox "News" does to people, sometimes.
The fact is, a higher tax rate for people with more money--nothing that huge--is fair and is considered fair by most of the world. They don't "miss" the money because they have, for the people I'm speaking of, millions or billions of dollars. Warren Buffet gets it and has said it makes sense. I don't know why you fight it. I don't get it. You seem, otherwise, both mostly intelligent/educated and like a pleasant enough guy. I don't understand why this new class of people in this country fights for the wealthy to keep more of their wealth, especially when we have the huge debts we have. The Geo. W Bush tax cut giveaway to the wealthiest Americans is the best example of a tragic ripoff of the rest of America I can think of.
Tax law is amazingly complicated, getting down to details that the federal government should never be involved in. A company that does not take advantage of existing laws will not be able to compete against one that does. The complexity makes it nearly impossible to follow, and often results in the opposite of what was intended.
I used to work at a CRT (picture tube) factory. Some imported CRTs and parts had extra 'anti dumping' taxes, depending on the country of origin, and the path into the US. A tube directly imported to be installed into a set in the US had an extra 25% duty, if I remember right--but a TV assembled in Mexico with the same parts may come in under the standard duty, or may come in duty free, depending on which area of Mexico it was assembled in, and how much US content was included.
Should a company just swallow that extra 25%? Do you think the people buying this TV won't be charged that 25%?
Where is the line between rationally following the tax law, and taking unfair advantage of loopholes?
We need a much, much simpler tax structure, especially in corporate taxes. Corporations will make decisions based on fairly small amounts--what would the result be in job creation of the US became a tax haven? More jobs, more employed people paying taxes, more successful US based corporations, and more tax revenue.
I agree on your statement that " We need a much, much simpler tax structure..." A complicated, multi-leveled and layered tax structure like the one we have is the result of both time and, worse, letting corporations "buy", in effect, tax deductions because they give their representatives campaign contributions. It goes back--as most all money does in our government--to the fact that we need strict, tough, enforceable and clear campaign finance reform.
Along with a simpler, more intelligent but still tiered tax structure.
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