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Stop the Offshore Piracy
Ships laden with tens of millions of dollars of American treasure pull into beautiful ports in places like the Cayman Islands and the Bahamas every day, offloading profits made on sales to U.S. consumers. These voyages -- all technically legal -- cost taxpayers $100 billion a year.
Now the corporate captains of these pirate ships have sent Congress an ominous ransom note that says: "Allow us to return these profits to American territory at a deeply discounted tax rate of 5.25 percent, or you'll never see your cash again."
The regular corporate tax rate is 35 percent.
Of course, modern pirates don't need cargo ships. They transmit booty instantaneously via electronic bits to satellite dishes that link the world's 50 tax havens. There, shell-company subsidiaries, often little more than a brass plate on the wall and a post office box, handle the transaction. Ugland House, a non-descript five-story building on Grand Cayman Island, houses nearly 19,000 subsidiaries of the world's largest businesses.
American corporations have stashed more than $1.4 trillion offshore. Much of this loot is reaped from accounting tricks.
Corporate pirates have formed an armada to lobby Congress for the same tax break they got in 2004. That was when they promised to create jobs in exchange for a one-time tax break on repatriated earnings they would return to the United States from abroad.
The sea air must have clouded their memories, for the coalition that calls itself WIN America, is calling for a second "one-time" tax cut, only this time they've made no attempt to promise U.S. jobs or investment. Instead, they're seeking public sympathy for having their profits unfairly trapped offshore. The profits are indeed trapped -- by the greed of corporate leaders eager to deliver every last dime of profits to shareholders. The U.S. tax code isn't to blame.
According to a new Institute for Policy Studies report, "America Loses: Corporations that Take 'Tax Holidays' Slash Jobs," which I co-authored, 58 U.S. corporations that enjoyed 70 percent of the tax breaks from the 2004 tax holiday eliminated nearly 600,000 jobs in the seven years that followed.
Three of the five WIN America companies that break out their U.S. employment data reported that they destroyed more than 25,000 American jobs between 2004 and 2010. Seven of the 18 WIN America members slashed more than 100,000 jobs from global workforces.
The pirates named their lobbying effort WIN America, as if avoiding taxes by shipping profits offshore was somehow patriotic. WIN America has spent $50 million on lobbyists to coax Congress into supporting a repeat of a well-documented policy failure.
Congress should put an end to the piracy that continues to ship U.S. profits abroad to avoid U.S. federal taxes. There's already a bill in Congress to do just that. The Stop Tax Haven Abuse Act would outlaw the fake businesses. It would block the money earned in America from leaving here in the first place.
Tax-dodging corporate pirates shouldn't force U.S. taxpayers and workers to walk the plank.
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11 Comments so far
Show All"Tax-dodging corporate pirates shouldn't force U.S. taxpayers and workers to walk the plank."
I agree, but fixing this one thing won't reverse the decline.
If environmental conditions continue to go in the way they seem to me to be going, then no single country, no single culture, no one way of life, no one segment of the whole can be saved. It's all or no one now. The worldwide electromechanical concatenations that are the planet's primary economic processes are so interconnected that everything everywhere affects everything else . . . usually negatively.
Humans can come together, set their differences aside, and work as a big team to reorganize the whole planetary life support system, or else . . . Well, we don't know what exactly the "or else" will be yet. But foreseeable possibilities don't look good from my perspective.
The U.S. economy, for example, cannot be "saved" because the pieces it's made of can't be teased out of and separated from the whole earth economy, and fixed. Too interconnected. Speaking of boats, we are, unfortunately, all in the same leaky one and can't just plug up the holes that are only sinking one group or individual.
Again...how can we expect politicians to stop offshoring when they work for the same offshoring corporations?
Direct democracy
This issue is a small piece of a big picture, granted, but it gives a clear picture of the amorality of American business leaders. This is just the sort of issue that can draw millions of voters out from the R column, weakening the entire system of hostage politics upon which such pirates depend.
I think you are dreaming if you think a little thing such as offshore bank accounts will draw voters out from the R column. Most of them don't know about the accounts and fewer care. All they want is to see Republicans controlling all branches of the government.
This comment should not be taken as my feeling that the Democrats are any better about this abomination. Just that the voters are too set in their ways to change affliliations over something they would consider to be abstract.
Please note that these "off shore bank accounts" are being held in US banks like JP Chase and Citibank right here. us tis just that the account has the name of an American company but with an address in Panama. These "off shore" sums are estimated to be 1.2 trillion. All they want to do is transfer these funds to their domestic accounts and only pay 5.6 % and not the 35% that they are suppose to pay. Bankers today are driven around in custom made suits and carry brief cases. Note today's banksters are doing much better than any pirates in history.
Yes, this is just a small part of the problem. But its like saying "well, it only 50 million and not spending it won't help the debt" to ignore it or any of the other "tricks"
The only way to solve the problem is to attack every "trick" they are using. Get the "trick" removed from the tax code.
Off-shoring revenue or profits or assets, whereby sheltering them from taxes or from peering eyes, be it corps or persons, is deeply entrenched in the worldwide 1% mantra and modus operandi. All the 1% of all the countries worldwide do it, for hundreds of years now. This is another "big kahuna" that will not be solved easily and quickly.
The best way to rob a bank is to own one. The banksters have bought the politicians and rewritten the regulations and laws in their own favor. As for outsourcing jobs, as far as I am concerned, every American job outsourced to another country is an act of treason against America. But what do you expect? After all, the wealthy used election fraud and a politicized Supreme Court to install a Vietnam era deserter as commander in chief ... these people have no respect for us or our country and they never will. Remember that Mitt Romney made millions buying up companies, dismantling them and outsourcing the jobs of American workers. He is just another traitor trying to gain the power to steal as much as he can while in the White House.
Who will pass the Stop Tax Haven Abuse Act in Congress? This last iteration of the "We must...." fantasy insidiously suggests that "We" have a say in running the extractive machine in the gears of which we are caught. Viva the Occupation!
Nice. It was only yesterday I made the following comment on the article in CD "Job Destroyers Don't Deserve a Tax Holiday":
>>"Did anyone else get the same image - that of thieves negotiating to bring back the loot into the city from where it was stolen, on the condition that the loot will not be taxed and it will not be returned back to where it was stolen from? And the city is actually considering it because it's so desperate and helpless?"<<
All Corporate taxes, including payroll taxes, are a really stupid idea in the first place.Since they can be passed on to US customers without any competive disadvange to other US firms and the poor and middle class have to spend a larger portion of their income they are regressive taxes. And because they raise the cost of US produced goods and services by 15-20% they make US firms less competative world wide and send jobs overseas. We need to stop taxing corporations and start taxing corporation owners with a 1% federal “property tax” on assets (Except primary Residence) and ¾% federal transfer tax on sale of assets (Except primary Residence). Assets = Stocks, Bonds, Etc. These two taxes combined with 6% flat income tax with a $10,000 (FLP) per person deduction would allow us to eliminate all other federal taxes.