Tag Archives | corporate weasels

Are you going to believe what we say, or what your lyin’ eyes see?

By on June 20, 2011 in Politics, Tax Policy

Would you like an income tax rate of 5.25%? You have a chance–if you’re a major multinational corporation.

In 2005 the Bush Administration gave multinational corporations a big tax windfall, telling them that they could bring home profits that they had ‘parked’ abroad and pay only 5.25% in income taxes, instead of the usual top corporate rate of 35%. More than $300 billion flowed back, saving corporations around $100 billion.

The tax holiday was supposed to be an incentive for the corporations to increase their hiring in the U.S., but almost all the money wound up being used for dividends and stock buybacks, as the National Bureau of Economic Research reported. Some companies even used the money to increase their spending on closing domestic plants and laying off workers.

Now, as today’s New York Times reports , the corporations are pushing in Congress for another similar tax holiday, saying that it will–guess what?–create thousands of new jobs. The incredibly cynically-named WIN America (Working to Invest Now in America) Coalition wants a break on as much as $1 trillion–that’s Trillion with a T, as in One Thousand Billions–in profits.

This may be the ultimate corporate double-dip.

They were against Medicare until they were for it

By on May 15, 2011 in Politics, Tax Advice, Tax Policy

Republicans kept banging on the idea of privatizing Medicare until, as The New York Times notes, it became clear just how big a non-starter that idea is with the American public. The shrink-the-government yahoos are apparently unyielding on their ideology until that ideology threatens their hold on the government.

Not only would privatizing Medicare eliminate the guarantee of health coverage that older Americans have come to expect, it wouldn’t even save money. In fact, it would probably DOUBLE the amounts spent on health care for seniors, as a Congressional Budget Office study revealed.

Where would all that money go? Well, if you privatize Medicare, you create a huge new market for…insurance companies. So the cutting government spending becomes a stalking horse for a more inefficient health care system, greater profits for insurance companies, and higher costs for average Americans.

GE brings tax avoidance to light

By on April 5, 2011 in Creative, Internal Revenue Service, Politics, Tax Policy

You’re going to be hearing a lot this year from Tea Partiers and others on their bandwagon about how U.S. corporations operate at a disadvantage because of the 35% top tax rate on corporate earnings.

Don’t believe it.

While the 35% marginal rate is indeed one of the highest in the developed world, an array of deductions, shelters and credits slashes the effective rate paid by most American companies. Corporate taxes now account for less than 7% of all federal revenues, down from 30% in the 1950s. U.S.-based multinational corporations routinely “park” either profits or valuable profit-making assets like patents in low-tax countries overseas, as 60 Minutes outlined in this segment. And General Electric is in the news for paying either little or no tax on $5 billion in U.S. profits, as The New York Times reported.

I often tell my small business clients that they are entitled to all of the tax breaks that exist for the encouragement and promotion of business activity, except of course for those tax breaks that were written into the code specifically for General Motors. Gonna have to start using GE as my example.

GE logo GE brings tax avoidance to light