Tag Archives | pandering politicos

Multinationals seek tax heavens, er, havens . . . oh, what’s the diff?

More and more U.S.-based corporations are growing wings and flying away from their U.S. tax obligations.

Bloomberg puts it as simply as possible: “U.S. companies looking for lower tax bills are heading for the exits, and Congress is doing nothing to stop them.”

The immediate impetus for the story was Pfizer’s proposed purchase of AstraZeneca, which would result in Pfizer reincorporating in Britain while tapping literally billions of dollars it has been holding outside the U.S., as The New York Times reported.

What’s the solution? Congress could grow a set and change the tax laws so that there is a crackdown on companies that use tax havens to keep profits outside of the U.S. system, as Steven Rattner suggests. Rattner also suggests in essence giving up on taxing corporations and instead increasing taxes on profits at the shareholder level, which would effectively increase the taxes paid by the wealthiest Americans.

I don’t know what the solution is, but when you consider that the effective federal tax rate paid by corporations has dropped from more than 40% in the 1950s to about 15% today, it seems clear that something has to change.

For privileged corporations, paying state taxes is increasingly becoming a thing of the past

States regularly offer tax incentives (or, depending on your point of view, corporate welfare) to major corporations in exchange for promises of expansion, corporate relocation, retention of old jobs, creation of new jobs, and anything else with the word ‘jobs’ in the sentence. If you think about it, it’s an almost mindless rush to the bottom: the more tax incentives that get offered, the lower overall corporate taxes paid to all states and the more states will have to look to other sources (that’s you, Mr. & Ms. Non-Corporation) to make up the difference.

Now at least one state politician is trying to reverse this trend, or at least slow it down. The New York Times reports that Missouri governor Jay Nixon has called for a halt to the tax incentive border war between that state and Kansas.

“That is bad for taxpayers,” Mr. Nixon said of the moving of jobs. “It’s bad for our state budget, and it’s not good for our economy.”

Meanwhile, the Washington State legislature has just passed what Seattle Times columnist Danny Westneat reports is the largest state tax subsidy in history—more than $8 billion-with-a-B in corporate tax breaks — almost entirely for Boeing-with-a-B — over 15 years.

Who would pay for lower estate taxes on the super-rich? Working families.

On the eve of the election, it seems like a good time to highlight one of the tax provisions that Mitt Romney says he would wholeheartedly support–one that would increase taxes on millions of working people.

Right now the estate tax applies only to estates worth more than $5 million ($10 million for married couples). Republicans in Congress want to keep these high levels instead of the still-generous $3.5 million/$7 million for couples that were in effect in 2009.

How many people would actually benefit from these highest-wealth tax breaks? The estates of about 7,000 individuals or families nationwide.

How would the Republicans pay for this break, which saves the wealthiest about $1.1 million apiece?

They would slash the child tax credit and the Earned Income Credit, which combined help more than 13 million working families. That’s right–they would increase taxes on 13 million families to pay for a tax break on 7,000 estates.

These numbers are stunning. In the swing state of Virginia, for example, 220 estates would get the seven-figure tax break. Yet 275,000 families, including a half-million children, would pay for it.

The New York Times has all the gory details here.



When a candidate says what he really thinks . . . that’s news

“…who believe that they are entitled to health care, to food, to housing, to you-name-it.”

Wow. Won’t spend a lot of time on this, because it’s only been the #1 story of the week. Absolutely chilling to hear the world view of a man who believes that 47% of us are freeloaders. If you make too little to have an income tax bill–but you’re still paying Social Security, Medicare and other taxes–Mitt’s not going to lose any sleep over you.

As The New York Times said today,
“Mr. Romney has been trying to incite the anger of a small slice of the richest Americans who need no government assistance but get it anyway, against the working poor, older Americans, the disabled workers and veterans, and even a significant chunk of middle-class Americans.”

How amazing is it hearing what Romney says when he thinks only his friends are listening? Let’s just say I never thought I’d be linking in this blog to a political commentary by conservative favorite David Brooks.


What to expect from the Ryan Administration

Mitt Romney will only release one year of past tax returns and won’t give any specific budget proposals. But sooner or later, he had to pick a vice-presidential candidate.

So we can now look to Paul Ryan’s proposals as chairman of the House Budget Committee (Romney previously called a proposed Ryan budget “excellent work”) for a preview of how your taxes could change under a Romney-Ryan Administration. Here’s some of what Ryan has proposed:

–Giving the top 1 percent of income earners a tax break averaging more than $150,000, while on average raising the taxes of the bottom 20%, as The Washington Post reported.

–Ending Medicare by giving beneficiaries a fixed amount to go into the marketplace and try to purchase private health insurance. Over time, government spending on health care would drop by 50% and most elderly would pay more for health care (if they can get insurance) than would otherwise be the case. You don’t have to believe me about this–just check out the report from the well-regarded and nonpartisan Congressional Budget Office.

–Privatizing Social Security, with a plan so radical that even privatization fan George W. Bush spurned it, according to New York magazine.

–Cutting Pell Grants, job training benefits, and food stamps with a slash-and-burn campaign so severe that the U.S. Conference of Catholic Bishops publicly criticized him.

I know–only one of the bullets above deal directly with taxes, while the other three deal with government spending on social programs. Remember: Whenever politicians talk about cutting spending on social programs, they are usually also talking about indirectly raising costs and reducing opportunities for millions of Americans.