Categorized | General Interest

Corporate Flim Flam of the Day

They can’t help themselves. The CEOs who run big corporations are like heroin addicts — once they get a taste of a scheme to rob more money from taxpayers, they just want more, more and more. And here they go again.

I’ve written a lot about the scam of the corporate tax holiday. A related cousin to this scam is the push to create a territorial tax system which is simply, as the Citizens for Tax Justice explains, a scam:

A “territorial” tax system is a euphemism to describe a tax system that exempts offshore corporate profits from the U.S. corporate tax.

The public hates the idea:

For example, a survey taken in January of 2013 asked respondents, “Do you approve or disapprove of allowing corporations to not pay any U.S. taxes on profits that they earn in foreign countries?” 73 percent of respondents said they “disapprove” and 57 percent said they “strongly disapprove.” The same survey found that 83 percent of respondents approved (including 59 percent who strongly approved) of a proposal to “Increase tax on U.S. corporations’ overseas profits to ensure it is as much as tax on their U.S. profits.”

And the false information dumped on the citizenry by corporations — sure to be increased with the creation of a new front called Let’s Invest for Tomorrow (LIFT) — includes the line that somehow US-based corporations pay higher taxes than multinational corporations based in other countries. Bullshit:

The reality is very different and much more complicated. While the U.S. has a relatively high statutory tax rate for corporations, the U.S. corporate tax has so many loopholes that most major multinational corporations seem to be paying a lower effective tax rate in the U.S. than they pay in the other countries where they have operations. CTJ’s major 2011 report on corporate taxes studied most of the profitable Fortune 500 companies and found (on pages 10-11) that among those with significant offshore profits (making up a tenth or more of their overall profits) two-thirds actually paid a lower effective tax rate in the U.S. than in the other countries where they operated.

The problem, to some extent, is not that the public doesn’t understand the scam. It’s that political leaders are happy to do the bidding of powerful corporate players as long as the campaign contributions keep flowing.

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