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Senate Democrats urge Obama to stop firms from moving tax domiciles overseas



Senate Majority Whip Dick Durbin speaks to reporters on Capitol Hill in Washington December 16, 2011.
Reuters 2 hr ago By David Lawder of Reuters

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WASHINGTON, Aug 5 (Reuters) - Three prominent Democratic senators on Tuesday urged President Barack Obama to use his executive authority to reduce or eliminate tax breaks for companies that shift their headquarters overseas to cut their U.S. tax bills.

Senator Richard Durbin, the second-ranking Senate Democrat, along with senators Jack Reed and Elizabeth Warren, said immediate action was needed to stop so-called corporate inversions, in which U.S. firms move their headquarters overseas, often in connection with a foreign merger.

"Although we will continue to work toward a legislative solution to the problem, we urge you to use your authority to reduce or eliminate tax breaks associated with inversions," the senators wrote in a letter to the president.

They said companies that have moved their tax domiciles abroad still benefit from U.S. government investments and tax expenditures, from infrastructure spending, patent protections and tax credits for research.

"Yet these companies claim to be foreign corporations when it's time to pay their tax bill - denying the United States billions of dollars in tax revenue and thereby increasing the tax burden on other U.S. taxpayers," they wrote.

A former U.S. Treasury Department official said last week that Obama could invoke a 1969 tax law to bypass congressional gridlock and restrict foreign tax-domiciled U.S. companies from using inter-company loans and interest deductions to cut their U.S. tax bills.

Stephen Shay, former deputy assistant Treasury secretary for international tax affairs, said quick action on this could thwart some of the corporate inversion deals said to be in the works.

The letter from Durbin, Reed and Warren did not specify a specific law or method for Obama to use.

Republicans have argued that instead of changing laws or regulations governing inversions, Congress should instead pursue comprehensive tax reform to lower U.S. corporate tax rates, a goal that has proved elusive despite widespread criticism of a complex and outdated U.S. tax code.

The Democrats, however, said that even this might not deter inversions, because some jurisdictions would still undercut the 28 percent nominal rate envisioned in Obama's corporate tax reform proposals.

"Companies will still chase lower tax rates in jurisdictions like Ireland where the corporate tax rate is 12.5 percent," they wrote. "This is a race to the bottom the United States simply can't win and should not be lured into entering."


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in the  same vein....

Charles Koch Hijacks Martin Luther King Jr. To Pitch His Vision For Low-Wage America

Posted: 08/06/2014 6:01 pm EDT Updated: 1 hour ago
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WASHINGTON -- Conservative billionaire Charles G. Koch laid out his prescription for reviving the American economy on Wednesday in an op-ed published by USA Today.

In it, Koch argues that the economic recovery is hampered by "destructive regulations affecting whether and how business invests and employees work."

He's referring to regulations designed to protect workers' safety, ensure fair pay, provide for clean air and water, eliminate dangerous consumer products and other benevolent results. For a good sense of what America would be like without these protections, pick up a copy of Upton Sinclair's The Jungle.

But for Koch Industries, the company the Koch brothers inherited from their father and built into a global mega-energy conglomerate, those regulations are costly. Charles Koch complains about how "punitive permitting for large projects creates years of delay, increasing uncertainty and cost. Sometimes projects are canceled and jobs with them."

In May, Koch encountered one such headache, when a storage facility on the banks of the Detroit River was denied a permit to maintain mountains of toxic petroleum coke, which had already sent huge butts of poisonous dust over the citizens of Detroit.

Koch also believes in eliminating what he calls "the artificial cost of hiring." The example he uses is Obamacare's mandate for health insurance, but the subtext is his opposition to minimum wage laws.

The idea that minimum wage laws harm the poor is a lesson taught via video lecture by the Institute for Humane Studies, an "educational" group that Koch chairs. As The Huffington Post reported in July, another Koch-funded group, Youth Entrepreneurs, used that anti-minimum wage video to drive home the point to low-income kids enrolled in a public school entrepreneurship course.

This brings the reader to the third part of Koch's plan -- that American kids need to be more willing to toil in menial jobs. "The willingness to work, an essential for success, often has to be taught," Koch writes. He uses as an example that his father made him take dirty jobs at the family's company when he was younger. Of course, he was still a millionaire's son with a millionaire's son's future.

"Most Americans understand that taking a job and sticking with it, no matter how unpleasant or low-paying, is a vital step toward the American dream," he writes. That Koch chooses a word as innocuous as "unpleasant" to describe a bad job is telling. The realities of low-wage work are often far worse than "unpleasant."

Through Koch's personal lens, anything that stands between workers and the specter of imminent hunger, illness or homelessness "undermines people's will to work." This means supplemental nutrition programs, Medicaid and Medicare, the Earned Income Tax Credit and unemployment insurance. Koch believes these programs and others have "created a culture of dependency and hopelessness. This is most unfair to vulnerable citizens who suffer even as we say they are receiving 'benefits.'"

To drive home his point that people should be happy with their work, no matter how poorly paid or menial, Koch quotes Dr. Martin Luther King Jr. "If a man is called to be a street sweeper," King said, "he should sweep streets so well that all the hosts of heaven and earth will pause to say, 'Here lived a great street sweeper who did his job well.'"

But taking pride in one's work does not prevent a person from seeking fair wages or safe working conditions or equal opportunity. Near the end of his life, King helped organize the Poor People's Campaign to demand, among other things, greater government effort to fight poverty.

King is also unlikely to have approved of the millions the Koch brothers have poured into funding voter ID initiatives nationwide -- initiatives known to disproportionately undermine the ability of minorities to vote.

Read Charles Koch's op-ed in its entirety here.

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