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“A Dangerous Direction”: Corporate Tax Break Scheme Is Gaining A Momentum We Must Stop

There is no real argument over whether the nation needs to do more to improve its infrastructure – its transportation, water, power and information networks. But there is an argument over how best to pay for it all – and that argument is increasingly turning in a dangerous direction.

Financially stressed working-class households who are at best treading water, if not actually sinking, in today’s economy aren’t eager to dig deeper into their own pockets to foot the bill. That’s even more true of the plutocrat class, which has an army of lobbyists at the ready to shut down any suggestion that those who arguably would benefit the most from such things as better roads and public transportation should shoulder the larger share of the load.

Politicians of both parties in Washington are therefore increasingly relying on one of the schemes in the voodoo economics toolbox: give corporations hoarding money overseas to avoid taxation a form of tax holiday in exchange for increased corporate funding for infrastructure.

The Bond Buyer financial news site reports that Sen. Rand Paul (R-TX) and Sen. Barbara Boxer (D-CA) are close to agreeing on a plan that would give multinationals a deep tax reduction on money they currently have stashed overseas if they bring the money back into the United States, also known as repatriation. Money collected would be deposited into the Highway Trust Fund, which is dedicated to paying for federal transportation projects.

Paul’s promoting of this idea is not new; he had a bill last year that would have permanently cut the tax rate on profits corporations hold overseas, with the funds going into an emergency fund for what it considered high-priority highway projects. But his collaboration with Boxer is likely to give the idea more political momentum.

Meanwhile, the chairman of the House Transportation and Infrastructure Committee, Rep. Bill Shuster (R-PA), told the U.S. Conference of Mayors last week that raising the gasoline tax to pay for transportation improvements – the most logical near-term solution since that tax hasn’t been raised in almost 22 years – is off the table in his committee. Instead, “the number one source that’s being talked about is this repatriation of funds,” he said, according to The Hill newspaper.

Rep. John Delaney (D-MD) is a leading proponent of a repatriation-for-transportation-funding scheme. In December he filed a bill expected to be reintroduced this year that would allow multinational corporations to bring back overseas profits at a tax rate of 8.75 percent instead of the current statutory tax rate of 35 percent. The revenue collected would be placed in the Highway Trust Fund and in a $50 billion America Infrastructure Fund, which would be used to leverage up to $750 billion worth of state, local and private funding for infrastructure projects around the country.

With the White House giving its tacit blessing to such schemes while refusing to support proposals to raise funding in other ways, tapping profits now held overseas at a deeply discounted tax rate is becoming the default position for how to begin covering a more-than-$1 trillion infrastructure investment deficit.

But is rewarding tax avoidance really the way to fund our public infrastructure needs?

The biggest problem with the Delaney proposal, and the similar proposal from Paul, is that “it would allow companies such as Apple and Microsoft, which have parked hundreds of billions of dollars of US profits in offshore tax havens, to pay a US tax rate of no more than of 8.75 percent, instead of the more than 30 percent tax they should pay on these profits,” says an analysis by Citizens for Tax Justice.

These profits – more than $2 trillion – are usually laundered through foreign subsidiaries in low-tax or no-tax countries in ways designed to avoid US taxes. That can be done as simply as having that online purchase you think you are making through an American-based company actually handled by a Swiss or Irish subsidiary, or by transferring a patent to an overseas subsidiary so that revenues on licensing that patent flow through the subsidiary. Sometimes, the money isn’t even actually overseas, but is deposited in US banks and is being used for domestic purposes. In any event, regardless of where the money ends up being deposited, it is not “trapped overseas,” as corporate lobbyists and their supporters in Congress often say; it’s just that they don’t want to pay a higher tax on that money.

The last time corporations got a repatriation tax holiday in exchange for the promise to use the profits in job-creating investments, in 2004, corporations instead ended up using the money brought back into the country to boost shareholder dividends and buy back stock (which drives up stock prices and, often, the compensation of CEOs). There is little reason to believe that the same thing wouldn’t happen again in 2015.

Setting a bargain-basement tax rate for profits booked through foreign subsidiaries serves as nothing more than an incentive for corporations to escalate the schemes – or a wedge to convince lawmakers that if an ultra-low corporate tax rate is good for profits repatriated from overseas, perhaps all corporate profits should be taxed at that rate.

In any event, it is the rest of us who end up being the losers. When multinational corporations don’t pay their fair share in taxes, the rest of us have to make up the difference – or suffer the inability to pay for the things that we need, like good roads and public transportation. That includes businesses who don’t have the capacity to set up the fancy tax dodges that their competitors use.

What we need is honest tax reform that makes corporations and the wealthy pay their fair share, closing the door for good on the loopholes and schemes they use to avoid paying taxes. We also need an honest and equitable way to pay for the infrastructure improvements we need. Both are possible, but not without considerable heat from an aroused public. Congress will have to decide this year how it will pay for a multiyear transportation bill. We can’t let the default option be coins from the table of corporate tax avoidance.

 

By: Isaiah J. Poole, Campaign For America’s Future, January 26, 2015

January 28, 2015 Posted by | Corporate Welfare, Multinational Corporations, Tax Loopholes | , , , , , , , , | Leave a comment

“The Bottom Rungs Of The Economic Ladder”: Boehner Undermines His Own Minimum-Wage Argument

When policymakers debate increasing the minimum wage, there’s nothing wrong with them drawing on their personal experiences when making a decision. Some members of Congress, however, really aren’t good at it.

A couple of years ago, for example, Rep. Marsha Blackburn (R-Tenn.) argued against raising the minimum wage above $7.25 an hour because, when she was a teenager, she made $2.15 an hour and she “appreciated that opportunity.”

What Blackburn didn’t realize is that inflation exists – when she made $2.15 an hour as a teen, in inflation-adjusted terms, that was over $12 an hour in today’s money. The Tennessee Republican was trying to argue against a minimum-wage hike, but she ended up doing the opposite.

A related problem popped up over the weekend, when House Speaker John Boehner (R-Ohio) appeared on “60 Minutes” and CBS’s Scott Pelley asked if Congress might increase the “federal minimum wage.” The Republican leader replied:

“It’s a bad idea. I’ve had every kinda rotten job you can imagine growin’ up and gettin’ myself through school. And I wouldn’t have had a chance at half those jobs if the federal government had kept imposing [a] higher minimum wage. You take the bottom rungs off the economic ladder.”

Again, there’s nothing wrong with Boehner, like Blackburn, drawing upon his personal experiences. The trouble is that Boehner, like Blackburn, is flubbing the details.

Sam Stein set the record straight:

[W]hen Boehner was first taking on those “rotten jobs,” the minimum wage was actually at its historic high. And when the wage later dipped relative to inflation, Congress passed a series of hikes that raised it some more.

According to Department of Labor statistics, the minimum wage stood at $1.60 an hour in 1968 – the highest it has ever been when adjusted for inflation…. At first, Boehner went into sales – selling plastics, specifically – after his brief stint with the Navy ended. In 1971, he enrolled in Xavier University. According to a recent Politico profile, Boehner took a number of odd jobs while attending school there, among them “a series of humbling janitorial and construction jobs.” He would graduate in 1977.

On “60 Minutes,” Boehner expressed relief that the government didn’t keep “imposing” a higher minimum wage at the time, but in reality, the government actually did keep “imposing” a higher minimum wage, raising in 1974, 1975, and again in 1976 – just as Boehner was working through college.

And adjusted for inflation, those minimum wages had greater purchasing power than the minimum wage now. If Boehner looks back at that era fondly, he has no reason to create tougher conditions for low-wage workers now.

Keep the political context in mind: the debate about the minimum wage has been ongoing for quite a while, it was a major issue in last year’s elections, and the Speaker no doubt expects questions about the policy during interviews like these. But as of the weekend, his go-to talking point is demonstrably wrong.

 

By: Steve Benen, The Maddow Blog, January 27, 2015

January 28, 2015 Posted by | Congress, John Boehner, Minimum Wage | , , , , , | Leave a comment

“The Company You Keep”: Bobby Jindal Wants To Fistfight Your God

“Our God wins!” Who do you think made this statement on Saturday in the hopes of rallying a group of religious fundamentalists? A. The leader of ISIS; B. A Yemeni militant commander; C. A radical Islamic cleric; or D. Louisiana Republican Governor Bobby Jindal.

The correct answer is Jindal. He made the “our God wins” statement as the keynote speaker at an event sponsored by the conservative Christian organization, the American Family Association. (AFA.) Now, Jindal’s “our God wins” is a more impressive boast than you might first realize. Jindal, who is now a Christian, was raised a Hindu, a faith that features literally millions of Gods. So for Jindal’s new God to win, he is surely fully aware that it has to beat throngs of Hindu Gods. That would likely entail a massive, NCAA March madness-type bracket system pitting God versus God for years of battles.

In any event, the God Jindal and the AFA members worship has apparently been working out and is ready to kick some deity ass. And the way the crowd cheered Jindal’s notion that “my God can beat up your God” tells you a great deal about the AFA.

Now for those unfamiliar with the AFA, here’s a primer. They are a hate group. It’s really that simple. And that’s not just my opinion, but the view of the Southern Poverty Law Center, which named the AFA a hate group for its vicious anti-gay statements over the years.

As the SPLC’s Mark Potok has noted, in recent years the AFA also added Muslim bashing to its repertoire of hate. Apparently if you ask the leaders of the AFA, “What would Jesus do?” they would respond: demonize gays and Muslims.

The AFA, however, can’t simply be ignored. It’s indisputably a powerful conservative Christian organization. Based in Tupelo, Mississippi, it boasts 500,000-plus members and employs more than 100 people. It also operates its own popular radio network featuring Bryan Fischer, a man who is hateful as he is compelling to listen to on the radio.

Republican candidates for president have long visited Fischer’s show and teamed up with AFA in the hopes of attracting its followers. And not just the likes of Mike Huckabee, Rick Santorum, and Rick Perry, but also more moderate candidates like former Minnesota Governor Tim Pawlenty who went on Fischer’s radio program during his failed 2012 bid for president.

Obviously political candidates can seek the support of any group they want. But as we saw recently with Rep. Steve Scalise (R-La), appearing before hate groups such as the white supremacist group he spoke before in 2002, could, and should, come back to haunt you.

So here’s a sample of the AFA’s views so you can understand what they are all about.

Gays are to blame for The Holocaust: “Homosexuality gave us Adolph Hitler, and homosexuals in the military gave us the Brown Shirts, the Nazi war machine and six million dead Jews.” –May 27, 2010, Fischer’s blog.

God will use ISIS to punish America for gay rights: “God will use the pagan armies of Allah to discipline the United States for our debauchery.” August 22, 2014, Fischer’s radio show.

Freedom of religion is for Christians only: “I have contended for years that the First Amendment, as given by the Founders, provides religious liberty protections for Christianity only. “ August 1, 2014 article by Fischer.

The Charlie Hebdo attack was God’s punishment for the magazine’s blasphemy: “They made a career out of taking the name of God, the God of the Bible, the father of the Lord Jesus” which was in violation of the commandment “you shall not take the name of the Lord your God in vain.” January 9, 2015, Fischer radio show.

Bar gays from serving in public office: “I believe being an active homosexual should disqualify you from public office because it’s a form of sexual perversion.” January 8, 2015, Fischer radio show.

Immigrants to the United States must convert to Christianity: Our immigration policy should be, “convert to Christianity, fully assimilate (become an authentic American, not a hyphenated American), and support yourself. If you commit to those things, you are welcome here.”  April 9, 2011, Fischer Blog.

And the list goes on and on.  Yet Jindal and other Republicans have no problem being the keynote speakers at their event and appearing on the AFA radio program.

Why would a guy like Jindal, an Ivy Leaguer and a seemingly mainstream governor, team up with the likes of AFA? Well, many would say it’s out of political expediency. After all, in the 2012 presidential race, white Evangelical voters accounted for 50 percent of the voters in the early GOP primary contests.

Others would say Jindal is simply desperate. The RCP average of polls shows Jindal in eleventh place out of 12 GOP candidates with only 2.8 percent of support. Jindal is literally running behind the poll’s margin of error.

But then again, maybe we are wrong. Maybe people like Jindal, Perry, Huckabee, and the like align with the AFA because they actually agree with their views. Perhaps they too believe that gays are to blame for the Holocaust, that Muslims and Jews don’t deserve First Amendment rights, and that all immigrants need to convert to Christianity?

Sure, these views sound outlandish, but shouldn’t we assume that the politicians agree with the hateful positions of the groups they team up with unless we hear the candidate publicly denounce each one?

If Republican candidates want the support of groups like the AFA, both the general public and the AFA’s followers deserve to know which issues they agree upon and which ones they don’t.  Isn’t it time that the media started asking those questions?

 

By: Dean Obeidallah, The Daily Beast, January 27, 2015

January 28, 2015 Posted by | Bobby Jindal, Christian Right, GOP Presidential Candidates | , , , , , , , , | Leave a comment

“The Plutocrat Politburo”: The Koch Brothers Don’t Care If You Care About Their Plans To Buy 2016 Election

The Koch brothers are done being shy. That’s the conclusion one would have to draw from the fact that they just announced that they hope to spend $889 million on the 2016 election, an unprecedented amount of outside money. It won’t all be theirs — they’re assembling a kind of Plutocrat Politburo, a group of billionaires and zillionaires who will contribute to the cause — but with a combined worth of over $80 billion, they’ll surely be the ones opening their ample wallets the widest and determining the strategy and the agenda.

But unlike some previous reporting on Charles and David’s political efforts, this revelation — which comes from a gathering in beautiful Rancho Mirage of Freedom Partners, the organization through which the Kochs and their allies will distribute all these millions — didn’t require any secret meetings with anonymous sources to unearth. They just told everyone. Here’s the Post’s story on it, here’s the New York Times’ story on it, and here’s Politico’s story on it, all complete with ample details and on-the-record quotes. Reporters may not have been invited into the private meetings at the gathering, but they were allowed to hang around and talk to the participants. And no fewer than four potential GOP presidential candidates (Scott Walker, Rand Paul, Marco Rubio, and Ted Cruz) showed up as well, obviously unconcerned about any charge that they’re kowtowing to the uber-rich.

So the Kochs appear to have concluded that the efforts by Democrats (especially Harry Reid) to turn the Koch name into a symbol of everything that’s wrong in American politics have failed. No longer must they cower in their mansions and take pains to conceal their political spending, fearful of the piercing barbs aimed by liberal politicians and commentators, when all they want is for Americans to fully appreciate the majesty of laissez-faire economics. Free at last, free at last, thank Citizens United, they’re free at last.

If you were expecting journalists to express much consternation at the idea that a group of the super-wealthy are openly announcing their intention to buy the next election, you’ll be disappointed. Instead, the news is being reported more like that of a record-breaking contract for a professional athlete: wonder at the sums involved, but precious little moral outrage. That’s mostly because political reporters tend to believe that election campaigns are already nothing but a parade of deception and manipulation, an enterprise that’s inherently corrupt. So what’s a little more corruption?

There’s no doubt that the behind-the-scenes machinations are fascinating to anyone interested in politics. By putting themselves on par with or even above the parties, the Kochs will make the conflict within the Republican Party even more complex, and potentially vicious, than it already was. Ken Vogel of Politico described the move as “a show of dominance to rival factions on the right, including the Republican National Committee.” What happens when the insurgents are even better funded than what we’ve taken to calling the establishment? It will certainly be interesting to find out.

In any case, the Kochs are probably right that they have little to lose by being public about their plans. Yes, they’ll have to absorb some stern editorials, and maybe even some ads from the DNC criticizing Republican politicians for associating with them. But weighed against what they have to gain by putting nearly a billion dollars into the next presidential campaign — more than the two parties spent, combined, in 2012 — that’s a price so small it’s barely worth worrying about.

In his 2003 novel Jennifer Government, Max Barry imagines a future in which the penetration of capitalism and marketing has become so total that people take the names of their corporate employers as their own last names; characters are called things like John Nike, Nathaniel ExxonMobil, and Calvin McDonalds.

We may not have gotten quite that far yet, but the next Republican president — whether that person is elected in 2016 or after — will have been sponsored, supported, elevated, and outfitted by the Koch brothers and their friends. Should a Republican candidate they don’t like show promise in the primaries, he will surely be crushed by the awesome machine they’re building. The winner may not take their name (Scott Walker-Koch, perhaps?), but he or she will be in their debt to a degree we have not previously contemplated. And the consensus will be that that’s just how things work now.

 

By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line, The Washington Post, January 27, 2015

January 28, 2015 Posted by | Democracy, Election 2016, Koch Brothers | , , , , , , , , , | Leave a comment

“Even If It Worked, I Would Oppose It”: Republicans Too Often Prioritize Partisan And Ideological Goals Over Practical Ones

As hard as it may be to perceive right-wing neurosurgeon Ben Carson as a credible presidential candidate, he received a very warm welcome at Steve King’s “Iowa Freedom Summit” over the weekend, and Carson arguably delivered one of the more polished presentations of the gathering.

But on the substance of Carson’s remarks, one thing jumped out at me.

On the Affordable Care Act – which Carson has on several occasions compared to slavery – the famous former surgeon said he opposed any government intrusion in health care. “Even if it worked, I would oppose it,” Carson said of Obamacare. “It doesn’t.”

“I don’t believe in taking the most important thing a person has, which is their health and their health care, and putting it in the hands of the government,” he later added….

For a brief argument in a speech, there’s quite a bit to this. We know, for example, that Carson’s mistaken when he says the Affordable Care Act isn’t working; the evidence to the contrary is simply overwhelming. We also know that when it comes to his preferred model, Carson used to believe largely the opposite of what he’s arguing now.

What’s more, when Carson argues that government shouldn’t have a hand in matters related to health care, it would seem to suggest the Republican candidate is against the VA health care system for active-duty and retired military personnel, Medicare, and Medicaid. That’s not too surprising – a guy who draws a parallel between modern American life and Nazis isn’t going to be a moderate – but it’s a pretty extreme position for even today’s GOP.

But the true gem is, in reference to the ACA, “Even if it worked, I would oppose it.”

Regular readers know that I’ve referenced the Republicans’ “post-policy” problem on several occasions, and Carson’s eight-word line seems to summarize the larger issue nicely. While Democrats focus heavily on policy outcomes and the efficacy of policy proposals – as one might expect from a governing party – Republicans too often prioritize partisan and ideological goals over practical ones.

Whether or not tax cuts work, for example, isn’t especially important. Whether the evidence supports climate change doesn’t matter, either. Pick the issue – national security, education, immigration, et al – and for much of today’s GOP, empiricism and efficacy just isn’t that important. What matters instead is an ideological drive to shrink government, regardless of policy outcomes.

I rather doubt Carson intended his comments to be so revealing, but the fact that he’d oppose a Democratic health care reform package built on a Republican model, regardless of whether or not it works, says a great deal.

What’s the basis for a serious policy debate when one side of the argument doesn’t care if policies are effective or not?

 

By: Steve Benen, The Maddow Blog, January 26, 2015

January 28, 2015 Posted by | Affordable Care Act, Ben Carson, GOP Presidential Candidates | , , , , , , , , , | Leave a comment

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