The White House is moving rapidly to crack down on overseas tax havens, used by US companies to evade US taxes, in order to help pay for the government's massive deficit spending for the bailouts of the financials, the economic stimulus package, and a $3.6 tn budget.
President Barack Obama said that his crackdown on tax havens would generate $210 bn in new tax revenues over 10 years and "make it easier" for companies to create jobs at home.
"The way to make American businesses competitive is not to let some citizens and businesses dodge their responsibility, while ordinary Americans pick up the slack. Unfortunately, that's exactly what we're doing," the president said, adding the government is hiring nearly 800 new tax agents "to detect and pursue American tax evaders abroad."
The president has noted: "You've got a building in the Cayman Islands that supposedly houses 12,000 corporations. That's either the biggest building or the biggest tax scam on record."
Start With the Bailed Out Companies
The president could start with the companies that the US taxpayer has either bailed out or is moving to bail out since last year, many of which use the Cayman Islands and similar locales to shelter income from US corporate taxation.
Most all of the big banks, including Citigroup, Bank of America, Goldman Sachs and Wells Fargo, the big insurance companies, including AIG and Hartford Financial, and GM and GMAC, which are now essentially government-owned, regularly use tax havens overseas, in tax haven jurisdictions such as the Cayman Islands, Barbados, Bermuda, and Switzerland (for the full list, see below).
It's an embarrassing development for the Administration and the Congress, which has fought to defend the massive bailouts of the financials and automakers to restless taxpayers, now growing increasingly angry that the bailouts were reckless and have long since derailed.
The use of tax havens by companies that the US taxpayer has bailed out also raises a broad range of policy issues for the Administration and the US Congress, which are moving to stabilize the economy and at the same time have argued that the bailouts will reap a profit for US taxpayers.
The controversy also reignites a heated debate over the nosebleed corporate tax rate US companies must pay, nearly 40%, a rate that is higher than the one companies pay in socialist economies such as Sweden, France, Norway, or even in Canada.
This analysis was done with James Farrell, a top analyst and expert with Fox News, and is based on government reports, including a study by the Government Accountability Office.
Bailed Out Companies' Tax Haven Controversy
The question is, once the government either invests in or takes over these companies, notably GM, will it crack down on the companies' subsidiaries to generate more tax revenue and benefit taxpayers?
Or will the government turn a blind eye to improve profitability and benefit the taxpayers as shareholders?
US companies have a fiduciary obligation to maximize value for their shareholders, Farrell says. However, the government tends not to operate on a profit-maximization requirement, Farrell adds.
Tax Evasion Issues
President Obama's crackdown on corporate tax havens has ignited a debate over the US's high corporate tax rates.
The US has the second highest corporate tax rate of the countries in the 30-nation Organization for Economic Co-operation and Development, (Japan is number one), which some economists note is a crushing burden that companies typically don't pay.
Even Democrat Ways and Means Chairman Charles Rangel has proposed a cut in the federal corporate tax rate from nearly 40% to 30.5%.
Instead, economists, academics and experts who have studied the issue note that companies pass these costs along to shareholders, customers and workers-with workers likely shouldering most of the costs.
Though analysts have noted that the effective rate is 18%, that figure is arrived at after US companies avail themselves of moves to lower their tax bills under the much higher rate.
The combined U.S. federal and average state rate of 40% is almost 9 percentage points higher than the average OECD top corporate rate of 31.4%, the Cato Institute notes. Even socialistic Sweden has a top corporate tax rate of around 28%.
Cato adds that in the last few years, the corporate tax rate was cut in Denmark, France, Ireland, Germany, Poland, and Portugal, as well as many countries outside of Europe.
CorporateTax Avoidance?
Because of the variation in corporate tax rates across countries, US multinationals have an incentive to cut their overall tax burden by maximizing the income they report in countries with low income tax rates and minimizing the income they report in or repatriate to countries like the United States with high income tax rates.
While there may be normal business reasons for these transfers, such as doing business with foreign units, government officials believe "tax avoidance" or "tax evasion" is at play.
The Government Accountability Office says that historically, offshore subsidiaries are used by companies for reducing tax costs and shielding transactions from public view.
Bailed Out Companies' Tax Havens
Bank of America
Total assets: $1.82 tn
2008 results: $2.56 bn in profits
Stock performance: -73.6%*
Bailout Sum: $142.2 bn ($45 bn in TARP money, $97.2 bn US asset guaranty; BofA takes the first hit on $20.8 bn in bad assets)
# of subsidiaries in tax havens: 101
BofA's tax havens
Bahamas (3)
Bermuda (2)
Cayman Islands (59)
Gibraltar (2)
Hong Kong (8)
Jersey (3)
Luxembourg (15)
Mauritius (3)
Singapore (5)
U.S. Virgin Islands (1)
Citigroup
Total assets: $1.95 tn
2008 results: $18.7 bn in losses
Stock performance: -83%*
Bailout Sum: $299.3 bn ($50 bn in TARP money, $249.3 bn US asset guaranty; Citi takes the first hit on $56.7 bn in bad assets)
# of subsidiaries in tax havens: 411
Citi's tax havens
Aruba (1)
Bahamas (16)
Bahrain (1)
Barbados (2)
Bermuda (19)
British Virgin Islands (35)
Cayman Islands (90)
Channel Islands (12)
Costa Rica (19)
Gibraltar (1)
Guernsey (1)
Hong Kong (40)
Isle of Man (1)
Jersey (21)
Luxembourg (91)
Macao (1)
Mauritius (15)
Panama (17)
St. Kitts and Nevis (1)
Singapore (18)
Switzerland (8)
Turks and Caicos Islands (1)
Goldman Sachs Group (now a bank holding company with access to Federal Reserve funding)
Total assets: $885 bn
2008 results: $2.32 bn in profits
Stock performance: -16.7%
Bailout Sum: $10 bn in TARP money
# of subsidiaries in tax havens: 28
Goldman's tax havens
Bermuda (3)
British Virgin Islands (1)
Cayman Islands (15)
Hong Kong (3)
Jersey (1)
Mauritius (5)
JPMorgan Chase & Co.
Total assets: $2.17 tn
2008 results: $5.6 bn in profits
Stock performance: -19.8%*
Bailout Sum: $25 bn in TARP money
# of subsidiaries in tax havens: 48
JP's tax havens
Bahamas (1)
Bermuda (2)
British Virgin Islands (4)
Cayman Islands (7)
Channel Islands (4)
Hong Kong (8)
Luxembourg (8)
Mauritius (8)
Singapore (5)
Switzerland (1)
Merrill Lynch (now part of BofA, which received $20 bn in TARP money to buy the brokerage)
Bailout Sum: $10 bn in TARP money
# of subsidiaries in tax havens: 19
Merrill's tax havens
Bermuda (2)
Cayman Islands (3)
Hong Kong (4)
Luxembourg (1)
Mauritius (3)
Netherlands Antilles (1)
Singapore (2)
Switzerland (3)
Morgan Stanley (now a bank holding company with access to Federal Reserve funding)
Total assets: $659 bn
2008 results: $1.59 bn in profits
Stock performance: -36.5%
Bailout Sum: $10 bn in TARP money
# of subsidiaries in tax havens: 267
Morgan's tax havens
Bermuda (3)
British Virgin Islands (1)
Cayman Islands (158)
Cyprus (2)
Gibraltar (2)
Hong Kong (15)
Jersey (19)
Liberia (5)
Luxembourg (29)
Malta (1)
Marshall Islands (14)
Mauritius (4)
Panama (1)
Singapore (9)
Switzerland (4)
Wachovia Corp. (acquired by Wells Fargo)
Bailout Sum: $10 bn in TARP money
# of subsidiaries in tax havens: 57
Wachovia tax havens
Aruba (1)
Barbados (1)
Bermuda (18)
British Virgin Islands (3)
Cayman Islands (16)
Guernsey (1)
Hong Kong (9)
Mauritius (3)
Singapore (2)
Turks and Caicos Islands (1)
U.S. Virgin Islands (2)
Washington Mutual (acquired by JPMorgan Chase)
Bailout Sum: $10 bn in TARP money
# of subsidiaries in tax havens: 3
WAMU's tax havens
Hong Kong (1)
Mauritius (1)
Virgin Islands (1)
Wells Fargo
Total assets: $1.31 tn
2008 results: $2.56 bn in profits
Stock performance:-41.6%
Bailout sum: $25 bn
# of subsidiaries in tax havens: 18
Wells Fargo's tax havens
Barbados (1)
Cayman Islands (9)
Hong Kong (4)
Mauritius (4)
American Express (now a bank holding company)
Total assets: $126 bn
2008 results: $2.63 bn in profits
Stock performance: -35.2%*
Bailout Sum: $3.39 bn in TARP money
# of subsidiaries in tax havens: 39
Amex's tax havens
Bahrain (2)
British Virgin Islands (2)
Cayman Islands (9)
Guernsey (6)
Hong Kong (4)
Jersey (4)
Luxembourg (3)
Netherlands Antilles (2)
Panama (1)
Singapore (2)
Switzerland (4)
Insurance Companies Use Tax Havens
Insurers are big players in the "tax haven" jurisdictions, Farrell notes, and have plumbed the depths of the tangled pile of barbed wire that is the US tax code in order to maximize profitability for where they write policies and where profit is recorded. The US Treasury Dept. may set aside $22 bn in TARP money to help out insurers.
American International Group
Total assets: $1 tn
2008 results: $99.3 bn loss
Stock performance: -95%
Bailout Sum: $170 bn
# of subsidiaries in tax havens: 15
AIG's tax havens
Bahrain (2)
Bermuda (5)
Hong Kong (3)
Luxembourg (1)
Panama (1)
Switzerland (3)
Hartford Financial Services
Bailout Sum: $3.4 bn estimated
# of subsidiaries in tax havens: 7 (Bermuda)
Prudential Financial
Bailout Sum: $5 bn estimated
# of subsidiaries in tax havens: 26
Prudential's tax havens
Barbados (1)
Bermuda (9)
Cayman Islands (5)
Hong Kong (7)
Luxembourg (1)
Singapore (3)
General Motors
Total assets: $82 bn (against $173 bn in liabilities, net tangible assets negative $86 bn)
2008 results: $30.9 bn loss
Stock performance: -96%
Bailout Sum: up to $50 bn ($19.4 bn to date, up to $30 more in bankruptcy)
# of subsidiaries in tax havens: 10
GM's tax havens
Barbados (1)
Bermuda (2)
Cayman Islands (4)
Singapore (1)
Switzerland (2)
GMAC
(owned by GM and Chrysler)
Total assets: $189 bn
2008 results: $1.9 bn in profits
Stock performance: N/A
Bailout Sum: $12.5 bn in TARP money
# of subsidiaries in tax havens: 2 (Bermuda and Switzerland)
“You’ve got a building in the Cayman Islands that supposedly houses 12,000 corporations. That’s either the biggest building or the biggest tax scam on record.”
This coming from a man who benefitted (putting it mildly) from the "work" of several non-profits assembled in a bit of a building in New Orleans.
Guess he would know about how such scams work.
June 3, 2009 at 8:22 pm
Donman
You seem to throw the word evasion around rather readily. There are tons of legitimate and tax legal ways of using off shore subsidiaries that allow MORE funds from off shore earnings to be repatriated to the USA. In fact, taxpayers are not obliged to pay more tax than required by the law; a fact ignored by populists.
June 3, 2009 at 1:57 pm
Bennet Cecil
The best way to deal with these huge banks is to make them hold one dollar for every dollar they loan. This will stabilize them, make the FDIC irrelevant and mop up all of that funny money the Fed is creating. Now is the time to end fractional reserve banking. This will also force banks to bring those foreign dollars home to bolster deposits.
Finally, the largest ten banks should be split into smaller units. We do not need "too big to fail' again. The largest ten banks should not have more than ten percent of all deposits. Remember we have thousands of banks and we should spread the money around.
The president and congress are trying to tell savers and investors that the US is not friendly to capital. They have not gotten the message yet, but they will in another year or two with higher taxes, poor corporate earnings and a plummeting dollar. Investors should consider selling into the rising US market and moving their savings to a location that rewards investment.
June 3, 2009 at 1:20 am
John S Grant
My Dear Neighbor Americans,
I think you should impeach your wonderful President Obama.
That's some serious idiocy to listen to the wolf criers.
A man with no spine gets sucked into lousy deals. No due diligence.
This weakness in your leader is an invitation for our military to move against you.
It is mighty tempting to consider an invasion and take over of your country since your leadership is so easily hoodwinked. We hear that your current president is courting terrorists and inviting them to celebrate the Fourth of July in America. Do you supply the flags for burning or do they bring their own? This is a joke, right?
We would make you a sweet deal, you get to be our eleventh province and we give you financial stability and a parliamentary government.
Our banking system made a profit of $12Billion in 2008. We haven't had a banking failure in almost 100 years. Becoming Canadian isn't such a bad idea, and will be easy since you are accepting and not fighting high tax rates as they are imposed upon you.
I just hope we can get in and take you over before the Russians or Venezuelans do.
Wake UP, remember the Boston Tea Party, recover your backbone, and most of all, Act like Americans, suck it up, take charge!
June 2, 2009 at 5:36 pm
Tony Travers
The Cayman Islands are not a “tax haven”. According to the U.S. Internal Revenue Service, tax havens are “foreign jurisdictions that offer financial secrecy laws in an effort to attract investment from outside their borders.” In addition, “Tax haven service providers and their clients know their actions are veiled from tax authorities…by lack of tax treaties or tax information exchange agreements.” None of the above applies to the Caymans, where the financial sector operates with full transparency – no secrecy, no veils.
The Cayman Islands have comprehensive agreements and treaties in place with both the U.S. and various EU jurisdictions that provide complete transparency and prevent tax evasion.
Offshore accounts are used by U.S. corporations to compete internationally – as you note in your blog post, the US has the second highest corporate tax rate – almost 40 percent - of the countries in the 30-nation Organization for Economic Co-operation and Development. Some economists note that tax rate is a crushing burden.
In the global financial marketplace, the Caymans provide a tax-neutral jurisdiction with a secure legal system that is used by global financial institutions to access international capital markets. In 2007, at the peak of the market, $2 to $3 trillion flowed into the U.S. through Cayman Island funds, providing a tremendous lift to the U.S. financial system.
The Cayman Islands received a largely favorable analysis in a July 2008 General Accounting Office report delivered to the Senate Finance Committee.
A quote from Senate Finance Committee testimony by Michael Brostek, Director, Strategic Issues, GAO:
“U.S. officials consistently report that cooperation by the Cayman Islands government in enforcement matters has been good. Further, both the International Monetary Fund (IMF) and the Caribbean Financial Action Taskforce (CFATF) have cited the Cayman Islands for its efforts to comply with international standards, such as those related to anti-money-laundering and terrorist-financing activities.”
June 2, 2009 at 9:39 am
BACman
So bailed out companies like Bank of America layoff 35000, send thousands of American's jobs overseas, and now cheating in the tax games...someone played the trifecta!
June 2, 2009 at 12:35 am
Dan Mitchell
What foolish analysis. Bailing out these companies was a mistake, but the author wants to add insult to injury by making it harder for the banks to compete in global markets by hitting them with a big tax increase. This means, of course, that they will be less likely to return to profitability and more likely to look for more handouts from Uncle Sam. Watch the videos at the link to get the real story on tax havens.
June 1, 2009 at 10:46 pm
Travis H
Very good points about which interests will be the priority. Will the governments stake to see a payback in capital take the drivers seat or the policy to end tax havens win? Who knows. I doubt the Democratic White House thought that far ahead. They released an exit plan today. It reads like a generic blueprint on what to say when asked about the exit plan. Someone must have thrown it together in 15 minutes before the press briefing. Fairly sloppy.
June 1, 2009 at 10:06 pm
Hillbilly
How many tax shelters do you have Liz?
June 1, 2009 at 3:24 pm
earle
Very interesting,to say the least. Now that the government has a large,to small ownership stake (I hope the won't let them pay their TARP money back just yet til they check )in the companies afore-mentioned,can the U.S. Government (IRS) get their hands on the off-shore books to legally show tax-evasion,or better yet,malfeasance? Thanks E'Mac
June 1, 2009 at 2:51 pm
craig
I say, audit every single congressperson and senator first. I'm sure we can make up billions of dollars of tax revenue by auditing them. They are the crooks. Corporations shouldn't have to pay any federal income tax. This would filter savings down to the consumer and hopefully would create more jobs in this country.
June 1, 2009 at 2:12 pm
R Bauman
You better fire your headline writer and hire someone who can read and understand the article for which he or she is writing the headline. As Ms. MacDonald explains very well, these corporations are not "tax cheats." They are taking advantage of the US tax laws as written and exercising their right to minimize their taxes. Fox News should no better.
June 1, 2009 at 12:23 pm
Kris K
Everyone complains about the corporate tax rate. But, isn't this just a function of how we choose to pay for our government? I bet that we have near the lowest personal tax rate.
That being said, in the interest of making our companies more competitive in a global economy maybe the rates should be reduced. That would mean that personal tax rates would have to go up.
What does that increase do to the middle/upper class who would have to flip the bill for big government and low income handouts? Of course, when people start to feel the pain, maybe that would put more priority on reducing the tax burden.
June 1, 2009 at 12:03 pm
Tom Jones
Emac-
Another great article !
This new government bureaucracy will not work because of the following:
As they have always done, the corporations will just find new loopholes to avoid paying taxes.
The salaries and benefits for the 800 new federal employees will consume about half of any new revenues.
Overhead costs (Buildings, travel, security, parking, utilities, maintenance, repairs, etc.) will consume a good part of the rest.
As the collections shrink and the bureaucracy grows, it will eventually operate at a deficit.
These new employees will never go away.
Apparently, President Obamas 2 million new jobs are all government related ?
June 1, 2009 at 10:39 am
W. J. Sickels
Businesses pass along taxes to consumers as:
- Increased prices
- Decreased quality or quantity ( less in the box ) of products and services
- Fewer jobs or lower wages
Not to mention the general tax-drag on the economy because of the parasitic nature of government on the real economy.
I don't want tax cheating, but if the companies are LEGALLY avoiding taxes, then it seems to me that they are doing consumers a favor by decreasing the tax burden that they would otherwise pass to consumers.
TAX FLOWS DOWNHILL. Consumers pay ALL business taxes one way or another. Cracking down on tax havens is actually just another way of raising taxes on consumers, whether the President realizes that ... or not.
June 1, 2009 at 10:37 am
ace
So after this fake bankruptcy by GM and Chryler, next to vcime will be the real bankruptcy chapter 7, but not until the UAW is fully funded and we have lost well over 75 billion dollars.
citizens and businesses dodge their responsibility, while ordinary Americans pick up the slack. Unfortunately, that's exactly what we're doing," the president said, adding the government is hiring nearly 800 new tax agents "to detect and pursue American tax evaders abroad."
The use of tax havens by companies that the US taxpayer has bailed out also raises a broad range of policy issues for the Administration and the US Congress, which are moving to stabilize the economy and at the same time have argued that the bailouts will reap a profit for US taxpayers.
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T Brown
“You’ve got a building in the Cayman Islands that supposedly houses 12,000 corporations. That’s either the biggest building or the biggest tax scam on record.” This coming from a man who benefitted (putting it mildly) from the "work" of several non-profits assembled in a bit of a building in New Orleans. Guess he would know about how such scams work.
Donman
You seem to throw the word evasion around rather readily. There are tons of legitimate and tax legal ways of using off shore subsidiaries that allow MORE funds from off shore earnings to be repatriated to the USA. In fact, taxpayers are not obliged to pay more tax than required by the law; a fact ignored by populists.
Bennet Cecil
The best way to deal with these huge banks is to make them hold one dollar for every dollar they loan. This will stabilize them, make the FDIC irrelevant and mop up all of that funny money the Fed is creating. Now is the time to end fractional reserve banking. This will also force banks to bring those foreign dollars home to bolster deposits. Finally, the largest ten banks should be split into smaller units. We do not need "too big to fail' again. The largest ten banks should not have more than ten percent of all deposits. Remember we have thousands of banks and we should spread the money around. The president and congress are trying to tell savers and investors that the US is not friendly to capital. They have not gotten the message yet, but they will in another year or two with higher taxes, poor corporate earnings and a plummeting dollar. Investors should consider selling into the rising US market and moving their savings to a location that rewards investment.
John S Grant
My Dear Neighbor Americans, I think you should impeach your wonderful President Obama. That's some serious idiocy to listen to the wolf criers. A man with no spine gets sucked into lousy deals. No due diligence. This weakness in your leader is an invitation for our military to move against you. It is mighty tempting to consider an invasion and take over of your country since your leadership is so easily hoodwinked. We hear that your current president is courting terrorists and inviting them to celebrate the Fourth of July in America. Do you supply the flags for burning or do they bring their own? This is a joke, right? We would make you a sweet deal, you get to be our eleventh province and we give you financial stability and a parliamentary government. Our banking system made a profit of $12Billion in 2008. We haven't had a banking failure in almost 100 years. Becoming Canadian isn't such a bad idea, and will be easy since you are accepting and not fighting high tax rates as they are imposed upon you. I just hope we can get in and take you over before the Russians or Venezuelans do. Wake UP, remember the Boston Tea Party, recover your backbone, and most of all, Act like Americans, suck it up, take charge!
Tony Travers
The Cayman Islands are not a “tax haven”. According to the U.S. Internal Revenue Service, tax havens are “foreign jurisdictions that offer financial secrecy laws in an effort to attract investment from outside their borders.” In addition, “Tax haven service providers and their clients know their actions are veiled from tax authorities…by lack of tax treaties or tax information exchange agreements.” None of the above applies to the Caymans, where the financial sector operates with full transparency – no secrecy, no veils. The Cayman Islands have comprehensive agreements and treaties in place with both the U.S. and various EU jurisdictions that provide complete transparency and prevent tax evasion. Offshore accounts are used by U.S. corporations to compete internationally – as you note in your blog post, the US has the second highest corporate tax rate – almost 40 percent - of the countries in the 30-nation Organization for Economic Co-operation and Development. Some economists note that tax rate is a crushing burden. In the global financial marketplace, the Caymans provide a tax-neutral jurisdiction with a secure legal system that is used by global financial institutions to access international capital markets. In 2007, at the peak of the market, $2 to $3 trillion flowed into the U.S. through Cayman Island funds, providing a tremendous lift to the U.S. financial system. The Cayman Islands received a largely favorable analysis in a July 2008 General Accounting Office report delivered to the Senate Finance Committee. A quote from Senate Finance Committee testimony by Michael Brostek, Director, Strategic Issues, GAO: “U.S. officials consistently report that cooperation by the Cayman Islands government in enforcement matters has been good. Further, both the International Monetary Fund (IMF) and the Caribbean Financial Action Taskforce (CFATF) have cited the Cayman Islands for its efforts to comply with international standards, such as those related to anti-money-laundering and terrorist-financing activities.”
BACman
So bailed out companies like Bank of America layoff 35000, send thousands of American's jobs overseas, and now cheating in the tax games...someone played the trifecta!
Dan Mitchell
What foolish analysis. Bailing out these companies was a mistake, but the author wants to add insult to injury by making it harder for the banks to compete in global markets by hitting them with a big tax increase. This means, of course, that they will be less likely to return to profitability and more likely to look for more handouts from Uncle Sam. Watch the videos at the link to get the real story on tax havens.
Travis H
Very good points about which interests will be the priority. Will the governments stake to see a payback in capital take the drivers seat or the policy to end tax havens win? Who knows. I doubt the Democratic White House thought that far ahead. They released an exit plan today. It reads like a generic blueprint on what to say when asked about the exit plan. Someone must have thrown it together in 15 minutes before the press briefing. Fairly sloppy.
Hillbilly
How many tax shelters do you have Liz?
earle
Very interesting,to say the least. Now that the government has a large,to small ownership stake (I hope the won't let them pay their TARP money back just yet til they check )in the companies afore-mentioned,can the U.S. Government (IRS) get their hands on the off-shore books to legally show tax-evasion,or better yet,malfeasance? Thanks E'Mac
craig
I say, audit every single congressperson and senator first. I'm sure we can make up billions of dollars of tax revenue by auditing them. They are the crooks. Corporations shouldn't have to pay any federal income tax. This would filter savings down to the consumer and hopefully would create more jobs in this country.
R Bauman
You better fire your headline writer and hire someone who can read and understand the article for which he or she is writing the headline. As Ms. MacDonald explains very well, these corporations are not "tax cheats." They are taking advantage of the US tax laws as written and exercising their right to minimize their taxes. Fox News should no better.
Kris K
Everyone complains about the corporate tax rate. But, isn't this just a function of how we choose to pay for our government? I bet that we have near the lowest personal tax rate. That being said, in the interest of making our companies more competitive in a global economy maybe the rates should be reduced. That would mean that personal tax rates would have to go up. What does that increase do to the middle/upper class who would have to flip the bill for big government and low income handouts? Of course, when people start to feel the pain, maybe that would put more priority on reducing the tax burden.
Tom Jones
Emac- Another great article ! This new government bureaucracy will not work because of the following: As they have always done, the corporations will just find new loopholes to avoid paying taxes. The salaries and benefits for the 800 new federal employees will consume about half of any new revenues. Overhead costs (Buildings, travel, security, parking, utilities, maintenance, repairs, etc.) will consume a good part of the rest. As the collections shrink and the bureaucracy grows, it will eventually operate at a deficit. These new employees will never go away. Apparently, President Obamas 2 million new jobs are all government related ?
W. J. Sickels
Businesses pass along taxes to consumers as: - Increased prices - Decreased quality or quantity ( less in the box ) of products and services - Fewer jobs or lower wages Not to mention the general tax-drag on the economy because of the parasitic nature of government on the real economy. I don't want tax cheating, but if the companies are LEGALLY avoiding taxes, then it seems to me that they are doing consumers a favor by decreasing the tax burden that they would otherwise pass to consumers. TAX FLOWS DOWNHILL. Consumers pay ALL business taxes one way or another. Cracking down on tax havens is actually just another way of raising taxes on consumers, whether the President realizes that ... or not.
ace
So after this fake bankruptcy by GM and Chryler, next to vcime will be the real bankruptcy chapter 7, but not until the UAW is fully funded and we have lost well over 75 billion dollars.