about this blog
- Elizabeth MacDonald is the stocks editor for Fox Business Network. She is recognized as one of the top prize-winning business journalists in the country, and has received 14 awards, including the top prize in business journalism, the Gerald Loeb Award for Distinguished Business Journalism, and the Newswomen's Club of New York Front Page Award for Excellence in Investigative Journalism.
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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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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.
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.
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 ?
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.
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.
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.
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
Hillbilly
How many tax shelters do you have Liz?
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.
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.
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!
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.”
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!
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.
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.
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.