Tuesday, September 23, 2014

Obama Administration Acts to Curb Corporate Tax Dodgers

The tactic is called "tax inversion." A company moves its official headquarters (and profits) to another country to avoid paying U.S. taxes.
The Obama administration has moved to curb at least some of this unpatriotic abuse of the tax code.
Republicans say that's because our corporate taxes are too high.
Fine. If taxes are too high, companies can and should move. But they can't expect to continue to rake in their profits from U.S. consumers (taking advantage of U.S. government services and the infrastructure built by our taxes) without paying U.S. taxes.
It's like rent.
You think your rent is too high in, say, Bloomfield Hills. So you move to a lower-tax community. Unlike corporations, which continue to "live" in the U.S. even though they are now foreign, you actually have to physically move.
You don't get to take the Bloomfield Hills schools or fire department or city parks with you. If you want the privileges, perks and advantages of living in Bloomfield Hills you pay the taxes.
The story of Burger King is especially galling because Burger King relies on U.S. poverty programs to subsidize its profits. Most Burger King employees are paid at below-poverty-level wages, most are part-time which means the company avoids paying for their medical coverage. The slack is taken up by U.S. taxpayers for Medicaid, food stamps, Section 8 housing, Earned Income Credit and other subsidies enacted to help the working poor.
And how many hamburgers would they sell if we didn't have government-built roads? Or government-built airports (many of which have Burger King franchises)? What if they didn't have the USDA protecting the quality of the meat they buy?
So Burger King's owners make huge profits, and avoid contributing for the very government services that make those profits possible.
Or consider the case of energy companies which extract fossil fuels from American soil, ship it around the world with the protection of the U.S. Navy and U.S. Coast Guard, but dodge paying taxes? We're talking about Chevron, Occidental Petroleum, ConocoPhillips and Exxon Mobil which combined for tax subsidies of $23 BILLION.
The list of profitable U.S. companies which pay no federal taxes and even, in some cases, get huge refunds, is staggering. In 2012, 111 of the multinational companies in the Fortune 500 were profitable and paid no federal income tax for at least one out of five years; 55 had multiple no-tax years; 26 paid no taxes over the entire five-year period. 43 companies in the list received an aggregate refund of $28-billion. In other words, those 43 made more money AFTER they filed their taxes than before.
Senator Carl Levin is spending his last few weeks in office working to fix this abuse of our tax code. Given the nature of the do-nothing Congress all he'll be able to do it make some noise and lay the foundation but, barring a miracle, any effort to require American businesses to pay their fair share to support this nation will die from a Senate filibuster or House intransigence.

1 comment:

  1. This is such an informative article. Thanks for telling us the history of Burger King.

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