It's about time. Democrats are planning to cripple corporate tax havens

[Le Jacquelope]

Hopefully the whining of the Republicans will be ignored, the debates over offshore tax havens will end and swift, decisive action will be taken.

http://news.yahoo.com/s/ap/20090116/ap_on_go_co/tax_havens/print

Report: Over 8 in 10 corporations have tax havens
By KEN THOMAS, Associated Press Writer Ken Thomas, Associated Press Writer 1 hr 39 mins ago

WASHINGTON – Eighty-three of the nation's 100 largest corporations, including Citigroup, Bank of America and News Corp., had subsidiaries in offshore tax havens in 2007, and some of the companies received federal bailout funding, a government watchdog said Friday.

The Government Accountability Office released a report that said Bank of America Inc., Citigroup Inc. and Morgan Stanley all had more than 100 units in countries that maintain low or no taxes. The three financial institutions were included in the $700 billion financial bailout approved by Congress.

Insurance giant American International Group Inc., which has received about $150 billion in bailout money, had 18 subsidiaries. JPMorgan Chase & Co. had 50 units and Wells Fargo & Co. had 18; both financial institutions received government bailout money.

Sens. Carl Levin, D-Mich., and Byron Dorgan, D-N.D., who requested the report, have pushed for tougher laws to fight offshore tax havens around the globe. Levin, who leads the Senate Permanent Subcommittee on Investigations, has estimated abusive tax havens and offshore accounts cost the U.S. government at least $100 billion a year in lost taxes.

"I think we should take action to shut down these tax dodgers and we will be introducing legislation to do just that," Dorgan said.

General Motors Corp., which received $13.4 billion from the federal rescue package, had 11 offshore subsidiaries while GM's financing arm, GMAC LLC, had two offshore units. GMAC, whose majority owner is private equity firm Cerberus Capital Management LP, received $5 billion from the Treasury Department in late December.

Citigroup said in a statement that it has more than 4,000 subsidiaries around the globe "which enables us to serve hundreds of millions of individuals and institutions in more than 100 countries." A News Corp. spokeswoman declined comment. Messages were left with several of the companies identified in the report.

Separately, the GAO said 63 of the 100 largest federal contractors maintain subsidiaries in 50 tax havens.

Levin noted that many competitors use the tax havens to varying degrees. PepsiCo Inc. has 70 subsidiaries while the Coca-Cola Co. has eight units. Caterpillar Inc. had 49 while Deere & Co. had three.

"We need to put an end to the use of offshore secrecy jurisdictions as tax havens," Levin said.

The GAO said the subsidiaries could be established in the countries "for a variety of nontax business reasons" and said having a business unit in one of the countries "does not signify that a corporation or federal contractor established that subsidiary for the purpose of reducing its tax burden."

Citigroup had 427 units in 23 countries, including 91 subsidiaries in Luxembourg and 90 in the Cayman Islands. Morgan Stanley had 273 units, News Corp. had 152 and Bank of America had 115. Procter & Gamble Co. had 83 subsidiaries and Pfizer Inc. had 80 in the jurisdictions.

Several major corporations have announced plans to leave Bermuda, a leading offshore business center, amid the global financial crisis and fears of tighter tax rules. Tyco Electronics Ltd., which makes electronic components, and Foster Wheeler Ltd., an engineering and construction company, are reincorporating in Switzerland — which has a tax treaty with the U.S. — for tax and other reasons. Covidien Ltd., a health care products company, is heading to Ireland.

___

On the Net:

U.S. Government Accountability Office: http://www.gao.gov/

 

[oggbashan]

This has been tried in the UK.

The result?

Many corporations and individuals planned to remove all of their business or residency from the UK. The government and the UK economy would have lost billions.

The plan is on hold.

Og

 

[Le Jacquelope]

This has been tried in the UK.

The result?

Many corporations and individuals planned to remove all of their business or residency from the UK. The government and the UK economy would have lost billions.

The plan is on hold.

Og

Actually I'd just as soon bite the bullet and bar them from doing business at all here.

Contrary to popular opinion, businesses can be replaced.

Americans will still want stuff[tm]... new businesses will just have to get used to putting in their share.

I'm not one to bow to threats and I am definitely drawn to call bluffs. These robber barons are doing more damage to society by staying with us.

 

[JAMESBJOHNSON]

JERK A DODDLE DOO is, again, full of shit.

RULE #1 THERE ARE NO POOR, OPPRESSED PEOPLE IN GOVERNMENT. ALL OF THEM ARE THE RICH ELITES YOU HATE.

RULE #2 THEYRE IN GOVERNMENT TO ENSURE THAT THEY KEEP THEIR MONEY AND GET MORE OF YOUR MONEY. THEY LET YOU LIVE SO THAT YOU CAN PAY FOR THE SHIT THEY WANT. YOU ARE THEIR COW.

 

[ishtat]

The only effective way to eliminate off-shore tax havens is to reduce the level of tax at home to such levels that it is not worthwhile. Unlikely to happen with a left of centre administration.

There will be a lot of rhetoric around corporate and banking regulation in the next few months but in a globalised economy regulation has to be agreed by all participating countries.

The Sarbanes Oxley Act was supposed to tighten up a whole heap of corporate regulatory problems. Main result; the USA lost a heap of business to overseas entities.

A legislated solution restricted to the USA is no solution but I am doubtful that the egos elected to Congress will be satisfied with mere confirmation of an international agreement. They will probably promote sweeping new legislation and chances are it won't work.

 

[Le Jacquelope]

The only effective way to eliminate off-shore tax havens is to reduce the level of tax at home to such levels that it is not worthwhile. Unlikely to happen with a left of centre administration.

There will be a lot of rhetoric around corporate and banking regulation in the next few months but in a globalised economy regulation has to be agreed by all participating countries.

The Sarbanes Oxley Act was supposed to tighten up a whole heap of corporate regulatory problems. Main result; the USA lost a heap of business to overseas entities.

A legislated solution restricted to the USA is no solution but I am doubtful that the egos elected to Congress will be satisfied with mere confirmation of an international agreement. They will probably promote sweeping new legislation and chances are it won't work.

We don't go far enough.

Companies that aren't SOX compliant should be heavily tariffed.

We have to penalize imports from companies that won't follow the rules.

Let's replace SOX with environmental pollution laws or workplace safety laws. They all drive companies overseas. The same logic that says their flight overseas justifies removing SOX, also justifies cutting our wages to Chinese level wages, letting more workers die in collapsing mines and factories (and I'm sure you'd have no problem with that unless it was a family member ), and letting our air and water become as horribly polluted as the rivers and cities of China.

We need to grow a spine. If you can't play by America's rules, you can't trade with America.

What are they going to do? Cut off our exports? We're already running a monstrous deficit there, folks...

 

[ishtat]

We don't go far enough.



We need to grow a spine. If you can't play by America's rules, you can't trade with America.

I am almost sure I'm wasting my time so I'll restrict myself to just one question.

How do you dictate trading terms to a nation( China) which is holding in excess of $1 trillion of US government paper?

Hint. Any answer which suggests America can act in isolation or go it alone on a national basis is wrong.

 

[Le Jacquelope]

I am almost sure I'm wasting my time so I'll restrict myself to just one question.

How do you dictate trading terms to a nation( China) which is holding in excess of $1 trillion of US government paper?

Hint. Any answer which suggests America can act in isolation or go it alone on a national basis is wrong.

Shock therapy, my friend. We pay the dire consequence of getting ourselves detoxed from letting China hold all that US currency and debt.

Or we continue to allow them to discredit Western values and Democracy and inevitably render our US government paper worthless as China either beats the entire world down into accepting their rock bottom wages, pollution and unsafe factories as the only possible way anyone can compete against them for jobs, or China simply sucks the entire Western world dry of any meaningful job and leaves us all impoverished.

China and India and these other corporate miscreant havens will, with absolute certainty, bring the world down to their level, in one of those two ways, unless we cut them completely off. There is no way around it.

America will become like China or we will become a consequence of China.

Or we can cut them completely off and choose to trade only with ethical nations with Western values and Western rules regarding pollution, wages and human rights.

Anyone who would not trade with Nazi Germany is an idiot and a hypocrite to trade with China.

 

[JAMESBJOHNSON]

ISHTAT

You can always revoke their import licenses and licenses to do business in America.

You can likewise terminate the tax credits they get to re-sell cheap stuff to themsrelves. That is, whatever they import from China gets priced FOB China, for tax purposes.

 

[Le Jacquelope]

China and these other miscreant-haven nations don't want to fuck with trading with America.

We buy their crap. If we don't buy their crap, they sink back into the Dark Ages.

If they sell our currency we stop buying their crap.

 

[Liar]

China and these other miscreant-haven nations don't want to fuck with trading with America.

We buy their crap. If we don't buy their crap, they sink back into the Dark Ages.

If they sell our currency we stop buying their crap.

Then whose crap will you buy?

 

[Le Jacquelope]

Then whose crap will you buy?

We'd buy from Western democracies. Countries with better wages, workplace safety, and better controls on pollution.

Why didn't you figure that out?

 

[Liar]

We'd buy from Western democracies. Countries with better wages, workplace safety, and better controls on pollution.

Why didn't you figure that out?

So why don't we do that already?

Because people like their crap, you know, cheap.

If the Chinese banks sell their dollars, will Chinese manufacturers then magically not be the prime source for cheap crap anymore?

 

[trysail]

Of course the foreign purchasers of goods sold by Caterpillar, IBM, Procter & Gamble, Colgate-Palmolive, Pepsi, Deere, Microsoft, Oracle and TENS OF THOUSANDS of American manufacturers won't mind a bit.

Maynard Keynes, you ain't. Ever hear of Smoot-Hawley? Argentina? The Weimar Republic?

In case you haven't heard, capital is mobile and it's crackpot economics that always and inevitably leads to capital flight.

By god, I do believe you've got a Ph.D. in crackpot economics.

 

[Le Jacquelope]

So why don't we do that already?

Lack of a collective willpower. Lack of guts. Lack of a willingness to do what we need to do on a fundamental level.

Sure, we elected Obama, fortified a Democratic Congressional majority, and dealt a giant FUCK YOU to runaway capitalism and even Conservatism itself, but the fact that we're not hanging bankers off trees and light posts for demanding that we pay for their bailouts, means we've got a long way to go. We're not ready yet for the drastic, fundamental changes that need to be carried out to save Western democracy.

Because people like their crap, you know, cheap.

People like cheap crap, but they also like having jobs. They like living in a Western democracy.

If the Chinese banks sell their dollars, will Chinese manufacturers then magically not be the prime source for cheap crap anymore?

Oh come on now, I'm sure you didn't just suddenly forget the laws of economics.

If China sells the US dollar, the dollar will lose a huge amount of value. Export prices will skyrocket and the rising fuel costs (due to the devalued dollar) will boost said import prices into lunar orbit. So, no, Chinese manufacturers will no longer be the prime source of cheap crap at that point. The only place you could get anything cheap then is domestically, or maybe via Western allies that still trade in US dollars.

 

[Le Jacquelope]

Of course the foreign purchasers of goods sold by Caterpillar, IBM, Procter & Gamble, Colgate-Palmolive, Pepsi, Deere, Microsoft, Oracle and TENS OF THOUSANDS of American manufacturers won't mind a bit.

Excuse me, Tryfail. We are running a monstrous trade deficit with most of the world, Einstein. Despite all your TENS OF THOUSANDS of American manufacturer exports.

So tell me, Tryfail, 1) do you know what 'trade deficit' means? and 2) how is Smoot-Hawley going to make our existing trade deficit bigger? Hmm? Oh yeah, that's the part where you leave this thread and go back to your big crayola drawing board. Dumbass.

 

[trysail]

Every time I read one of your stupendous economic epiphanies, I am amused by the fact that it has apparently never occurred to you that (a) somebody already thought of it and (b) it already failed.

Zimbabwe is currently reaping the fruits of implementing your bizarre ideas. You might enjoy the place and seeing what your kind of thinking has wrought

Flexible exchange rates and capital flows equilibrate trade deficits.

 

[Le Jacquelope]

Every time I read one of your stupendous economic epiphanies, I am amused by the fact that it has apparently never occurred to you that (a) somebody already thought of it and (b) it already failed.

Where did you get this claptrap from? Another one of your heritage foundation blogs?

Zimbabwe ruined their crop making capacity, which is a huge part of their problem, nimrod. Plus they don't have any domestic ability to produce anything. America has tons of domestic production capacity. We shifted it overseas. And Zimbabwe is locked out of trade with the West - if you had your reading comprehension advisor at your side you would have seen I specifically said we need to restrict trade to trading ONLY with Western Democracies which, before China, were the big producers of goods for the world.

There's hardly ANY similarity between my plan and what Zimbabwe did.

I wish I could say I eagerly await another one of your crack addled attempts at comparisons, but really, watching you shit all over yourself is not my kick.

 

[Liar]

Oh come on now, I'm sure you didn't just suddenly forget the laws of economics.

The laws of economics certainly don't support any cataclysmic paradigm shifts in such things as manufacturing power, just because the wind has shifted. If it did, the Big Three would have been dead and buried two decades ago. They ran on stored steam for a loooong time. And you know what? China has the biggest fucking proverbial steam tank ever to churn on with.

Nobody has the societal infrastructure for mass manufacturing stuff that China has. It's called cheap labor, and the political willpower to shape whole communities and cities around the idea of industrial mass production.

If you think a plummeting dollar is going to change that in less than a decade, and make any western country competible in that area... hey, have at it, it's your head.

 

[Le Jacquelope]

The laws of economics certainly don't support any cataclysmic paradigm shifts in such things as manufacturing power, just because the wind has shifted. If it did, the Big Three would have been dead and buried two decades ago. They ran on stored steam for a loooong time. And you know what? China has the biggest fucking proverbial steam tank ever to churn on with.

Nobody has the societal infrastructure for mass manufacturing stuff that China has. It's called cheap labor, and the political willpower to shape whole communities and cities around the idea of industrial mass production.

If you think a plummeting dollar is going to change that in less than a decade, and make any western country competible in that area... hey, have at it, it's your head.

It's going to be our head anyway if we don't bite the bullet and close trade with China.

The idea that we can ever come up with any new kind of industry that China can't out-compete us with, outside of going into space or pure nano-fabrication, is a myth. No, actually, it's pure bullshit. (And with pure nano-fabrication, almost nobody but the machines will have any jobs.)

The world will have to live like China does in order to compete, and that is far worse than cutting off trade with China.

There aren't any new industries that can possibly come up that China can't take from us. Especially not "Bio tech" .

 

[incubus666]

Of course the foreign purchasers of goods sold by Caterpillar, IBM, Procter & Gamble, Colgate-Palmolive, Pepsi, Deere, Microsoft, Oracle and TENS OF THOUSANDS of American manufacturers won't mind a bit.

Maynard Keynes, you ain't. Ever hear of Smoot-Hawley? Argentina? The Weimar Republic?

In case you haven't heard, capital is mobile and it's crackpot economics that always and inevitably leads to capital flight.

By god, I do believe you've got a Ph.D. in crackpot economics.

Of course he has not forgotten Smoot Hawley. He just does not have any idea what it is or the depression it helped to deepen or even why it worked the way it did.

LJA is convensed. Convensed he knows every thing about everything and anybody who disagrees with him is wrong.

Why bother to try to educate those who refuse to learn? You just waste your time.

The old story about wrestling with pigs. You get dirty and the pig likes it.

 

[Le Jacquelope]

Just to show how stupid and clueless Trysail is, here's one from the right wing World Net Daily:

http://www.worldnetdaily.com/?pageId=61121

MONEYNETDAILY
Will trade deficit trigger depression?
Economists: It's de-industrializing America, leading nation toward 2nd-rate power status
Posted: April 09, 2008
12:45 am Eastern

© 2009 WorldNetDaily

WASHINGTON – America is selling its birthright not for a mess of pottage, but for a mess of Chinese junk, and the resulting "unsustainable" trade deficit is leading "to the collapse of the dollar, depression and conversion of the United States to a second-rate power," says a new book written by three generations of a family of economists.

"Not only will the United States feel the pain, but other countries will as well," write Raymond, Howard and Jesse Richman in "Trading Away Our Future." "Because other countries are dependent upon the U.S. dollar as a reserve currency and because they are dependent on exports to the United States to sustain their own economies, the eventual collapse of the dollar could wreak havoc on the economies of the whole world."

While some other economists have claimed there is no danger from a trade deficit that has reached nearly $60 billion, and some have even suggested they represent a blessing for Americans, the authors strongly disagree.

"A basic principle of economics is that there is no free lunch," they write. "Those who think that the Chinese, Japanese, Saudis, et al, are giving the United States a free lunch when they sell more than they buy are engaged in short term thinking that ignores huge long term costs."

The book is released at a time when more Americans are searching for answers about the stumbling state of the economy – with the dollar declining, foreclosures rising and credit tightening.

The Richmans tie the growing trade deficit to the "de-industrialization" of America.

"The financial flows that sustained these deficits did not go to expand the U.S. capital stock – they mostly financed consumption of foreign goods," they explain. "Japan and China and other Pacific Rim nations stole industry after industry from the United States. America's manufacturing investment declined so much that by 2004 and 2005, net investment in American manufacturing actually went into negative territory, meaning that U.S. manufacturers were not even investing enough to replace wearing out machinery and plants. The U.S. manufacturing workforce declined steadily, so that by 2007 over a fifth of the U.S. manufacturing jobs that would have existed given balanced trade had been lost. Those losing their manufacturing jobs often took less skilled jobs in the service sector, causing media wages to stagnate. In 2007, the United States was in a much weaker position to compete in world markets and the dollar had nowhere to go but down."

(Story continues below)



It's not just a lack of foresight by American policy makers that has created the problem, the authors write. It is also a conscious policy of some foreign countries to practice neo-mercantilism – with the U.S. as the target.

"Beginning in the late 1990s, China copied the policy that had converted Japan from a weak and backward economy to a world powerhouse," they say. "In recent years, more and more countries have been joining the bandwagon, with the United States as their primary target. They have been accumulating dollar assets in order to manipulate currency values and preserve the conditions that produce trade surpluses for them and trade deficits for us."

Adding to the problem, the authors write, was the emergence of a blind ideological commitment across the American political spectrum to "free trade" that really wasn't free at all.

"As advocates of free markets, we generally approve of relying on the free play of market forces to provide the highest level of welfare for Americans," they write. "But we discovered that free trade, normally beneficial, had become an ideology blinding the United States establishment from seeing key causes of the trade deficits and their disastrous consequences. The trade deficits are sustained by government policies, both U.S. government tax policies and foreign government mercantilist policies, not by the free play of market forces."

The authors believe the situation can still be reversed, preserving American dominance of the world economy.

"If not, then resolutely non-democratic China will dominate," they say. "The world's future is in the balance."

 

[Le Jacquelope]

Again, from the Right wingers themselves:

http://shop.wnd.com/store/item.asp?ITEM_ID=2244

Whistleblower Single Issue - November 2007

November 2007 – HOW GLOBALISM IS DESTROYING THE U.S. ECONOMY

"Roller coaster" – that's the best way to describe the U.S. economy these days.

Housing prices plummet after reaching dizzying heights. The stock market skyrockets to a record high, only to crash 1,000 points days later. The U.S. dollar loses more value every day against foreign currencies, while gold hits a 27-year high.

And while the federal government insists inflation is almost non-existent, life's essentials like food and gas seem to cost so much more. It doesn't make sense.

Meanwhile, everyone is wondering: "Is America heading into a recession, how will that affect me and my loved ones, and how can I protect myself?"

The future of the U.S. economy is the focus of the November Whistleblower, titled "HOW GLOBALISM IS DESTROYING THE U.S. ECONOMY."

"We've put together a Whistleblower issue that answers – in crystal clear, non-technical language – the most important questions everyone needs answered about the economy and what's likely down the road," said WND and Whistleblower Managing Editor David Kupelian.

In this special issue, all of the articles take the form of answers to crucial issues, including:

* "If inflation is so low, how come food and energy cost so much?"

* "What is the 'housing bubble,' and why did it burst?"

* "What's really going on with the stock market?"

* "How big is the federal deficit, really?"

* "Is America heading into a recession?"

* "Will the dollar collapse in 2008?"

* "What will happen to the price of gold?"

* "How real is the prospect of the North American Union and the amero?"

* "Why do U.S. jobs move overseas?"

* "What should we do about China's unfair trade practices?"

* "Why are Arab countries trying to buy up vital U.S. assets?"

* "What has the Fed done to Americans?"

* "Did the Federal Reserve cause the Great Depression?"

* "Why does government steal from its citizens?"

* and much more.

"If you're tired of gobbledygook from economic analysts who leave you confused and unsettled, this issue of Whistleblower will be a refreshing and very valuable change," says WND founder and Editor Joseph Farah. "It's essential information for unstable economic times like these."

 

[trysail]

"The Smoot-Hawley Tariff Act (sometimes known as the Hawley-Smoot Tariff Act) was an act signed into law on June 17, 1930, that raised U.S. tariffs on over 20,000 imported goods to record levels. In the United States 1,028 economists signed a petition against this legislation, and after it was passed, many countries retaliated with their own increased tariffs on U.S. goods, and American exports and imports plunged by more than half..."

http://en.wikipedia.org/wiki/Smoot_Hawley_Tariff

 

[Le Jacquelope]

"The Smoot-Hawley Tariff Act (sometimes known as the Hawley-Smoot Tariff Act) was an act signed into law on June 17, 1930, that raised U.S. tariffs on over 20,000 imported goods to record levels. In the United States 1,028 economists signed a petition against this legislation, and after it was passed, many countries retaliated with their own increased tariffs on U.S. goods, and American exports and imports plunged by more than half..."

http://en.wikipedia.org/wiki/Smoot_Hawley_Tariff

I'm done dealing with your buffoonery. I've explained to you often enough that tariffs against China and India are not the same as slapping tariffs on ALL countries like Smoot-Hawley. You can't grasp that. Instead you sit there and throw straw man temper tantrums like this because you can't answer what I actually said.

It'll be a great thing not to have to look at your sickly green text anymore. You add absolutely no value to any conversation.