Kerry Carved Out Tax Loophole for Heinz Foods

NewsMax ^ | 7/14/04 | Carl Limbacher

[diamond6]

Where is this "W Ketchup" being sold? I want some.

[rwfromkansas]

His proposal was posted on the official John Kerry website linked in the NRO article.

This began with the proposal. First mention of the loophole was in http://www.techcentralstation.com/041504C.html

Then....I am not sure what happened in between, but then it just hit National Review Online, at which point Newsmax picked it up.

It has legitimacy, as it is not a Newsmax-only piece.

[Tymesup]

"how specific to H.J. Heinz Foods the exemption was."

I can think of two pieces of pension legislation that appear to have affected one company apiece. The PENSION FUNDING EQUITY ACT OF 2004 refers to 501(c)(5) organizations which established a plan on June 30, 1955, a sneaky way to specify something without actually naming them.

[rwfromkansas]

Why was Hon banned again?

[teletech]

Its either that or he can take the Fort Marcy Park option, but I honestly believe if the Clintons want him gone he goes.

If Hildebeast gives the order, Kerry IS history!

[Defender2]

Please tell me more, I don't have enough info to work with.

I don't know poster, Hon, and have not read or seen any of Hon's posts.

I'll do a search.


D2

[rwfromkansas]

Oh.....that person did some great research on Kerry...the first link in your thread.

[GROOVY]

a clip from the article linked above:

---

The Kerry team clearly recognized the possibility that they were causing significant harm, because they added a loophole. If a U.S. multinational produces a product in a foreign country for consumption in that country, then they will continue to allow the firm to avoid U.S. tax until the money is mailed back home.



Think of all of the needless and duplicative activity this will generate. Multinationals will be forced, in pursuit of tax savings, to introduce newer and smaller production facilities in every country they serve. Transportation costs are low enough, and scale economies large enough, that most multinationals operate a few production facilities located in attractive hubs around the world.



So why would anyone propose such a thing? Some industries, like food production, already operate that way. Because of local food regulations, and concerns about spoilage, it is often the case that food companies locate a separate plant in each country that they serve. Chief among these is Heinz, which owns 57 plants outside of North America that, as the company states, "provide products to consumers in those markets."

---

[thoughtomator]

Why the heck else would she marry him, if not for his Senate influence? She obviously doesn't like him very much - they can't even coordinate on him trying to kiss her in public without her pushing him away.

[Defender2]

I just did a search, and Hon's posts look perfectly normal.

Hon's last listed post was, 03/26/2004.

Judging by Hon's post, indeed, Hon does know a lot about the infamous kerry.

I don't think Hon has been banned. I hope Hon is alright and in one piece. Looking at his posts, it seems Hon has a lot of knowlege.

Best FReegards, D2

[nothingnew]

kerry is a marxist, and most of our government is not far behind. Get used to it people.

FMCDH(BITS)

[nopardons]

Oh Oh...here we go again,with samned Dems making "special" laws/loopholes for themselves alone.

[nopardons]

Oh Oh...here we go again,with damned Dems making "special" laws/loopholes for themselves alone.

[reformedliberal]

Is this something for which he could be impeached from the Senate, or is it just Senate business as usual?

[conservative in nyc]

Thanks. As I thought, most of the original NRO column was not about Heinz Foods Co., but about Tuh-ray-zuh's unprecedented refusal to release all of her tax returns. She's stonewalling. Obviously, something's fishy and there's probably a reason for it (like she has engaged in questionable estate or income tax planning), but the media has let up on the issue.

The so-called loophole in Kerry's disaster of a tax proposal would help companies that manufacture and sell products in the same country. Kerry's disaster of a tax proposal would basically otherwise hike income taxes on U.S. corporations with foreign subsidiaries, taxing their income earned overseas regardless of whether cash is brought back into the United States. This is purportedly to stop "Benedict Arnold" companies from sending jobs overseas, but ignores the main reason why taxes distort investment decisions in the first place --- U.S. corporate income taxes are simply too high relative to the rest of the world. As far as I can tell from the links provided, the same-country exception for manufacturing and sales is an attempt to ameliorate this harsh tax hike result, but distorts investment decisions by requiring U.S. companies build plants in every country where they sell goods --- making it difficult for a company like Nike that manufactures sneakers that can be imported into any country to benefit from the lower costs of having one big factory, but benefiting companies like Heinz that already manufacture in many different places due to laws or other barriers.

[conservative in nyc]

Is this something for which he could be impeached from the Senate, or is it just Senate business as usual?

No. It's a Kerry campaign proposal, not any legislation that has any chance of passing in the current Republican-controlled Senate.

[rwfromkansas]

That is my thought as well.

I was hoping for a smoking gun, but it is not enough for me to write a story about it for the newspaper. It may not necessarily be an attempt to get a loophole for Heinz, but instead just try to make his entire proposal more palatable because of how awful it really is.

[Spirited]

What do we bet the IRS won't touch it with a long pole. Espcially while they are pulling records out of ministries and churches for no good reason.

[Southack]

So how do U.S. multinational firms stay competitive despite these disadvantages? Under current law, they can locate production and profits abroad and avoid paying the very high U.S. taxes by letting profits sit in bank accounts overseas. This strategy does not avoid foreign taxes, but since those are much lower than ours, the playing field is leveled somewhat. A U.S. manufacturer can produce a good in Ireland for sale in Europe and be competitive despite our high tax rates.



Senator Kerry plans to end this. If a multinational makes money abroad, it must pay U.S. taxes immediately. This will make the negative impact of high U.S. taxes impossible to avoid and force U.S. firms to significantly increase prices. That should lead to sharp reductions in market share and employment both at home and abroad, and a likely wave of foreign acquisitions of U.S. companies. The plan's second measure, a 1.75 percent reduction in the corporate tax rate on all worldwide profits, would not begin to offset the lost benefit of tax deferral.



The Kerry team clearly recognized the possibility that they were causing significant harm, because they added a loophole. If a U.S. multinational produces a product in a foreign country for consumption in that country, then they will continue to allow the firm to avoid U.S. tax until the money is mailed back home.



Think of all of the needless and duplicative activity this will generate. Multinationals will be forced, in pursuit of tax savings, to introduce newer and smaller production facilities in every country they serve. Transportation costs are low enough, and scale economies large enough, that most multinationals operate a few production facilities located in attractive hubs around the world.



So why would anyone propose such a thing? Some industries, like food production, already operate that way. Because of local food regulations, and concerns about spoilage, it is often the case that food companies locate a separate plant in each country that they serve. Chief among these is Heinz, which owns 57 plants outside of North America that, as the company states, "provide products to consumers in those markets."

[gonzo]

More to the point, pots..................FRegards