Posted on 07/22/2014 3:33:01 PM PDT by Kaslin
The Huffington Post is beside itself with indignant rage over companies moving their headquarters overseas to avoid paying the highest corporate income tax in the industrialized world. Feeling that Secretary Jack Lew was onto something when he accused companies of being economic traitors for reducing their tax burden, the HuffPo let loose a string of economic illiterate ramblings about the indecency of corporate profits.
Early last week, the drug firm Mylan stomped on the Stars and Stripes as it ditched America for the Netherlands. Then, on Friday, the drug company AbbVie similarly renounced America. For 30 pieces of silver, it will become Irish. Medical device maker Medtronic deserted America for Ireland last month. The pharmacy chain Walgreens recently announced it may be next. It plans to dump the land of the free for the bows and scrapes of royal subjects.
Is it just me, or does their article read like they just got dumped by the cool kid in high school? Of course, it got better as the article rambled on about corporations’ economic duty to pay taxes. (Because, ya know, America is so well known for its love of high taxation. Just ask those Colonists in Boston.)
[These companies refuse] to pay taxes on foreign income to the country that nurtured them, protected them from patent violators and unfair competitors, and provided them with educated workers, federally-sponsored research and development, and myriad other public services. Now, they can freeload instead. As a result, their U.S. competitors, as well as hardworking Americans, will pay more to cover the shirkers’ share.
Oh, right… Now I get it. These evil capitalist organizations didn’t actually build their businesses themselves. No, no, no… It took the benevolence of government funded programs to make success possible in America. And, furthermore, they are now forcing domestic competitors and hardworking Americans to foot the bill for such government success stories like Healthcare.gov, Dodd-Frank, the EPA and the FDA. (Deep breath… The sarcasm is getting a bit thick here.)
I guess it would probably be useless to explain to HuffPo that most big corporations dedicate entire legal teams to fighting the effects of well-funded government. Yeah, patent protections are important. But let’s be honest: the real “problem” progressives seem to have, is that the government is no longer getting 35 percent (almost 40 percent when state taxes are taken into account) on money that these companies earn overseas.
In other words: The liberal rag seems upset that money made in Ireland by an otherwise American company, will remain in Ireland… Yeah, the horror. I mean, profitable companies tend to employ more people, contribute to more charities, invest in more communities, and ultimately broaden the tax base by increasing the household wealth of working families… But, I guess the some Liberals believe government would spend that money better, right?
Well… Yeah. That is what our economically challenged “patriots” over at the internet’s version of MSNBC believe. When Bill George, with Medtronic, defended his company’s tax inversion (fancy-talk for moving headquarters to a jurisdiction with a more amicable tax burden), the HuffPo huffed and puffed that government was a better steward of corporate funds than evil profit-seekers (AKA: investors, shareholders and executives):
George said tax evasion was hunky-dory: “The only reason they’re doing the inversion is to free up the cash overseas. . . That money today can’t be put to good use right now.” That, of course, isn’t true. It could be put to good use immediately if Medtronic paid the federal income tax the company owes on it.
Whoa… I am almost overwhelmed. First of all, anyone (Democrat, Republican, Liberal or Conservative) that says government is an efficient steward of capital, obviously hasn’t heard about the taxpayer funded study on seahorse sexuality; or the DMV; or healthcare.gov; or the Veterans Administration; or the GAO’s lavish conferences; or … Well, I could go on, but we have limited space left in this column.
More importantly, none of these companies are evading taxes. And words do matter in this case. Tax evasion is what ultimately landed Al Capone in jail, because it is illegal. Evasion is the criminal act of sheltering cash in dishonest and coercive ways with the intent of dodging a legitimate tax.
Tax avoidance is what the rest of us do when we take the mortgage tax deduction, earned income tax credit, standard deduction, interest deduction, or retirement contribution exemption. In other words: avoidance is the legal act of lowering one’s tax burden. And while the writer over at HuffPo undoubtedly lets TurboTax find him a couple extra credits and deductions, it’s apparently sacrilege for a company to do the same.
Because, in the end, that is the reason for these tax inversions. CEOs, executives, and company boards have a fiduciary obligation to keep the cost of doing business (which includes taxation) at a minimum. Imagine all the new drugs Pfizer will soon be able to fund, now that they aren’t paying 35 – 40 percent of their overseas profit to an inept American government.
As angry as liberals might want to get at a company for increasing their profit, can’t we take a minute to recognize that profits are pretty much the reason for America’s historical prosperity? Businesses, like it or not, operate off of the concept of getting a return on their investment. And when business is more profitable overseas (especially in Socialist Europe) than in the “Land of the Free”, we might have a bit of a problem.
Rather than address the underlying cause of inversion, Liberals would like to demonize, insult, and attack businesses for moving their cash out of the reach of Uncle Sam. Strangely, the HuffPo never mentioned lowering the corporate tax burden, or making the American tax code more competitive with the socialized nations of Europe.
Much like our liberal friends, I would rather have companies repatriate their overseas profits to America as well. Of course, the progressive “solution” to tax inversion seems to be… new punitive taxes on companies that want to move overseas. Now, I understand that Liberals feel entitled to the profits of those capitalist pigs who are avoiding the highest tax rate in the world, but even I know that 12 percent (Ireland’s tax rate) of billions of dollars is more than 35 percent of nothing. (And I didn’t even take Common-Core math!)
You want those evil capitalists to bring their money home? Stop trying to take all of it.
The corporate tax should be repealed because it is double taxation of profits — first, at the corporate level, and again when dividends or capital gains are distributed to shareholders. If the politicians would have a hard time explaining repeal, they should go for exemption of dividends from the income tax.
Bingo, its all about profit. Why can’t the leftist morons understand that?
And screwed its contributors in the process.
Funny how leftist build “paradises” where no one is permitted to leave without getting their pound of flesh first...
This is really simple, and simple to explain to a liberal.
Profits = What is left over after ALL expenses, including taxes.
Your Personal Savings = What is left over after ALL expenses, including taxes.
Q. Should people/individuals/liberals etc, be ALLOWED to save their own money ?
Fundamentally, there is no difference.
It’s always heartwarming to see a cadre of rich jackholes pretend to condemn all the rich. Get the rope.
Thanks Kaslin.
I say let 'em move...And then refuse to allow them to do business in the U.S...Their product prices would not decrease if we allowed them to be sold here...
The lack of those products on the U.S. market would be taken over by other competitors or new start ups, hiring American workers...
A masterful discussion by VDH about this topic
http://www.nationalreview.com/article/383289/valley-shadow-victor-davis-hanson
Sure. Good to see someone arguing for fewer consumer choices.
Amazing how that concept is foreign to so many liberals...
All medical related companies....
Well, on the bright side, Obama is creating jobs... In Ireland that is.
Seriously, Celtic Tiger part 2. Instead of lowering Ireland’s corporate income tax further, and offering more incentives for corporations to do business there, the Emerald Isle can just sit back while the dunce in the white hut creates a hostile business environment in the U.S., same net effect.
Note to liberals - higher tax rates reduce tax revenue as a rule. Basic economics that. Better to have one of the world’s more favorable tax environments and attract the world’s leading businesses, as 20% or so of trillions is a lot better than 60% of $0.
When will these scu&bags go away?
Just asking.
IMHO
I have lost track of how many times OZero has raised taxes to pay for his ever-growing deficits. You’d think that, with all the big tax increases, they’d eventually balance the budget. But they can spend it faster than we can send it in! My income taxes are at least double what they were in 2008!How much is enough?
Exactly! You can only buy a Chevy Nova. In blue. And you’ll like it!!
See Laffer Curve.
I believe that is Joe Manchin’s daughter.
I have $10 that says these loopholes were put in by a DEMONRAT for the specific purpose of helping one of their favorite marxist companies, like Apple, Google,Cisco, Facebook.
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