A May 4, 2009 analysis titled “International Tax Reform” published by Credit Suisse came to me from my broker. Just in case your news source of choice is spending all of their effort on politicizing the issue instead of focusing on the facts, I thought I would worth offer a few tidbits as food for thought….
“If you had been expecting the Administration to try and completely eliminate a company’s ability to defer U.S. taxation on its overseas profits (subjecting worldwide profits to a 35% tax rate whether repatriated or not) the targeted nature of the proposals may come as a relief.” (p.1)
“Three of the proposals are projected to generate $189.6 billion of additional tax revenue from Corporate America between 2011 and 2019.” (p.1)
“So where does one go to get a rough idea as to which companies …the amount of earnings that have so far escaped U.S. taxation. We pulled together the undistributed foreign earnings for each company in the S&P 500 as disclosed in the 2008 10-K’s. It amounted to over $1 trillion. The amounts are highly concentrated among a few sectors, Health Care and Information Technology account for about 41% of the total.” (p.1)
Reform deferral rules
“The Administration is proposing that companies could no longer get the best of both worlds ; they would be required to defer the deduction of expenses (except R&D) on a U.S. tax return that are associated with foreign income until it’s repatriated.”
Close foreign tax credit loopholes
“The Administration is proposing to change that , so companies could only use foreign tax credits from foreign taxes paid on income that is subject to U.S. tax.” (p.2)
Eliminate loopholes for “disappearing” offshore subsidiaries.
“… the “check the box” rules allow the two subsidiaries to disappear (i.e., branch to branch transactions are ignored) and as a result the company avoids…taxation. (p.2)
“In addition to the concentration by industry, there are also a small group of companies that account for much of the undistributed foreign earnings. We found 145 companies with more than $1 billion of undistributed earnings, including the 10 companies in Exhibit 2 where undistributed earnings exceed $20 billion. Those 10 companies have $360 billion of undistributed earnings, more than one third of the total for the S&P 500 companies.” (p.4)
Wonder what can be inferred about “big business”, “special interests” and the “richest 1%” from any of this?
Wonder if the politicization of the issue of tax reform might not be getting spurred on by those with the most to lose from the application of a little fairness? You know, that richest 1% that professes to be looking out for us, American business, for smaller government, family values, and all of that.
While it’s no surprise to see big companies as the ones in the top 10 S&Ps who have the most undistributed foreign earnings, I wonder what conclusions might be drawn from a little speculation about the influence big oil, big drugs, and big banks have in our lives, our government, and through which party?
I wonder if there’s room for discussion about which party has the average citizen’s best interests in mind, which one concerns themselves primarily with the wealthiest among us, and with which party’s constituents might each of us have the most in common – not so much on an ideological level but on a practical level?
At the risk of offending yet again – and believe me that’s not what I’m trying to do, I’m only expressing my opinion – I want to compliment the Republican leadership. Huh? Yes, compliment.
Since the days of Reagan they have, in my humble opinion, done a masterful job of what I would describe in my own limited way as “hood-winking” Americans. The Republican leadership set a course back then and has had a measure of success in getting people to think that the party’s core values and platforms are based on beliefs and ideas that benefit “Main Street Americans.”
Again and only in my opinion, the platform of the Republican party is built on the reddest of herrings.
…the Constitutional right to bear arms includes things like semi-automatic assault weapons. (What’s next, recreational RPGs?)
…a woman’s right to have an abortion should be unlawful. (Why, so we can have our own version of Sharia law but with a Christian twist?)
…we need a Constitutional amendment to define marriage as only between a man and a woman. (Why, so we can then make legal our own unique brand of religiously-based hatred and discrimination? Hey, it’ll give us something in common with radical Islamists! Who knows, it could be the first step in a bridge to better understanding and acceptance between our cultures!)
…Christian creationism – now euphemistically called intelligent design and never ever, ever, even with the slightest consideration for what other religions and their beliefs have to say about creationism – should have a place in science curriculum in our schools. (Why, so we can raise a nation of god-fearing Christian xenophobes to the exclusion and peril of all non-believers?)
…the so-called “war on terror” gives us the right to invade sovereign nations at will and regardless of the justification (or lack thereof), and to then violate international law and any shred of decency by torturing people. (Why, because we’re Americans, dammit, and you can love it or leave it!??)
…environmental protection laws and policies aren’t warranted and only hold back American enterprise and energy independence. (Because, after all, climate change is a myth and, besides, we need that additional 3% of our domestic oil consumption hiding in pristine wildernesses like ANWR and the outer continental shelves so we’re no longer dependent on foreign sources who, for some strange reason, seem to hate our guts. Crazy Islamo-facists that they are…)
…the way to feel more secure in the homeland is to do things that make us feel safe like taking off our shoes in airports and building walls on our borders….but only on our southern border. (Why? Isn’t it obvious? All terrorists are Muslims from the Mideast, and everyone knows all those camel jockeys are from desert countries. The soles of their feet are rough from wearing sandals in the sand so they’re easily recognized at airport security. Besides, everyone knows they hate the cold so they’ll never come across the Canadian border.)
Alright, that’s enough of that silliness.
Here’s my opinion. None of this bullshit really matters to the true Republican leadership. It’s a ruse. The neo-conservative-gun-toting-drill-baby-drill-you’re-either-with-us-or-aginst-us-love-it-or-leave-it-mission-accomplished-Minuteman-faux-patriotism-bible-thumping-divisive-focus-on-the-family stuff is only window dressing meant to attract, seduce and lull people into believing that the Republican party has some kind of concern about average Americans.
Hey, it’s just my opinion, but they don’t. I’m not telling anyone what to believe; just expressing my opinion.
In my opinion, it is the oligarchy of the wealthiest 1% who run the Republican party. If they had their way, they’d run every aspect of our lives because of the obscene profit and power in it. They are the Orwellian 1984 force that we need to be worried about, not the supposedly big government-minded Democrats. We are, in my opinion, just another resource to the Republican oligarchy; another raw material from which they become even wealthier and more powerful.
This isn’t, by the way, limited solely to Republicans. Sadly, too many people of power of every stripe exercise their will on others without real regard for their followers or the organization.
I just think that there’s a whole lot more to fear from Republicans than from Democrats. Democrats can’t seem to agree on enough, always seem to be getting each other’s way, and aren’t very good it seems at towing a simplistic party line that everyone in America can understand.
The Republicans, on the other hand, seem to have decided about 30 years ago that they would cast themselves as the ultra-conservative party on social, economic and political issues. Simple message: The party of good old fashioned American values – small government, baseball, hot dogs, apple pie, and church on Sunday – and leave the rest to us and to hell with anyone who doesn’t conform to our beliefs.
Those ideas serve the interests of the wealthy extremely well. Republican dogma is better for a rich oligarchy than ideas and principles that…
….allow for different belief systems and cultural norms
….put restrictions (call them whatever you like; rules, laws, regulations, etc.) on what businesses can and can’t do to make a profit
….keep and strengthen the separation of church and state
….create and fund social programs designed to help the poor and middle class.
Which is why I rail against the Republican party – not you the member of the Republican party – the party’s leadership and the values they profess to stand for and perpetuate in the face of what I see as the reality of who I think they truly have as their core constituency – the ultra-wealthy.
Shit. I probably offended someone with that statement, too. I’m sorry if anyone reading this is a mega-rich member of the RNC leadership.
Believe me, I don’t see the Democratic party as perfect by any stretch. It just seems to me to be more concerned about the average citizen and the issues with which I, on a practical level, have much more in common with than the richest 1%.
Anyone want to get into how the swine flu can be tied to unrestricted greed on the part of American pork producers moving production and jobs overseas because of a lack of regulation? 😉
The Straw That Stirs the Drink!