Posted by Michelle Moquin on July 24th, 2014
So they get to be corporations again to gain a tax advantage. If they are people, they shouldn’t be able to gain tax free status by moving their address overseas. People who are citizens of the U.S. can’t do that. Where are those five S.T.A.R.K., who said corps are people now?
On the one hand, the corporation gets to tell you what you can get from your doctor as a person (Hobby Lobby) , but on the other hand they don’t have to pay their fair share of taxes as a person. Nice, real nice if you have the paid for support for it.
You can’t have it both ways, but of course the Supreme Court is allowing them to do it. Legislating from the bench at its best.
From Think Progress:
Some Corporations Are Moving Addresses Overseas To Dodge Paying Fair Share Of U.S. Taxes
We talk a lot about the grave problem of inequality and how our economy is not working for most Americans. One of the causes of this big problem is that corporations and the wealthiest are taking advantage of the system, exploiting tax loopholes, and rigging the game to benefit themselves, often at the expense of everyone else. The latest tax-dodging tactic that some corporations are considering using is a perfect example of this rigged system–and demonstrates why we need our legislators to take decisive action to stop it.
What Is The Problem?
A loophole in the tax code essentially allows a corporation to renounce its corporate citizenship in the United States, move its address overseas by merging with a foreign company, and dodge its U.S tax obligations by paying most of its taxes to a foreign government with lower tax rates than the U.S. The process takes place primarily on paper — most corporate operations remain here. The corporations that do this want all the benefits of being an American company without paying their fair share of taxes. That makes the rest of us pick up the tab.
The practice has become known as “inversion.” But what it really amounts to is desertion. And it could cost Americans tens of billions of dollars.
Who Is Taking Advantage?
There are 47 firms in the last decade that have exploited this loophole, according to new data compiled by the nonpartisan Congressional Research Service. But it’s a hot topic again because at least a dozen U.S. firms are currently considering taking advantage of it.
One of those corporations is Walgreen. The company has always prided itself on being America’s go-to pharmacy: from 1993 to 2006, it had the slogans “The Pharmacy America Trusts” and “The Brand America Trusts.” A biography of the company is entitled, “America’s Corner Store: Walgreen’s Prescription For Success.” Walgreen chief executive Gregory D. Wasson has said the company is “proud of our Illinois heritage.”
At the same time, Walgreen is currently considering merging with European drugstore chain Alliance Boots and move to Switzerland as part of a plan to dodge up to $4 billion in U.S taxes. The company that gets almost a quarter of its $72 billion in revenue directly from the government through Medicare and Medicaid is trying to reap even more profits while leaving taxpayers holding the bag.
Walgreen isn’t the only one. Pfizer, the pharmaceutical company, tried merging with the smaller U.K.-based AstraZeneca earlier this year and switch its address, where the tax rate is lower. It was estimated the move would save them at least $1 billion a year in tax obligations to the U.S. (the deal ultimately didn’t go through). Medtronic, a medical device company, plans to move its corporate address to Ireland, a tax haven, to avoid paying U.S. taxes on $14 billion. Chiquita, the banana distributor, is also heading to Ireland after acquiring Fyffes. These tax dodges, as Fortune magazine calls them in this week’s issue, are “positively un-American.”
What Can Be Done?
President Barack Obama’s 2015 budget proposes making these corporate desertions more difficult by raising the minimum levels of foreign ownership required to 50 percent (currently it is just 20 percent), which means that U.S. corporations could not move their address abroad unless they actually ceded a controlling interest to foreign owners. Congressional Democrats have made similar proposals. Treasury Secretary Jack Lew recently called for more “economic patriotism” and urged Congress to “enact legislation immediately” to close the loophole. Leaders on both sides of the aisle want comprehensive tax reform, but finding common ground in the current Congress could take a while. The simple fact is that as more and more companies exploit this loophole, a solution for this problem is needed right away–and Congress has the power the solve it.
BOTTOM LINE: More and more corporations are taking advantage of a tax loophole that helps their bottom line while costing American taxpayers billions every year. These companies want to continue to take advantage of the things that make the U.S. the best place in the world to do business, while at the same time pay less than their fair share by moving their corporate addresses overseas. That desertion is unfair, unpatriotic, and has got to change.
Readers: What’s up? Blog me.
Justin: Unless people wake up and start paying attention to what is happening, instead of just accepting what the repubs are doing to Obamacare and everything else that Obama is for in order to destroy our country, we are screwed. Don’t be surprised if they do try and arrest Obama. Impeachment is on their minds and in the plan.
Mike, TM: Speaking of the Constitution, I would like it to be changed too. I want us to get the House back so that we can change the Constitution and have these old S.T.A.R.K men on term limits, and limit how many judges can be appointed by one president. Again, this country is pretty much screwed if B.A.P.F. S.T.A.R.K remains in power. Because you’re so right…there is nothing sacred to S.T.A.R.K. or the repubs for that matter.
Robert: Well said. Less lives lost because of drones. And less boots on the ground and bodies in bags.
Frank: Nice write. It’s rarely that I address someone who has tried or is trying to get into my panties, but since you are an old school chum, I couldn’t resist. What I don’t understand is why you don’t reveal your true self. You have quite a way with words, so I have a inkling of who you might be. But I promise to keep it a secret. I have a feeling it is not me you don’t want to reveal yourself to….and that perhaps it is the other school chums you prefer not know you’re reading my blog. I know I’m right considering your second comment, although I think you’re busted. So much for the “Frank” Moniker. :)
Oh…Frank, yes, you again: To whatever is NEVER going to happen again…Who said it ever happened.
Oh such fun…feels like old times.
Thomas: Not much more but a girl can keep HOPEing.
Eli: :) You are right about that – I’m off to see a client and then to catch some rays. But these days, as much as I love the sun, this girl’s enjoying it under a hat and some good cover.
Happy Thursday! Blog me.
Lastly, greed over a great story is surfacing from my “loyal”(?) readers. With all this back and forth about who owns what, that appears on my blog, let me reiterate that all material posted on my blog becomes the sole property of my blog. If you want to reserve any proprietary rights don’t post it to my blog. I will prominently display this caveat on my blog from now on to remind those who may have forgotten this notice.
Gratefully your blog host,
Aka BABE: We all know what this means by now :)
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