Obama Weekly Address: Companies Which Flee High Taxes Are Un-patriotic
Another Saturday, more populism attacks. Interestingly, he does suggest a Good Idea amongst his populist rhetoric
In this week’s address, the President continued his call for our nation to rally around an economic patriotism that says rather than protecting wasteful tax loopholes for a few at the top, we should be investing in things like education and job training that grow the economy for everybody. The President highlighted the need to close one of the most unfair tax loopholes that allows companies to avoid paying taxes here at home by shifting their residence for tax purposes out of the country. The President has put forth a budget that does just that, and he has called for business tax reform that makes investment in the United States attractive, and creates incentives for companies to invest and create jobs here at home. And while he will continue to make the case for tax reform, the President is calling on Congress to take action and close this loophole now.
Wait, he put forth a budget that includes this? Would that be the budget that Harry Reid (D-Nevada), Majority Leader of the Democrat controlled Senate refused to even bring to the floor for a vote? And that all but 2 Democrats rejected in a House vote, which was called a stunt by Democrats? And was submitted late, yet again?
But there’s another trend that threatens to undermine the progress you’ve helped make. Even as corporate profits are as high as ever, a small but growing group of big corporations are fleeing the country to get out of paying taxes. They’re keeping most of their business inside the United States, but they’re basically renouncing their citizenship and declaring that they’re based somewhere else, just to avoid paying their fair share.
Says the guy who takes advantage of every tax loophole, to use his own words, to avoid paying his full rate.
I want to be clear: this is only a few big corporations so far. The vast majority of American businesses pay their taxes right here in the United States. But when some companies cherrypick their taxes, it damages the country’s finances. It adds to the deficit. It makes it harder to invest in the things that will keep America strong, and it sticks you with the tab for what they stash offshore. Right now, a loophole in our tax laws makes this totally legal — and I think that’s totally wrong. You don’t get to pick which rules you play by, or which tax rate you pay, and neither should these companies.
There is so much in that statement to fisk I’m not sure where to start. He’s possibly the last person in the country to discuss adding to the deficit. His investments have often been monumental failures.
And then there’s the part about getting to pick the rules you play by…oh, wait, he means Other People can’t pick, because Obama sure does this on a constant basis, even changing the rules which have no latitude within them.
The best way to level the playing field is through tax reform that lowers the corporate tax rate, closes wasteful loopholes, and simplifies the tax code for everybody. But stopping companies from renouncing their citizenship just to get out of paying their fair share of taxes is something that cannot wait. That’s why, in my budget earlier this year, I proposed closing this unpatriotic tax loophole for good. Democrats in Congress have advanced proposals that would do the same thing. A couple Republicans have indicated they want to address this too, and I hope more join us.
The first sentence is fantastic. This is something Republicans have been trying to do for quite some time. Unfortunately, every piece of legislation the Republican led House has passed along these lines has featured a majority of Democrats voting against it, and, in a few cases, has featured a veto threat from Obama. And none of them ever get taken up by the Democrat Senate.
I’ve yet to see a proposal by Congressional Democrats, nor can I find one on the web. Republicans have advanced several, so this “a couple Republicans” thing is just more Obama nastiness, but, should we expect different from him? Well, we should, of course, but then reality intrudes.
There is a problem, though, when discussing dealing with the “corporate tax inversions”, as The Economist points out
The real solution is to lower the corporate rate, eliminate tax breaks and move America from a worldwide system to a territorial one. Barack Obama has proposed a reform that cuts the rate to 28% but keeps the worldwide reach. Dave Camp, a Republican congressman, has plumped for 25%, the OECD average, and a shift to a territorial system, instead.
It should be possible to bridge the differences. But both sides have tied the subject to other issues. Mr Obama insists that corporate-tax reform must also raise more money to spend on things like public infrastructure, which the Republicans oppose; they, in turn, want to package it with cuts in personal tax rates, which Mr Obama is loth to accept. Thus, nothing happens.
Sadly, that’s the way Washington works, trying to package other things with the main thing. That’s how we ended up with student loans “reform” in Obamacare. Even if both drop the other stuff, they still have to deal with the rates and reach. And then deal with recalcitrant Senate Democrats.