Obama Tax Havens! – Demagoguery For International Business Illiterates
Tax havens! Greedy Wall Street bankers! Hedge fund money lenders! Speculators! Shameful profiteers! President Obama’s populist demagogic outcries against America’s 200-year history of free market capitalism seem limitless. My immigrant grandparents are undoubtedly turning over in their graves to hear such blasphemy from the mouth of the President of the United States.
Obama’s most recent target - those evil Caribbean tax havens. The current tax-deferral system is merely a ban-aid on a tax system that is openly hostile to American multinational companies. No other major industrial country treats its international business interests with such disdain and puts its companies at such a competitive disadvantage in the global economy. Then we wonder why we have such a large trade deficit.
A German firm doing business in Ireland, say, pays no German income tax on its Irish profits, but it does pay Ireland’s corporate income tax at its 12.5% rate. The U.S. company competing with that German business in Ireland, by contrast, pays Ireland the same 12.5% on its profits — and it then pays Uncle Sam up to 35%, minus a credit for what it paid the Irish. Just a reminder the combined U.S. (Federal-City-State) corporate tax rate of 39.25% is the second highest in the industrial world ranking a few .1% behind Japan. For those who skip the business press, Japan has been in an economic funk for the last several decades.
To help ameliorate this competitive problem Congress rather than fixing it outright created this cumbersome tax-deferral system whereby a company does not have to pay the U.S. corporate rate until it repatriates its earnings. The net effect is obvious, American companies invest their money oversees rather than bring it home and invest in America. No jobs are created, no factories are built, no research labs are started in America, but for the Obama type international business illiterates, they have shown those greedy corporate profiteers whose boss.
Obama is not proposing any real tax reform but rather a divide and conquer class war that he believes will help pay for his revolutionary social agenda. It’s a revenue grab pure and simple. The objective is to raise an additional $210 billion in tax revenues over the next 10 years and American global business interests and the workingman be dammed. One begins to wonder why any company would set up headquarters in such a hostile business venue? If we keep this up any company that has a choice, won’t.
The obvious solution to the tax repatriation problem is to do as most of the rest of the world does, and not add a surtax to overseas profits. This would immediately bring investment money and jobs home to America. Despite the soaring rhetoric Obama cares little for the workingman and woman, his eyes are set on the loftier goal revolutionizing the American social system.
Obama’s unambiguous goal is to reduce the incentives for American companies to compete internationally and stop shipping “American jobs overseas” especially to that bastion of evil Bangalore. Lest we forget, the great American iconic companies like IBM generate 60% of their revenue oversees. For those who have forgotten the lessons of the great depression, it was protectionist policies of this nature that caused a dramatic deterioration in our own economy as foreigners inevitably retaliated.
A Wall Street Journal editorial described Obama’s plan to limit tax deferral, limit allowable deductions and restrict eligibility for foreign-tax credits as “antigrowth, job-destroying, protectionist and unlikely to raise the projected revenues”. I will go further and state categorically that the business illiteracy of Obama will do irreparable harm to the U.S. economy and virtually eliminate the possibility of creating all those high paying private sector jobs we need to move America foreword.
Starry eyed elite journalism majors perpetuate the image of Saint Obama fighting the corrupt capitalists and hunger for the new social order where everybody has a high paying job, presumably working for the only employer left standing, the government.
In a world of social revolution international business ignorance is bliss.
I wish more people would read your articles. It’s rather unfortunate that our fellow countrymen have ignored common sense for the sake of worshiping this man [Obama].
It’s kind of ironic too that Obama and his lot are using tax policy to influence behavior yet have no clue that the behavior their generating is sending jobs and money overseas permanently. If I was a business man with say a call center in India I might just move there myself to avoid having to ever pay the US such a high portion.
Then again, there is another part of my brain which believes that Obama knows exactly what he is doing and thus purposely trying to destroy our economy as a means to usher in the new world order. I believe it’s probable that he is a puppet to the banking elite that really control all world finances.
May 10th, 2009 at 8:23 am
Just found your blog. You have a keen insight and I wish more had an understanding of this, but alas, our meddling with the educational system and parenting in the past 50 years have destroyed generations.
May 14th, 2009 at 10:42 am
Wow. The more I read, the better it gets. God bless America. Your take against Obama is a riot! It’s like you actually believe what you’re writing.
It’s really good stuff. Funny too.
I gotta tell ya — if you’re still using offshore tax ‘havens’ you need to regroup. That’s been going down hill for a long time. I burned them over ten years ago when the cons were selling subscriptions. When the ’sovereign individual’ became mantra. Tax treaties exist everywhere now.
And for good reason. Our (United States) effective tax rate has been quite low. As a fifty year capitalist I can assure you that paying taxes is not a problem for me. I want what the taxes provide.
May 17th, 2009 at 2:06 am
What corporate tax rates are you looking at.? We have the 2nd highest rate in the world. What corp did you own that didn’t pass your tax expense on to the consumer.The only entity that doesn’t pass them on and is still in busuness is the federal government. They just keep printing more money.No tax havens??? Then where are all the corps going overseas and avoiding the U.S. A. taxes that the Pres keeps railing against?
July 4th, 2009 at 10:21 am
There always seems to be a Kool-Aid drinker in the bunch. A person who doesn’t actually look at the tax rates but still insists that Obama has lowered taxes.
According to Jon Stossel of ABC news the only companies in the private sector that are able to hire new workers right now are companies that have outsourced at least part of their business off-shore. Please can someone explain to me how you help the wage earner by attacking, demonizing, burdening and taxing the wage payer? Punitive policies against our own businesses will make them leave, jobs leave with them. This is not complicated stuff.
July 5th, 2009 at 7:01 am
Still no answer? How is it again that you help the wage earner by taxing attacking demonizing and burdening the wage payer?
July 24th, 2009 at 9:39 pm
Mark, I just found this blog site and was reading all the comments on the “Tax haven” article. The Kool-Aid drinker will not respond to you because you hit him/her with the cold hard facts. There isn’t much to do but basically shut up when faces with the truth. great rebuttal, keep watching for more Kool-Aid drinkers.
August 10th, 2009 at 5:11 pm
The facts always have a conservative bias.
August 31st, 2009 at 8:47 am