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Entries tagged "tax holiday"

The Dirt on Fix the Debt's Advocacy of a Territorial Tax System

June 17, 2013 ·

On June 12, 2013, the Institute for Policy Studies released the sixth in a series of reports on the Fix the Debt corporate lobby group. This newest report, Corporate Pirates of the Caribbean, uses Fix the Debt members’ SEC filings to calculate how much they would stand to gain from a shift to a territorial tax system. Such a reform would permanently exempt U.S. corporations’ foreign earnings from U.S. income taxes.

In response to this IPS report, Fix the Debt issued a press release denying that they have ever taken a position on this controversial tax reform and spokeswoman Maya MacGuineas described the report as “lies and mudslinging.”

These attacks on our research conflict with clear statements in support of a territorial tax system, both by Fix the Debt directly and by numerous Fix the Debt leaders.

As we pointed out in our first report, published in November 2012, Fix the Debt expressed unambiguous support for a territorial tax system in a PowerPoint on their web site (see slide 11). The PowerPoint was described as a “CEO Tool” to help business leaders recruit others to join Fix the Debt. This IPS report, The CEO Campaign to “Fix” the Debt: A Trojan Horse for Massive Corporate Tax Breaks, received significant coverage in the mainstream and alternative press.

More than six months later, with this same PowerPoint still on their web site, Fix the Debt is claiming they have never had a position on a territorial tax system. And even though we reprinted the slide in our new report, Fix the Debt spokespeople did not address this obvious inconsistency.

Support for territorial tax reform is a core plank of the fiscal reform plan articulated by Fix the Debt Co-Chairs Erskine Bowles and Alan Simpson. In April 2013, Fix the Debt prominently featured Bowles-Simpson 2.0 on their website. In their piece applauding the new Simpson-Bowles plan, Fix the Debt includes “move toward a territorial system” as one of five key components of the plan.

Our plan puts in place a process for comprehensive tax reform to eliminate or scale back tax expenditures in order to generate nearly $600 billion in revenues for deficit reduction substantially reducing marginal tax rates for individuals, corporations and small business, and moving toward a competitive territorial system while maintaining the progressivity of the tax code.

Excerpted from A Bi-Partisan Path Forward to Securing America’s Future, (aka Bowles-Simpson 2.0) Moment of Truth Project; April 2013, p 7.

Other prominent Fix the Debt leaders have also been vocal in their support of a territorial tax system for corporations:

“We shouldn’t be imperiling U.S. companies to be competitive with our foreign competitors by putting in a tax policy that puts them at a disadvantage. So, I’m very much in favor of a territorial system and that’s what we advocated in Simpson-Bowles."
- David Cote, CEO of Honeywell, CEO Fix the Debt Steering Committee member and Member of the Simpson-Bowles Deficit Reduction Commission, Bloomberg Street Sense, August 27, 2012

The U.S. needs to "allow this territorial system [excusing repatriated profits from being subject to domestic taxes] so that companies can repatriate their earning back to the United States."
- Jeffrey Immelt, CEO of General Electric, Fix the Debt CEO Steering Committee member, exclusive interview with CNN, October 4, 2012

We need comprehensive business tax reform that will lower tax rates and provide certainty for all businesses. We also need to move to a competitive territorial tax system in line with other major industrialized nations.”
- Doug Oberhelman, CEO of Caterpillar, Fix the Debt CEO Steering Committee (with Mary Andringa), op-ed in Roll Call, June 6, 2012

“Tax policy: I think the President's put out some really good suggestions, but we've got to get to the territorial tax.”
- Andrew Liveris, Chairman Dow Chemical, Fix the Debt CEO Steering Committee member, Kudlow Report, CNBC, April 19, 2012

One of the things that's always bothered me is that we don't have a territorial tax system.”
- Paul Jacobs, CEO of Qualcomm, Fix the Debt CEO Steering Committee member, USA Today, May 20, 2013

The Fix the Debt campaign appears to be facing a dilemma.

On the one hand, they seem to be trying to recruit and maintain CEO supporters by creating a platform for promoting policies that would primarily benefit large corporations. On the other hand, they are trying to build broad public support through slick PR gimmicks emphasizing a message of shared sacrifice.

Rather than attacking IPS research, they may want to focus on resolving these inconsistencies.

WIN America Coalition Seeks to Pad Pockets with "Tax Holiday"

October 11, 2011 ·

Businesspeople WinAt a moment in U.S. history when the public and members of Congress are searching for new revenue streams that could be invested in ways that help create jobs in this country, a coalition of firms has launched a campaign for a massive tax holiday on overseas corporate profits. The WIN America campaign was formed earlier this year to aggressively lobby for a second tax holiday on repatriated offshore funds.

Last week WIN America succeeded in getting members of the Senate to introduce a bill that would grant a tax holiday on offshore profits.

In 2004, Congress gave them a tax holiday that allowed 843 companies to reduce their tax rate from 35 percent to 5.25 percent on $312 billion in offshore profits.

What did Americans get in return? Last week, our organization, the progressive Institute for Policy Studies, released a report showing that 58 companies that received 70 percent of the tax windfalls didn't boost employment. In fact, they actually destroyed a total of nearly 600,000 jobs.

WIN America has invested $50 million in lobbying Congress for hundreds of billions of dollars of tax breaks that would flow from a tax holiday. They have hired 42 former congressional staffers who worked for the House Ways and Means Committee or the Senate Finance Committee, the two legislative bodies that write the nation’s tax rules. WIN America is made up of 18 publicly traded corporations and 24 trade associations, including the U.S. Chamber of Commerce.

Fifteen of the eighteen corporations leading the charge for a massive tax holiday on offshore funds under the moniker “WIN America” repatriated a total of $55 billion after the 2004 tax holiday. Among WIN America’s supporters, only one, Brocade Communications, has not announced job cuts since then. One additional firm, Devon Energy, had only minimal layoffs related to an office closing.

The supposedly "one-time" tax holiday in 2004 didn't curb these corporations from continuing to squirrel profits away in overseas tax havens. The offshoring of capital has soared at the 18 WIN America corporations. Collectively they had $54 billion in offshore funds following the 2004 repatriation; today they have $205 billion, a whopping 279 percent increase.

Collectively these 18 corporations stand to save an estimated $61 billion if they pay a tax rate of 5.25 percent, rather than the 35 percent they would otherwise owe.

WIN America Coalition Member Companies

WIN America member, ranked by change in global employment

Amount repatriated, 2004-2005 ($millions)

Offshore funds, 2010 ($millions)

Change in global employment, 2004-2010 (from 10-K)

Change in U.S. workforce, 2004-2010

Announced layoffs, 2004-2011

Pfizer

40,100

48,200

-51,826

n/a

58,071

Eastman Kodak

580

2,398

-36,000

-19,600

19,600

Duke Energy

500

1,200

-10,335

n/a

expected

Brown-Forman

277

390

-2,200

n/a

250

CA Technologies

584

685

-1,900

-800

1,000

Cadence

500

133

-300

n/a

225

Loews

0

598

-200

n/a

449

Devon Energy

545

4,300

925

n/a

50

Brocade

78

338

3,491

n/a

0

Broadcom

0

1,711

5,577

n/a

200

Adobe

500

1,900

5,975

n/a

1,280

Qualcomm

500

10,600

8,200

n/a

some

Google

0

17,500

21,379

n/a

300

Cisco Systems

1,200

36,700

25,760

26,300

6,500

EMC

3,000

5,100

25,800

n/a

2,400

Microsoft

780

44,800

29,000

15,000

5,800

Oracle

5,100

16,100

29,128

-6,544

6,500

Apple

755

12,300

31,800

n/a

1,600

Total

54,999

204,953

84,274

 

104,225

 

Take Action. Tell your member of Congress that you oppose giving these corporations another "Tax Holliday."

From Arab Spring to Wisconsin to Wall Street to October 12

October 6, 2011 ·

Today, the occupation of Wall Street spreads to Washington, where it's gaining momentum. These occupations are focusing the nation's attention on confronting the giant corporations that have grabbed too much economic and political power after decades of deregulation, subsidies, tax avoidance, and bailouts. In cities across the country, other occupations are beginning with the message that we must shift from a speculative Wall Street economy to a green Main Street economy and address extreme wealth inequality.

The roots of this new social movement reach deep into the soil of Egypt and Wisconsin, where hundreds of thousands of people made the statement with their bodies that they would be present until governments that were oppressing their basic rights were changed. Occupy Wall Street and Occupy DC are aiming their sights on both a rapacious Wall Street and a corrupt Washington. They are demanding that jobs come before cuts, and that Wall Street, corporations, and the wealthy pay for those jobs.

This week, IPSers Chuck Collins and Sarah Anderson joined courageous lawmakers Bernie Sanders and Barbara Lee to release a new study on tax dodging corporations at the "Take Back the American Dream" conference hosted by our board member, Robert Borosage. Our "America Loses" study exposes 58 "built-to-loot" firms that reaped billions from a 2004 "tax holiday" and then proceeded to slash nearly 600,000 jobs. Many of these corporate giants are now lobbying for another "tax holiday." We urge you to add your voice to those saying no.

And as we say no to Wall Street, we say yes to honoring today's heroes. We invite you to join us Wednesday, October 12 at the National Press Club for the 35th annual Letelier-Moffitt Human Rights awards reception and ceremony as we pay tribute to the leaders of the progressive Wisconsin struggle and a valiant Mexican group that protects the rights of migrants. Don't miss out on one of DC's must-attend events for progressives. Buy your tickets today.

Please join the youth-led movements on the streets and donate to help the Institute's efforts to do the work that provides the facts, figures, and analysis that will help these movements win.

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