"Tax Havens"

Report: Over 8 in 10 corporations have tax havens

http://apnews.myway.com/article/20090116/D95OHIB80.html

"WASHINGTON (AP) - Eighty-three of the nation's 100 largest corporations, including Citigroup, Bank of America and News Corp., had subsidiaries in offshore tax havens in 2007, and some of the companies received federal bailout funding, a government watchdog said Friday.

"Sens. Carl Levin, D-Mich., and Byron Dorgan, D-N.D., who requested the report, have pushed for tougher laws to fight offshore tax havens around the globe. Levin, who leads the Senate Permanent Subcommittee on Investigations, has estimated abusive tax havens and offshore accounts cost the U.S. government at least $100 billion a year in lost taxes.

""I think we should take action to shut down these tax dodgers and we will be introducing legislation to do just that," Dorgan said."

Doesn't make much sense to me to 'shut down these tax dodgers' right after you've given them $700B. But then, I'm not a senator. Maybe I don't understand how these things work.

"The GAO said the subsidiaries could be established in the countries "for a variety of nontax business reasons" and said having a business unit in one of the countries "does not signify that a corporation or federal contractor established that subsidiary for the purpose of reducing its tax burden.""

But the oracular Dorgan and Levin know, because they are oh so more wise. But of course they knew before they both enthusiastically supported the $700B giveaway to the corporations to prop them up before they shut them down. Certainly, the greatest deliberative body in the history of the world is Delphic.

Are they surprised that corporate governors look for ways to increase their business around the world or that they take advantage of opportunities to reduce their tax burden - that is they seek to reduce their overall cost of doing business. Isn't that why we all want them to decrease their executive salaries - so they can lower their overhead costs?

"Several major corporations have announced plans to leave Bermuda, a leading offshore business center, amid the global financial crisis and fears of tighter tax rules. Tyco Electronics Ltd., which makes electronic components, and Foster Wheeler Ltd., an engineering and construction company, are reincorporating in Switzerland - which has a tax treaty with the U.S. - for tax and other reasons. Covidien Ltd., a health care products company, is heading to Ireland."

Admittedly, I'm not of the same intellectual power as Senators Dorgan and Levin, but it seems to me that if they LOWERED the corporate tax rate to one competitive with Ireland, Luxembourg and Switzerland they might recoup the greater part - or more - of the $100B they think they aren't collecting now. But they really aren't that bright. We all know they will try to INCREASE corporate taxes, add penalties for earnings made overseas, make accounting more burdensome and drive more corporations farther overseas.