Skip to content

Of the corporations, by the corporations, for the corporations

Of the corporations, by the corporations, for the corporations

by digby

Dday has a great expose of Max Baucus and his idea of “tax reform” up at TNR today. Keep in mind that this is what’s going to be defined as the necessary GOP “concession” to offset Democratic cuts in Social Security in the upcoming budget battles:

The CEOs of the nation’s largest companies typically don’t have a reason to fly to Butte, Montana. But that’s where they are this week, a who’s who of corporate America, participating in the Montana Economic Development Summit, billed as an effort to “boost our state’s economy by finding Montana solutions for Montana jobs.” That may sound like a regional concern, but the non-Montana titans of industry in attendance include Google CEO Eric Schmidt; Facebook COO Sheryl Sandberg; Tesla Motors CEO Elon Musk; and many more, including executives from Ford, Boeing, Hewlett-Packard, ConocoPhillips, Oracle, FedEx and Delta Airlines. Sponsors of the event include even more behemoths, like Walmart, Pfizer, Pepsi, Microsoft, Nike, Lockheed Martin and dozens more.

How can a local Montana jobs summit attract the giants of American commerce, few of whom have any business interests in the state? Well, the convener of the event, Max Baucus, happens to chair the Senate Finance Committee, the key tax-writing panel in the upper chamber. And when he throws an event, nominally about “bringing jobs to Montana,” corporate America recognizes that this gives them another opportunity to dole out favors to the senator who wants to lead a massive rewriting of the nation’s tax laws, designed to lower corporate rates and allow companies to bring back money stashed overseas with impunity. In fact, every corporation associated with the Montana Economic Development Summit has a stake in the tax reform debate, and most have officially lobbied for favorable treatment. Considering the tens of billions that these companies stand to gain if they are successful, a couple days in Butte doesn’t sound like such a bad trade.
[…]
The event sponsors and keynote speakers represent almost the entire coalition pressuring Baucus for a corporate-friendly tax reform plan. Featured speaker Fred Smith runs FedEx, the delivery service, a company that paid an effective tax rate of 4.2 percent on $9.4 billion in total profits over the past five years, according to Citizens for Tax Justice. They sit on two coalitions that have led corporate lobbying efforts on tax reform—the Alliance for Competitive Taxation (ACT) and Reforming America’s Taxes Equitably (RATE). FedEx has spent $31 million on lobbying from 2011-2013.

Both ACT and RATE support a reduction in the corporate tax rate from 35 percent to 25 percent, which is supposed to be “paid for” by closures of loopholes. But the biggest loophole of all would be pried open with ACT’s plan for a “territorial” taxation system, exempting from taxation profits earned by U.S. multinationals overseas or simply booked offshore, and allowing corporations to repatriate offshore profits at a rate as low as single-digits. The Center on Budget and Policy Priorities believes such a system would create incentives for global corporations to move more of their operations overseas to avoid taxes, “hurting domestic businesses… and weakening the economy.”

Whatever comes of this is going to be touted as “tax reform” and “asking the corporations to pay a little bit more” in order to have the same “skin in the game” as millions of social security recipients, disabled citizens and veterans who will be living in poverty with no ability to make money to offset the cuts. Anyone who believes that hasn’t been paying attention to what’s happened with Dodd-Frank.

.

Published inUncategorized