Taxing offshore money? Good luck with that!

[luzribeiro.livejournal.com]

So, seems like Obama is [depending on who you ask], A) making some bold moves to close some gaps in the budget and do something meaningful about the crumbling US infrastructure, and/or B) stomping on the Constitution of this great nation yet again, in a bid to pry the Worst Commie President title from Carter's hands:

White House proposes new foreign profits tax

"On Monday, President Barack Obama will use his budget plan to propose spending $478 billion on America's roads, bridges and mass transit systems, with half of that steep bill financed by new taxes on U.S. corporate profits that are squirreled away overseas, White House officials said."

But then, there's a catch, of course:

"Still, the White House tax proposal aimed at foreign profits for U.S. companies is far more ambitious than what GOP lawmakers, now in control of Congress, are likely to approve."

Ha! Like this baby will ever be passed, eh? Looks like Obama has hit the presidential end-game strategy: push for legislation you're certain will never go through, but since your two terms are nearly up, you couldn't give a rat's ass anymore. Afaik Clinton pulled quite a few of those at the end of his presidency too, only for them to be overturned by Bush. Not sure what Bush did in that regard. I vaguely recall him doing something similar with a bill or two, bit I can't be sure. Will need to check.

...Though I'm almost certain that if you look at any president who served two terms post FDR and not named Nixon, you'd find something similar.

Anyway. From a first sight, the whole thing might sound like a reasonable idea - at least to a leftie. After all, billions of dollars get leaked out of the US economy every year through the well-known offshore scheme - that doesn't seem very "American" now, does it. But sure, by the time the actual law gets written, it will be full of so many loopholes, whether intentional or not (I'm betting on the former), that for a large corporation with a sophisticated tax department it won't make any difference anyway. And by the time the law approaches anywhere near the stage of being discussed by a legislature, it will have so many other unrelated spending items attached to it that it would by far outweigh the expected tax income.

Conversely, to a conserva-guy, I'm sure if there ever was the perfect occasion to fuckin' IMPEACH the Kenyan bastard, then this must be it. Am I close?

To the more neutral outside observers like yours-truly, this whole thing looks more like a case of grandstanding about something Obama knows full well isn't going to happen either in this or in a few neighboring parallel universes. In any case, I say good luck with that undertaking, Obama. You must've realized a long time ago that there are big-money interests on BOTH sides of what looks like the partisan divide (but in reality, isn't), who won't tolerate that sort of shit even for a minute. I'm sure as usual the corporations will continue to have a good laugh at the US taxpayers' expense for a long time to come.

Comments

[luvdovz.livejournal.com]

He may be trying to give the Dems a position for grandstanding in the upcoming elections. Then they'll be able to claim they "tried" to do something meaningful for "the people" but the Reps didn't let them.

In other words, he's playing for the team now. Although I'm not sure that team deserves the effort, since they all did their best to pretend they didn't have anything to do with him on the last midterms.

[stewstewstewdio.livejournal.com]

He may be trying to give the Dems a position for grandstanding in the upcoming elections

It actually goes a little beyond that. He is doing stuff now that is going put Republicans on the record for being anti-middle class, catering to big business and against revenue that isn't done by taxing the 99%'ers (or Romney's 47%'ers).

[luvdovz.livejournal.com]

Like that'd be the first time they've come across that way.

[stewstewstewdio.livejournal.com]

American politics in a nutshell:

[htpcl.livejournal.com]

I suppose he just wants to give the public something to blabber about between election cycles.

[telemann.livejournal.com]

Yeah, with the Republican majority opposition he faces in Congress, Obama should just lay low, keep quiet and not do anything until he leaves office. Good luck with that!

[luzribeiro.livejournal.com]

Nah. He should totally announce a manned space program to Neptune, declare war on China, and officially make Friday part of the non-working weekend. After all, what's to stop him? Whoopsie!

[telemann.livejournal.com]

OH absolutely! Now that's a solution! *nods* And Obama should stick Whoopie cushions on all the cabinet members' seats for their weekly meeting. LULZ!!!1

[luzribeiro.livejournal.com]

We do everything For The Lulz!

[telemann.livejournal.com]

Oh absolutely!

[luzribeiro.livejournal.com]

[ddstory.livejournal.com]

make Friday part of the non-working weekend

I could tolerate that, you know.

[htpcl.livejournal.com]

It's not that not staying low would make a difference.

[telemann.livejournal.com]

Maybe. Maybe not.

[htpcl.livejournal.com]

Yeah that seems to seal the issue.

[telemann.livejournal.com]

We'll see, but it is going to be a very contentious two years; and first up will be the Keystone pipeline with a pending presidential veto.

[htpcl.livejournal.com]

Why is he vetoing it at all? Aren't there already other pipelines to Canada?

[mahnmut.livejournal.com]

While the idea is not bad per se, I'm curious to learn more detail about how exactly he intends to track which company owes how much tax. Could someone better-versed in these things enlighten me on this? Isn't the whole point of tax havens to conceal income?

[mikeyxw.livejournal.com]

The money isn't really hidden, that would fit under the current tax fraud laws. The money is simply kept overseas on the balance sheets of the subsidiaries. They pay whatever foreign tax rate. If this income didn't show up, the upper management of the companies wouldn't be able to show off their profitable international subsidiaries and collect their obscene bonuses. The issue isn't that the money isn't declared, rather that if a US company makes money overseas, it is not taxed until it is repatriated back to the US... something that companies delay as long as possible. This is what is referred to as the loophole in the law. There are some other "loopholes", such as allowing a company to deduct their investments overseas that are also unlikely to close and might take up the slack if this law goes into effect.

Also, it's worth noting that the rate will be 14% up front and 19% going forward, much less than the current 35% corporate tax rate but much higher than what foreign governments charge their corporations for overseas profits (which is 0% in almost every case). This looks like a rehash of the "tax amnesties" from the past where money can be repatriated at a lower rate for a one time boost. This has been done in the past with promises that the money would be invested to create US jobs, really, it was used to pay shareholders or fund takeovers. Of course, 14% or 19% of something is better than 0%, so this actually seems like a pretty reasonable attempt at generating some income. Companies are also able to take whatever they pay in foreign corporate taxes off the top, so the rate seems to be aimed at being just a enough over Ireland (10% - 12.5%) and Singapore (8.5% - 17%) to make it worthwhile for the companies involved while also collecting a bit of money that would otherwise have gone uncollected.

[airiefairie.livejournal.com]

In a way reminds me of one Syriza's first innovative policies: remove the all-inclusive resorts (http://www.nytimes.com/2015/01/21/business/international/greeces-tourism-industry-unsettled-by-talk-in-election-campaign.html). Because, you know, that would totally stimulate the tourism industry.

[luzribeiro.livejournal.com]

And the subsequent backpedaling on that promise (http://www.reuters.com/article/2015/01/29/greece-politics-tourism-idUSL6N0V868S20150129). Presumably, one of many more to come.

[dexeron.livejournal.com]

There's always a sort of freedom that comes with being the so-called "lame duck," even though that term really wouldn't apply to Obama until after November of next year. I think he's willing to take advantage of it, though. Is he being baldly politically opportunistic? Did he only just now realize that the Republicans simply will not play ball? Did the mid-term elections make him realize that compromise will never happen, so he's just going to do what he wants regardless? Who knows. "Better late than never," is what I say.

Whether his proposals will ever pass the legislature... eh. Good luck? Yeah, I'm not sure such a bill would stand the proverbial whelk's chance in a supernova.


---

"You must've realized a long time ago that there are big-money interests on BOTH sides of what looks like the partisan divide (but in reality, isn't), who won't tolerate that sort of shit even for a minute."

This is true, to an extent, but I always have to qualify such statements because over here such a realization often translates into a sort of "both sides are the same" malaise that leads to voter apathy, and I feel like I have to counteract that for any fellow USA-ians who might get disillusioned. ;)

Iin reality those similarities (Republicans give big business 100% of what it wants, Democrats give 90%) break down when it comes to non-monied matters: specifically matters of equality and social justice. As Ed Brayton (a blogger I follow) noted:

"If Democrats had been in charge of the House and state legislatures since 2010 instead of Republicans, we wouldn’t have mandatory ultrasound laws and abortion clinics shutting down all over the country. We wouldn’t have laws banning same-sex marriage and bills to pass the Federal Marriage Amendment to ban it at the federal level. With fewer Republican appointees to the Supreme Court, we wouldn’t have decisions like Hobby Lobby or Citizens United. We wouldn’t have people in charge of science committees who say things like, ‘Global warming is a hoax because God said he wouldn’t destroy the earth again after the flood.’"

So while it's a shame that the Democrats are still so in bed with business, I think it's merely an unfortunate requirement these days to even play the game. If it means we get progress on those other fronts, I'll take it, while working to make things better on that other end. The game can be reformed. That's no reason, in the meantime, to stop making progress on other issues, or so I always try to say to my fellow voters come election time. :)

[tcpip.livejournal.com]

> Not sure what Bush did in that regard.

No strings attached bailouts, if I remember correctly.

[luzribeiro.livejournal.com]

And he proudly owns them (http://www.washingtonpost.com/blogs/in-the-loop/post/george-w-bush-auto-bailout-was-mine/2012/02/13/gIQA6oDPBR_blog.html)!

Because, you know, those helped the economy come around!

[tcpip.livejournal.com]

Both Bush and Romney have somehow managed to get the principle of bailouts wrong. You don't just give out money and you don't just let companies collapse. You run a bailout with strings attached and plenty of them.