An excerpt from Bob Chapman's weekly publication.
This unbelievable gift to transnational corporations is at the heart of free trade, globalization, offshoring and outsourcing. Presently these corporations are sitting on $2.2 trillion in untaxed profits, which is costing the American taxpayer almost $800 billion in lost tax revenue if like in 2006 they are allowed to bring the funds back at 5-1/4% taxation. Those conglomerates want to bring those funds back into the US tax free, which means $1 trillion in lost taxes, taking advantage of the current financial situation in the US.
Five years ago Congress passed legislation allowing $350 billion to be returned to the US at 5-1/4% taxation, not the normal 35%, because these corporations said they would use the funds to create jobs. Very few jobs were created and a large part of the funds were used to purchase company stock, which rose in value, allowing the officers of these corporations to sell stock from options and make billions of dollars in profit for themselves. These are the same corporations that have been responsible for the loss of 11.7 million jobs, the loss of good paying jobs 450,000 American companies and the loss of hundreds of billions of dollars in tax revenue. These corporations are responsible for the heart of American manufacturing being ripped out of America. It over time has spread as well into service and professional industries.
There was a secret meeting on December 24, 2010 with the president in the White House where these pressured Congress and the White House to exempt overseas corporate profits from taxation. It is our opinion that a continuation of such a policy would deprive the US of badly needed taxation. A cessation of present policy would as well help to stem the flow of jobs out of the country. This change would stop the flow of businesses leaving the US and would cause some companies to return to the US.
This policy in place is known as territorial taxation. US companies would be taxed only by the country where the funds are earned. Currently, offshore, almost all these companies are headquartered in tax havens, such as the Cayman Islands, which have no corporate taxation. Presently they put off taxation indefinitely. This law is unbelievable abusive to the American people and should be repealed forcing these entities to return all funds to the US for taxation. That would totally fund stimulus 3.
The present administration is in the back pocket of these conglomerates and the present president is supposedly considering a limited version of such taxation. The plan is currently a secret. The multinationals want to delay any kind of legislation indefinitely. These companies are pushing for general tax reform that might not come for years. The current enabling group, also known as the Super Committee, or the Super Congress, won’t act on it until they have cut the budget deficit and butchered Social Security and Medicare.
Today we see a stampede of American corporations moving offshore to take advantage of current law. They hope that even if the system is changed that they will get a better tax deal than they have now. As you can see they could care less about being good American corporate citizens, or good fellow Americans. Not only do these malefactors avoid taxation, but also they are responsible for worsening unemployment. Allowing such a travesty to continue is certainly un-American and detrimental to the future of America.
In coming full circle on the issue it would be most easily be settled by having these transnational conglomerates pay the same taxes, as domestic corporations and to re-impose tariffs on goods and services, a system that worked for the US for 210 years and created a level playing field. What we have experienced is absurd and is a travesty that is destroying America as we have known it... full article