The Rabid Independent, Nonpartisan solutions, independent policy ideas

The latest trend in reducing one’s corporate tax rate is to buy a foreign company so you can move a revenue stream to a foreign/lower tax location. Frankly it’s no more egregious than all the other clever tactics employed over the last 20 years (A few examples). All these efforts have succeeded so well that the effective corporate tax rate has plummeted:

US coprporate tax ratesGoogle currently pays a tax rate of 2.4%. Apple pays 8.2%. IBM- 5.8%  JP Morgan – 14% GE – 2%

Obama has decided that everything up to now has been OK but Tax Inversion is one step over the line. Why? Isn’t it worse to move work offshore than to manipulate the system to get a lower tax rate? If most of the shareholders are American there will be a benefit from these lower tax rates since the stock price will be higher or the stock buyback program will be larger. On the other hand, the loss of workers means far less government revenue from the taxes they would have paid and far higher expenditures on unemployment insurance, food-stamps and Medicare.

Mark Cuban has drawn the line, siding with Obama, -tweeting that he won’t buy stock in a company that engages in Tax Inversion. Someone needs to tell these guys that corporate taxes are of dubious value and even if this latest trick is shut down, there are still plenty of ways to get around the US tax code. There’s an industry full of highly paid experts solely devoted to finding loopholes. The US Congress will always lose against these guys.

My question for Cuban and Obama is: Why is it un-American to finagle your way into a lower tax rate and perfectly patriotic to hire only foreigners to make/import your products? In fact Congress voted to make any costs associated with transferring equipment to foreign locations for the purpose of “offshoring” tax deductible!

The problem isn’t tax inversion, it’s priority inversion.

 

traitors

An 1865 cartoon depicting the devil with his two favorites – Benedict Arnold and Jeffery Davis

 The devil would now also welcome members of the US Chamber of Commerce

 

I’ve written about how the west has traditionally had a problem selling anything to the Chinese. Either they are too broke to afford western goods or their tastes just aren’t the same as ours. That’s why when the British discovered their taste for Opium they went to war to insure that the “market” stayed open. [...]

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What does the US have in common with Jordan?:

We have no border wall that keeps out refugees and illegal immigrants. We have no intention of deporting all the illegal immigrants who are already here (or who recently arrived). Any life inside our borders is better than the life offered in their home country.

Refugee [...]

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OK, first I have to establish the premise: Is the Fed obsessed with the stock market? It seems to be a fairly well accepted position by Fed followers that the thing the Fed most fears is another stock market meltdown. Like any fallible human it is most afraid of the thing that just happened – a meaningful [...]

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If you get involved in a foreign “civil war” by taking a side you invariably run into two problems:

Your good guys aren’t really so good or at least they may start that way but after they get some American cash they start to behave no differently than the bad guys. The bad guys can’t survive [...]

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Let’s say we all agree that President Nouri al-Maliki of Iraq is an evil partisan bastard who could care less about the Sunni minority. In a normal functioning democracy that might enrage the Sunnis (and Kurds) to demonstrate and call for new elections. They might even challenge some decisions in court to appeal to the fairer [...]

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After the secular Soviet Union crashed, every component of the empire was left to sort itself out without the macro totalitarian overlay. Old tribal divisions came back to life like Dracula rising from a grave (Yugolslav civil wars). When a revolution or an invasion removes a dictator, the country inevitably becomes fertile ground for tribal [...]

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Corruption is a constant problem that seems to derail certain components of our economy. It also fosters government distrust. Municipalities like Detroit and Newark seem to be stuck in neutral, unable to bounce back no matter what else is happening in nearby environs. The VA seems to have no idea how to go about its [...]

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The Democratic party has become the entity that seeks to be the savior of the working man. It wants to:

raise the minimum wage to elevate the working poor; increase pollution controls to improve the quality of the air and water that the average resident ingests (Obama enacts new EPA standards) [...]

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The French Open is on, so I am inspired to draw an obtuse parallel. On the men’s side we have a core of exceptional talent that elevates the entire game. Djokovic is undoubtedly a better player because he has to beat Nadal on clay and Federer/Murray on grass. The women’s side of the game is [...]

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Irritations

Here’s my list of things that bug me. Some are big and some are petty. Feel free to offer new additions.

Irritations

Mottos, Creeds, Rules

As we search for legitimate solutions to America’s problems everyone must obey these rules or we’ll never get anything done.

Mottos, Creeds and Rules

Reading List