Washington, D.C.: Bailout Briefing #5: Death, Taxes and TARP
WASHINGTON, May 5 – "In this world nothing can be said to be certain, except death and taxes." So wrote Benjamin Franklin.
If
he were here today, Franklin might be surprised to see how some of the
largest federal bailout recipients are coming dangerously close to
disproving his adage. They are defying insolvency and avoiding taxes,
at the same time and on the taxpayer’s dime.
On Monday,
President Barack Obama announced his proposal to close corporate
loopholes and reform our tax system so that it no longer rewards
businesses which move their operations offshore.
On Tax Day (April 15), U.S. PIRG released Tax
Shell Game,
a report, a report that focuses on U.S. corporations who shift their
profits to offshore tax havens to avoid taxes. We cited statistics from
the General Accounting Office which documents how nearly 19,000
companies share one storefront in the Cayman Islands.
Tax
Shell Game
also notes that the top 100 publicly traded corporations utilize tax
havens to house subsidiaries and lays out the burden put on taxpayers
in each state by the $100 billion in tax revenues. These companies
enjoy access to the U.S. marketplace, technology and workforce. As the
world’s largest market, the United States government has unparalleled
ability to set the rules and make sure the playing field is level.
Some
of the biggest corporate tax dodgers are also the largest recipients of
taxpayer bailout dollars, including Citigroup, Bank of America and
Morgan Stanley. These same companies are now hiring lobbyists to
convince Congress not to make them pay their fair share of taxes.
The
idea behind TARP and other bailout programs was to help U.S. financial
institutions get back on their feet and into business.
But there’s a difference between staving off the undertaker and enabling companies avoid paying their fair share of taxes.
