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A choice for corporate America: Are you with America or the Cayman Islands


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#1 TEO

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Posted 18 February 2013 - 07:25 PM

By Sen. Bernie Sanders
 

Monday February 18, 2013

 

When the greed, recklessness, and illegal behavior on Wall Street drove this country into the worst recession since the 1930s, the largest financial institutions in the United States took every advantage of being American. They just loved their country and Americans' willingness to provide them with the largest bailout in history. In 2008, Congress approved a $700 billion gift to Wall Street. Another $16 trillion came from the Federal Reserve. America. What a great country.

 

Just two years later, as soon as these giant financial institutions started making record-breaking profits again, they suddenly lost their love for their native country. At a time of mounting deficits, largely created by the recession that Wall Street caused, the major financial institutions did everything they could to avoid paying American taxes by establishing shell corporations in the Cayman Islands and other tax havens.

 

In 2010, Bank of America set up more than 200 subsidiaries in the Cayman Islands (which has a corporate tax rate of 0.0 percent) to avoid paying U.S. taxes. It worked. Not only did Bank of America pay nothing in federal income taxes, but it received a rebate from the IRS worth $1.9 billion that year. They are not alone. That same year, JP Morgan Chase operated 83 subsidiaries incorporated in offshore tax havens to avoid paying some $4.9 billion in U.S. taxes. Goldman Sachs operated 39 subsidiaries in offshore tax havens to avoid an estimated $3.3 billion in U.S. taxes. Citigroup has paid no federal income taxes for the last four years after receiving a total of $2.5 trillion in financial assistance from the Federal Reserve during the financial crisis. On and on it goes.Wall Street banks and large companies love America when they need corporate welfare. But when it comes to paying American taxes or American wages, they want nothing to do with this country. That has got to change.

 

Offshore tax abuse is not just limited to Wall Street. Each and every year corporations and the wealthy are avoiding more than $100 billion in U.S. taxes by sheltering their income offshore. Pharmaceutical companies like Eli Lilly and Pfizer have fought to make it illegal for the American people to buy cheaper prescription drugs from Canada and Europe. During tax season, however, they shift drug patents and profits to the Netherlands and other offshore tax havens to avoid paying U.S. taxes.

 

Apple wants all of the advantages of being an American company, but it doesn't want to pay American taxes or American wages. It creates the iPad, iPhone, iPod, and iTunes in the United States, but manufactures most of its products in China so it doesn't have to pay American wages. Then it shifts most of its profits to Ireland, Luxembourg, the British Virgin Islands and other tax havens to avoid paying U.S. taxes. Without such maneuvers, Apple's federal tax bill in the United States would have been $2.4 billion higher in 2011.

Offshore tax schemes have become so absurd that one five-story office building in the Cayman Islands is now the "home" to more than 18,000 corporations.

 

This tax avoidance does not just reduce the revenue that we need to pay for education, health care, roads, and environmental protection, it also is costing us millions of American jobs. Today, companies are using these same tax schemes to lower their tax bills by shipping American jobs and factories abroad. More than 5 million U.S. manufacturing jobs were lost and more than 56,000 factories were shuttered since 2000. That also has got to change.

 

At a time when we have a $16.5 trillion national debt; at a time when roughly one-quarter of the largest corporations in America are paying no federal income taxes; and at a time when corporate profits are at an all-time high; it is past time for Wall Street and corporate America to pay their fair share.

 

That's what the Corporate Tax Dodging Prevention Act (S.250) that I have introduced with Rep. Jan Schakowsky (D-Ill.) is all about.

This legislation will stop profitable Wall Street banks and corporations from sheltering profits in offshore tax havens. It will stop rewarding companies that ship jobs and factories overseas with tax breaks. The Joint Committee on Taxation has estimated in the past that the provisions in this bill will raise more than $590 billion in revenue over the next decade.

 

As Congress debates deficit reduction, it is clear that we must raise significant new revenue. At 15.8 percent of GDP, federal revenue is at almost the lowest point in 60 years. Our Republican colleagues want to balance the budget on the backs of the elderly, the sick, the children, the veterans and the most vulnerable by making massive cuts. At a time when the middle class already is disappearing, that is not only a grossly immoral position, it is bad economics.

 

We have a much better idea. Wall Street and the largest corporations in the country must begin to pay their fair share of taxes. They must not be able to continue hiding their profits offshore and shipping American jobs overseas to avoid taxes.

 

Here's the simple truth. You can't be an American company only when you want a massive bailout from the American people. You have also got to be an American company, and pay your fair share of taxes, as we struggle with the deficit and adequate funding for the needs of the American people. If Wall Street and corporate America don't agree, the next time they need a bailout let them go to the Cayman Islands, let them go to Bermuda, let them go to the Bahamas and let them ask those countries for corporate welfare.

 

http://www.reformer....ews/ci_22611579



#2 Spidergawd

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Posted 18 February 2013 - 09:45 PM

I love me some Bernie.



#3 Julius

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Posted 19 February 2013 - 12:56 AM

You know, I usually like Bernie a whole lot but he REALLY needs new writers. I can't even get to the point he's making because the whole piece is destroyed by that first paragraph that reads like a propaganda piece. 



#4 Spidergawd

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Posted 19 February 2013 - 01:39 PM

Yes, but not untrue. 



#5 TakeAStepBack

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Posted 19 February 2013 - 01:48 PM

You know, I usually like Bernie a whole lot but he REALLY needs new writers. I can't even get to the point he's making because the whole piece is destroyed by that first paragraph that reads like a propaganda piece. 

 

Yep.

 

 

When the greed, recklessness, and illegal behavior on Wall Street drove this country into the worst recession since the 1930s, the largest financial institutions in the United States took every advantage of being American. They just loved their country and Americans' willingness to provide them with the largest bailout in history. In 2008, Congress approved a $700 billion gift to Wall Street. Another $16 trillion came from the Federal Reserve. America. What a great country.

 

What a bunch of pure bullshit.



#6 Tim the Beek

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Posted 19 February 2013 - 02:27 PM

What a bunch of pure bullshit.

 

Which part? Still pisses me off that Jamie Dimon and Lloyd Blankfein and the rest of the gang still have companies to run.

 

Free market capitalism my ass...



#7 TakeAStepBack

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Posted 19 February 2013 - 02:29 PM

This part:

 

 

When the greed, recklessness, and illegal behavior on Wall Street drove this country into the worst recession since the 1930s, the largest financial institutions in the United States took every advantage of being American

 

And from there it's all constructed on false premise. Never once does Sander's implicate those truly responsible. It's just another teeth gnashing about greed and recklessness. While the true greedy and reckless scapgoat "Wall St."



#8 Tim the Beek

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Posted 19 February 2013 - 02:40 PM

While it's a generality, " Wall St." was damned reckless - greed is their job, I get that, but if you take risks that can wipe you out if they go wrong, and they go wrong, you should pay the price. No one really did.



#9 In A Silent Way

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Posted 19 February 2013 - 02:43 PM

Maybe ... just maybe ... taxes are too high?



#10 TakeAStepBack

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Posted 19 February 2013 - 02:44 PM

That's your failed justice system and the fact that the federal government gave them parachutes. So who is really to blame here? Who created the lending policies that provoked such incredible moral hazard? Why is it that those who worked within the confines of a system created take the blames for failure, while those who created it stand by and claim victory for so called "saving" the day?

 

It's tiring to listen to investors and capital markets take the blame for government failures.Only for so many to turn around and ask the government to do more to fix the mess they created while the blame gets laid at the feet of "wall st.".

 

I find that far more reckless than any VaR model lending practice.



#11 TakeAStepBack

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Posted 19 February 2013 - 02:45 PM

And Bernie voted favorably for some of these types of lending practices imposed by federal guidelines. He should go look in the mirror for a change and stop yelling about Wall St.



#12 Tim the Beek

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Posted 19 February 2013 - 02:48 PM

Oh, I put plenty of blame on the government, and I know where it all started, but that doesn't, in my mind, excuse the incredibly irresponsible decisions which were made all over the financial sector.



#13 TakeAStepBack

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Posted 19 February 2013 - 03:13 PM

I'm not saying that investors and firms shouldn't be held liable. But the root cause of the problem didn't happen on Wall St. They played along with the system constructed for them. The moral hazard belongs to government with their "everyone should be a homeowner" wrecklessness. Firms that invest are there to make money the same as anyone else. They played by the rules and dictates handed down from the halls of congress.

 

If Bernie wishes to get my attention, he shoudl start talking about the failed policies in the those halls and not greed and recklessness in private financial markets. He has his own share of the blame to bear.



#14 TEO

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Posted 19 February 2013 - 03:24 PM

Oh Oh, please write that to Bernie.  Very much interested in his response if other than a form letter.



#15 Tim the Beek

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Posted 19 February 2013 - 03:30 PM

We're (as usual) not really in disagreement, though I think the blame can be pretty equally shared. It's pretty clear that many on the Street knew that what they were doing was reckless, and wasn't sustainable, but they continued to do it anyway. "They" shouldn't have been doing what they were doing, just because the framework was there.



#16 TakeAStepBack

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Posted 19 February 2013 - 03:33 PM

And neither took any blame at all except Wall St. in the rhetoic department such as these pieces by guys like Bernie. In the end nobody took any responsibilty and now we're building another bubble with the same policies.

 

So there you have it.



#17 Tim the Beek

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Posted 19 February 2013 - 03:34 PM

True nuff. Let's go listen to some music. :mrgreen:



#18 TakeAStepBack

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Posted 19 February 2013 - 03:35 PM

For sure. This topic sucks. :lol:



#19 TEO

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Posted 19 February 2013 - 04:10 PM

For sure. This topic sucks. :lol:

 

 

I'll show you suck!   :nikkiblue:   Wait....whut?



#20 TEO

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Posted 19 February 2013 - 04:11 PM

Bernie's comment form:    http://www.sanders.s...act/contact.cfm



#21 concert andy

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Posted 19 February 2013 - 04:22 PM

I'm not saying that investors and firms shouldn't be held liable. But the root cause of the problem didn't happen on Wall St. They played along with the system constructed for them. The moral hazard belongs to government with their "everyone should be a homeowner" wrecklessness. Firms that invest are there to make money the same as anyone else. They played by the rules and dictates handed down from the halls of congress.

 

If Bernie wishes to get my attention, he shoudl start talking about the failed policies in the those halls and not greed and recklessness in private financial markets. He has his own share of the blame to bear.

 

We are in total agreement!  This,



#22 concert andy

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Posted 19 February 2013 - 04:23 PM

I'll show you suck!   :nikkiblue:   Wait....whut?
>: