corporate inversions

Obama, Corporate Inversions, and Grotesque Hypocrisy

Last month, I put together a list of six jaw-dropping examples of left-wing hypocrisy, one of which featured Treasury Secretary Jacob Lew.

He made the list for having the chutzpah to criticize corporate inversions on the basis of supposed economic patriotism, even though he invested lots of money via the Cayman Islands when he was a crony capitalist at Citigroup.

But it turns out that Lew’s hypocrisy is just the tip of the iceberg.

It seems the entire Obama Administration was in favor of inversions just a couple of years ago. Check out these excerpts from a Bloomberg story.

Obama Lecture on Playing by the Rules is Utter Hypocrisy

In a recent weekly address, Barack Obama uttered ten words which every conservative in the nation immediately recognized as absolute truth in a constitutional republic which provides for separation of powers among the branches and levels of government. To quote, Obama stated “You don’t get to pick which rules you play by.”

His statement was made regarding the growing trend of “inversion,” whereby U.S. multinational corporations merge with foreign companies and move their headquarters overseas in order to avoid the double taxation that the United States levies on its companies, a burden suffered by the corporations of no other industrialized nation, which therefore puts American businesses at a competitive disadvantage.

The irony of those words, coming from THAT man, should be lost on no one with an IQ above room temperature.

Obama, more than any president in American history, has shown complete and utter contempt for any constitutional restrictions on his power, and openly mocks and taunts those that express deep concerns for his brazen disregard for the tradition of compromise (as ugly as the process is to get to that end point) that has guided our government for more than two centuries.

Obama talks about having “a phone and a pen,” a reference to his numerous Executive Orders which often bleed over into powers reserved for the other branches of government. Obama has repeatedly claimed this year that he will act unilaterally when Congress refuses to give him his way, and when Congress protests such abuse of power, he glibly responds, “Sue me!”

Hey, Barack Obama, businesses are moving overseas because of a terrible tax climate made worse by you

There’s been a lot of talk lately from President Barack Obama and administration officials about “economic patriotism.” They say that corporations shouldn’t be allowed to move overseas to escape paying the corporate income tax.

“Even as corporate profits are higher than ever, there’s a small but growing group of big corporations that are fleeing the country to get out of paying taxes,” President Obama said at a stop in Los Angeles on Thursday. “They’re keeping, usually, their headquarters here in the U.S. They don’t want to give up the best universities and the best military and all the advantages of operating in the United States. They just don’t want to pay for it. So they’re technically renouncing their U.S. citizenship.”

Earlier this month, President Obama suggested that Congress (read: Republicans) lack “economic patriotism” to work with his administration on issues the country faces. Treasury Secretary Jack Lew dropped the same term in a letter to Senate Finance Committee Chairman Ron Wyden (D-OR) as he urged Congress to pass legislation to end corporate inversions.

“What we need as a nation is a new sense of economic patriotism, where we all rise or fall together. We know that the American economy grows best when the middle class participates fully and when the economy grows from the middle out,” Lew wrote in the letter to Wyden. “We should not be providing support for corporations that seek to shift their profits overseas to avoid paying their fair share of taxes.”

Well, this is unconstitutional: Senate Democrats want to go after corporations that have left the U.S. over the last 20 years

Article I, Section 9 of the Constitution explicitly prohibits ex post facto laws, those that are passed and signed to outlaw some sort of activity after the fact. But don’t tell that to Sen. Chuck Schumer (D-NY). He may soon introduce legislation that would penalize companies that moved their headquarters overseas because the United States’ unfriendly tax climate, reaching as far back as 1994:

A top Senate Democrat’s proposal to limit future deductions for companies that moved tax addresses out of the U.S. as many as 20 years ago would penalize dozens of so-called inversion deals.

The proposal by Charles Schumer of New York, the No. 3 leader in the Senate’s Democratic majority, would reduce the amount of deductible interest for inverted companies to 25 percent of U.S. taxable income from 50 percent, according to a draft obtained by Bloomberg News.

President Barack Obama has included a similar provision in his annual budgets, and this is the first time the language made it into a legislative proposal, Robert Willens, a New York-based independent consultant on corporate taxes, said by phone yesterday.

“It would have a very profound and immediate effect on these companies and would be very effective at reducing the attractiveness of inversions,” Willens said. “This is certainly a political statement.”

Inversion Controversy Is about Whether Company Profits Should Flow to Shareholders or Government

Since I’ve been in Washington for nearly three decades, I’m used to foolish demagoguery.

But the left’s reaction to corporate inversions takes political rhetoric to a new level of dishonesty.

Every study that looks at business taxation reaches the same conclusion, which is that America’s tax system is punitive and anti-competitive.

Simply stated, the combination of a very high tax rate on corporate income along with a very punitive system of worldwide taxation makes it very difficult for an American-domiciled firm to compete overseas.

Yet some politicians say companies are being “unpatriotic” for trying to protect themselves and even suggest that the tax burden on firms should be further increased!

In this CNBC interview, I say that’s akin to “blaming the victim.”

Burger King looking to become a Canadian corporation because of the United States’ insane corporate tax code

U.S. fast food giant Burger King is looking to buy Tim Horton’s in Canada, and move its corporate headquarters to Canada. It’s a tax move called corporate inversion that’s been taken by companies that aren’t in the public eye like Burger King, and it’s been a bone of contention between Democrat and Republican lawmakers.

Democrats think that the solution to the problem lies in making it more difficult for American corporations to buy smaller companies abroad, to justify moving out of the U.S. Keeping businesses in America with competitive tax rates is the solution Republicans support. As for this particular case, Burger King is looking to save around 20 percent in taxes.

Canada’s corporate tax rate is 15 percent, according to the Organization for Economic Cooperation and Development. The U.S. rate is 35 percent, the highest among OECD nations, although most businesses pay significantly lower effective rates.

The Washington Examiner pointed out one obvious problem. In addition to not being competitive, there is no such thing as a standard effective tax rate for businesses in the U.S. As we head into the mid-term elections, tax reform should be an issue of concern, especially corporate taxes.

America needs to be encouraging businesses to move here with low tax rates. President John F. Kennedy understood that, when he decreased taxes - it is always better to collect smaller amounts from more people and businesses than it is to continually increase tax burdens on few. As Burger King is showing, the few can choose to just move away.

Today in Liberty: Obama may take more unilateral action on immigration, Medicare and Social Security are still very, very broken

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