If 80% of Americans, both democrats and republicans see reversing income inequity and holding corporations accountable why do you hear nothing on this in the media? The politicians are silent and actually intend to lower even further corporate tax responsibility. The Democratic base needs to remember it has always been the democratic party that put people over profits. It is the fact that the democratic party is now led by Third Way corporate democrats that all policy centers on corporate profit. Changing that dynamic by running and voting for fiscal progressives IS A MUST!!!! If your labor or justice organization is not fielding and running a challenger in primaries....they are not working for you and me!!
For those of you from other states that wonder why we have such a corporate state calling itself Democratic, it comes with the crony, captured politics with all of the state's institutions being captured by the rich. It is third world.....no different than Cambodia or Nigeria......right here in the US!
This is a Wall Street Journal quote as regards entitlement reform......still no talk of bringing back the fraud.....only cuts. I'm going to send this to Attorney General Gansler so he can address this open fraud. In this fraud Maryland charges hospitals a fee......remember O'Malley and the General Assembly doing that? It is a frequently used scam to move funds out of entitlements and into a state's general funds. The Federal government then matches those expenditures and the state gives the hospital back the fees and the state puts the Federal money in the general fund. The money taken from entitlements is now directed to business tax credits.
Wall Street Journal:
A deal also ought to end the long-running "bed tax" scam in which states charge hospitals a fee to increase health-care spending and thus their federal matching rate. Then they launder some of the money back to the hospitals to offset the fee. This is real waste, fraud and abuse, not the talking-point version.
Maryland's politicians say we need to cut! Can you image how many people will die as the age goes to 67 for Medicare benefits? Chronic disease reaches most of us in our late 50s. These corporate pols are trying to kill you and me before we get the medical help we need rather than hold corporations accountable. Remember, Steny Hoyer is the original Clinton Third Way that voted the Glass Steagall wall down knowing it would kill all social and labor gains from the 1940s-1970s AND Steny Hoyer is next in line for the House Leadership. We do not want a profit over people pol in that position. The House members decide so we need fiscal progressives voting Steny Hoyer out of leadership.
THESE ARE EVIL PEOPLE FOLKS WHO WILL ALLOW PEOPLE TO DIE JUST SO CORPORATIONS MAKE MORE AND MORE PROFIT!!!!!!
WE CAN REVERSE THIS......DON'T THINK THE CHANGE IS PERMANENT!!
Washington Wire Political Insight and Analysis From The Wall Street Journal's Capital Bureau
- December 4, 2012, 12:55 PM
By Corey Boles
WASHINGTON—A leading House Democrat said that the $2.2 trillion in budgetary savings in a plan released Monday by House Republicans wasn’t sufficient to tackle the country’s burgeoning budget deficits, while urging his fellow Democrats to accept substantial changes to major entitlement programs as part of a bipartisan agreement to avert the so-called fiscal cliff.
Speaking at a weekly press conference at the Capitol Tuesday, Rep. Steny Hoyer (D., Md.), the House minority whip, said that the GOP plan wasn’t nearly large enough, contrasting it with the plan put forward by the Obama administration last week.
I ATTENDED SEVERAL MEETINGS REGARDING HEALTH CARE REFORM AND EACH TIME I AM THE ONLY ONE THAT BRINGS UP THE NEED TO STOP AND BRING BACK HEALTH FRAUD. THE ONLY ONE. I HAVE HAD THE MARYLAND DEPUTY OF HEALTH AND MENTAL HYGIENE YELL AT ME THAT THERE WAS NO HEALTH FRAUD AND I HAVE HAD BALTIMORE'S HEALTH COMMISSIONER TELL ME THERE WOULD BE NO HEALTH FRAUD IN THESE HEALTH ENTERPRISE ZONES THAT WILL REPRESENT ENTITLEMENT CARE.
THESE PEOPLE ARE OPENLY LYING TO YOU AND ME. THEN THEY ARE SAYING CUTS IN CARE AND SERVICE WILL PAY FOR THE FUNDS LOST TO FRAUD.
THESE ARE EVIL PEOPLE FOLKS!!!!!!!!
VOTE YOUR INCUMBENT OUT OF OFFICE!!!
FBI-------Financial Crimes Report to the Public
Fiscal Year 2006
October 1, 2005 - September 20, 2006
HEALTH CARE FRAUD I. General Overview
The FBI's mission in the area of Health Care Fraud is to oversee the FBI's Health Care Fraud initiatives by providing national guidance and assistance to support Health Care Fraud investigations targeting individuals and organizations who are defrauding the public and private health care systems. The FBI, along with its federal, state, and local law enforcement partners, the Centers for Medicare and Medicaid Services (CMS), and other government and privately-sponsored program participants, work closely together to address vulnerabilities, fraud, and abuse.
All health care programs are subject to fraud, however, Medicare and Medicaid programs are the most visible. Estimates of fraudulent billings to health care programs, both public and private, are estimated between 3 and 10 percent of total health care expenditures. THAT IS NOW 1/3 OF EXPENDITURES FOLKS AS OF 2012 AS FRAUD IS $200-400 BILLION. The fraud schemes are not specific to any area, but are found throughout the entire country. The schemes target large health care programs, public and private, as well as beneficiaries. Certain schemes tend to be worked more often in certain geographical areas, and certain ethnic or national groups tend to also employ the same fraud schemes. The fraud schemes have, over time, become more sophisticated and complex, and are now being perpetrated by more organized crime groups.
Health Care Fraud is expected to continue to rise as people live longer. This increase will produce a greater demand for Medicare benefits. As a result, it is expected that the utilization of long and short term care facilities such as skilled nursing, assisted living, and hospice services will expand substantially in the future. Additionally, fraudulent billings and medically unnecessary services billed to health care insurers are prevalent throughout the country. These activities are becoming increasingly complex and can be perpetrated by corporate-driven schemes and systematic abuse by providers.
The most recent CMS statistical estimates project the total health care expenditures for FY 2006 will total $2.16 trillion, representing 16.5 percent of the Gross Domestic Product. By the year 2012, CMS estimates total health care spending to exceed $3.3 trillion.
With health care expenditures rising at over twice the rate of inflation, it is especially important to coordinate all investigative efforts to combat fraud within the health care system. The FBI is the primary investigative agency in the fight against Health Care Fraud, and has jurisdiction over both the federal and private insurance programs. With more than $1 trillion being spent in the private sector on health care and its related services, the FBI's efforts are crucial to the success of the overall program. The FBI leverages its resources in both the private and public arenas through investigative partnerships with agencies such as the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG), the Food and Drug Administration (FDA), Drug Enforcement Agency (DEA), Defense Criminal Investigative Service, Office of Personnel Management, Internal Revenue Service (IRS), and various state and local agencies. On the private side, the FBI is actively involved with national groups, such as the National Health Care Anti-Fraud Association (NHCAA), the National Insurance Crime Bureau (NICB), the Blue Cross and Blue Shield Association (BCBSA), the American Association of Retired Persons, and the Coalition Against Insurance Fraud, as well as many other professional and grass-roots efforts to expose and investigate fraud within the system.
In furtherance of the FBI's efforts to combat Health Care Fraud in the U.S., the FBI participates in various initiatives with federal, state, and local agencies. At the Headquarters level, the FBI participates in a Senior Level Working Group which includes the CMS, DOJ, HHS-OIG, and other agencies to identify and assess health care industry vulnerabilities and make recommendations to protect the industry and the public through a coordinated effort. At the Headquarters level, the FBI is also involved in bi-weekly coordination meetings at the DOJ which includes various DOJ components involved in the fight against Health Care Fraud. National level liaison is also maintained with the DEA, FDA, Bureau of Immigration and Customs Enforcement, BCBSA, and other partners.
Throughout the country, FBI field offices participate in Health Care Fraud
Working Groups which involve law enforcement agencies, prosecutors, regulatory agencies and health insurance industry professionals to identify the various crime problems involving Health Care Fraud. The FBI develops national and local initiatives when large scale fraud is detected, which may involve participation by several FBI field offices and other law enforcement agencies.
Over the years, FBI national initiatives have addressed frauds involving medical transportation, durable medical equipment, hospital cost reporting, outpatient surgery centers, pharmaceutical fraud, and a variety of other specialized investigations. FBI offices also establish state and local initiatives to meet the needs of the community. Throughout the country, various field offices have conducted their own initiatives targeting clinic, pharmacy, medical equipment, home health agency, cosmetic surgery center, and other frauds which are of great concern within a community. The FBI participates in task forces whenever possible to address specific crime problems or groups of individuals. In order to meet the needs of the private insurance industry, the FBI works very closely with the NHCAA to identify crime trends and provide training to industry and law enforcement agency personnel. Most of the insurance companies utilize an internal Special Investigations Unit and work closely with the FBI and our law enforcement partners.
Health Care Fraud investigations are among the highest priority investigations within the FBI's White Collar Crime Program, ranking behind only Public Corruption and Corporate Fraud. National initiatives include the Internet Pharmacy Fraud Initiative, the Auto Accident Insurance Fraud Initiative, and the Outpatient Surgery Center Initiative. Furthermore, numerous FBI field offices throughout the U.S. have proactively addressed significant crime problems through coordinated initiatives, task forces, and undercover operations to identify and pursue investigations against the most egregious offenders which may include organized criminal activity and criminal enterprises. Organized criminal activity has been identified in the operation of medical clinics, independent diagnostic testing facilities, durable medical equipment companies and other health care facilities. The FBI is committed to addressing this criminal activity through disruption, dismantlement, and prosecution of criminal organizations.
One of the most significant trends observed in recent Health Care Fraud cases includes the willingness of medical professionals to risk patient harm in their schemes. FBI investigations in several offices are focusing on subjects who conduct unnecessary surgeries, prescribe dangerous drugs without medical necessity, and engage in abusive or sub-standard care practices. Recent trends also suggest that advances in technology and electronic medical data have caused Health Care Fraud schemes to evolve. The FBI has developed a significant amount of expertise in investigating technical schemes involving medical data theft and other fraud schemes facilitated through the use of computers. Of course, fraud schemes continue to consist of traditional schemes that involve fraudulent billing such as billing for services not rendered and upcoding of charges for services provided.
HERE IS THE ONE PERSON WHO MAKES THE CORPORATIONS PAY.....I WISH HE WOULD RUN AS A DEMOCRAT NEXT TIME BUT HE IS TOO OLD NOW!! NADER WARNED US OF THE CORPORATIZATION OF THE DEMOCRATIC PARTY BUT WE DIDN'T LISTEN. I REMEMBER VOTING FOR CLINTON AND RESENTING NADER'S CUT INTO THE VOTE COUNT.
WE WERE DUPED!!!! LET'S NOT LET IT HAPPEN AGAIN!!!
Ralph Nader on a simple way to avoid the fiscal cliff: Tax stock trades Chi Birmingham for The Washington Post
By Ralph Nader, Published: November 30 In the debate over the “fiscal cliff,” President Obama and congressional Republicans have returned to the proposals that they were sparring over before the election. They remain at odds over key elements of revenue and spending. Yet both sides are unwilling to consider a minuscule tax on financial transactions that could be a major source of income.
A financial transaction tax would apply to purchases and sales of derivatives, options and stocks. The tax would be small, half a penny or less on each dollar of the transaction value, depending on the product. This idea is often called a “speculation tax,” because it would hit hardest at frothy high-volume trading as opposed to sober long-term investment.
Wall Street might object, but taxing its sales is hardly a radical idea. Americans in all but five states pay state sales taxes, ranging as high as 7 percent, every time they buy a car, an appliance, a pair of pants or piece of furniture, but a trader on Wall Street can buy and sell millions of dollars’ worth of financial products each day without paying a cent in sales taxes. A teacher or police officer who buys a $100 pair of shoes in the District or Maryland pays $6 in sales taxes. Meanwhile, if a financial speculation tax were applied to stock trades at a rate of 0.25 percent, a day trader would pay just 25 cents on every $100 worth of stock bought.
A speculation tax isn’t a new idea, either. Congress enacted one in 1914, and it remained in effect until 1966; initially it imposed a tax of 2 cents on every $100 sale or transfer of stock. The late Nobel Prize-winning economist James Tobin proposed a version to curb foreign exchange speculation in the 1970s. And I wrote about it a year ago, urging Congress to use it to show that it wasn’t deaf to the sentiments of the Occupy Wall Street movement.
It is an idea whose time has come once again.
At the heart of the debate over the fiscal cliff is the need to shrink our nation’s deficit while safeguarding a lackluster economic recovery by limiting the financial impact on average Americans. A speculation tax could do just that by raising revenue while having little effect on most Americans’ pocketbooks and reducing the devastation of runaway speculative trading on Wall Street.
According to a joint report from the Center for Economic and Policy Research and the Political Economy Research Institute, a speculation tax could raise as much as $350 billionannually. Even if we make the unrealistic assumption that such a tax would reduce trading volume on the stock market by half, it could still boost federal revenue by $175 billion a year.
Compare that with the policies being discussed in the fiscal cliff debate. Extending the George W. Bush-era tax cuts for all but the top 2 percent — as Obama has suggested — would cost $171 billion a year in lost revenue. Patching the alternative minimum tax to ensure that millions more Americans are not affected by it would cost $40 billion. Continuing to pay emergency federal unemployment benefits would cost $26 billion. A speculation tax could pay for each and every one of these — and then some.
WHEN THESE CORPORATE POLS TELL YOU THAT WE NEED TO LOWER THE CORPORATE RATE TO 28% AND ELIMINATE CORPORATE TAX LOOPHOLES TO MAKE IT FAIR.......RAISE YOUR HAND IF YOU THINK THOSE CORPORATE LOOPHOLES WILL STAY AWAY? THAT'S RIGHT, NO ONE BELIEVES THAT!!!!!!
WE WANT THE RATE TO REMAIN AT 39% WITH THE LOOPHOLES CLOSED! WE KNOW THE GLOBAL CORPORATE TAX COMPARISON HAS THE US PAYING THE LEAST IN CORPORATE TAXES!!!!!
The corporate tax myth
By Chris Isidore @CNNMoney February 23, 2012: 1:37 PM ET
NEW YORK (CNNMoney) -- U.S. corporations pay one of the highest tax rates in the world. There's little debate about that.
Still, some argue the difference in the overall tax burden for U.S. companies isn't nearly as great it appears.
In fact, the United States collects less corporate tax relative to the overall economy than almost any other country in the world.
And that's a more objective measure of tax burden. Different accounting rules around the world means what's counted as income in one country isn't counted in another -- that makes comparisons of tax rates misleading.
U.S. corporate tax collections totaled only 1.7% of GDP in 2009, the most recent year for which complete data is available, according to the Organization for Economic Cooperation and Development.
On that measure, the United States had the third lowest corporate tax burden, behind France and Germany. The worldwide average was 2.8%.
One reason U.S. corporate tax collections are low is that many U.S. small business owners file personal income tax returns, said Eric Toder, co-director of the nonpartisan Tax Policy Center.
In other countries, many small businesses pay both corporate and personal income tax. So a business owner in a country with a lower corporate tax rate could end up paying more than his U.S. counterpart.
5 tax breaks Washington has given the rich
U.S. businesses have another edge over countries with lower tax rates: They don't pay a Value Added Tax or VAT, a type of sales tax.
All other developed nations raise a significant part of their tax revenue through VATs, but it is not included in the comparisons of corporate tax collections.
The Obama administration Wednesday proposed eliminating many of those breaks while lowering the rate to 28%.
THIS IS A THIRD WAY CORPORATE APPROACH AND IT IS DISHONEST!!!!
WHEN YOU HEAR PEOPLE SAY 'GO AHEAD AND RAISE THE UPPER TAX RATE NOW AND WE'LL FIX IT LATER' YOU ARE HEARING WHAT WILL BE THE MAJOR TAX REFORM EFFORT NEXT YEAR WHERE ALL TAX RATES ARE LOWERED WITH AN END OF LOOPHOLES. THIS PLAN HAS EVEN THE RICH PAYING A MUCH LOWER RATE. IT IS ALL JUSTIFIED BY THE ENDING OF LOOPHOLES AND SUBSIDIES THAT THEY WILL JUST BRING BACK AFTER A FEW YEARS. WE DO NOT WANT ANY TAX RATE LOWERED!!!!!!
IF YOUR INCUMBENT SUGGESTS THIS TRADE-OFF OF LOWER RATES FOR CLOSED LOOPHOLES IS A GOOD IDEA.......THEY ARE WORKING AGAINST THE MIDDLE/LOWER CLASS!!!!
VOTE YOUR INCUMBENT OUT OF OFFICE!!!!!
Corporate tax reform push gains more fans as ‘fiscal cliff’ brings chance to act
By The Washington Post
Published: Saturday, December 1, 2012, 9:01 p.m.
Updated: Sunday, December 2, 2012
WASHINGTON — Amid the tumult over looming tax hikes and spending cuts, a colossal change to the corporate tax code is quietly gathering steam.
U.S. multinationals have spent years pushing for a reform of the tax code that would eliminate taxes on business profits overseas, just as the firms are banking their futures on growth abroad.
Now with the debate over the country’s fiscal future in the spotlight, many executives, lobbyists and some on Capitol Hill are latching on to the “fiscal cliff” as a potential springboard for their cause.
To the companies, no other element of tax reform matters more.
They say that U.S. multinationals face a disadvantage against overseas competitors because unlike many other developed countries, the Internal Revenue Service collects taxes on foreign income when it’s brought back into the United States.
The companies argue that if that tax were eliminated, they would be more likely to bring their overseas earnings back to the United States.
It’s estimated that U.S. multinationals are holding $1.7 trillion in earnings abroad, largely to avoid being taxed at a 35 percent rate.
“At least it will be here and not circulating in other countries,” said Erskine Bowles, co-chair of a prominent White House committee that was tasked with addressing the country’s debt and supporter of eliminating taxes on foreign profits. GOOD OLD CLINTON THIRD WAY CORPORATE ERSKINE BOWLES ALWAYS LOOKING OUT FOR CORPORATIONS AND THE RICH!!!!! YOU SEE WHY JOHNS HOPKINS LOVES HIM SO MUCH!!!!
Some tax experts warn, however, that such a change could radically alter how companies behave and have broad implications for the economy.
Without the right safeguards, they say, eliminating taxes on foreign profits and switching to what’s known as a “territorial” system would blow a hole in tax revenues, give multinationals more leeway to exploit tax havens and drive jobs overseas.
“The territorial tax system they envision would gut the entire U.S. corporate tax code,” said Edward Kleinbard, a professor of tax policy at the University of Southern California. “It would lose gigantic sums of money every year.”
Support for a territorial system has appeared in a number of prominent places.
It’s among the recommendations from both the National Commission on Fiscal Responsibility and Reform, co-chaired by Bowles and former Sen. Alan Simpson, R-Wyo., and President Obama’s jobs council. It was part of Republican presidential candidate Mitt Romney’s economic platform.
And it has been a perennial on the wish lists of business groups such as the Business Roundtable and the U.S. Chamber of Commerce, as well as many individual multinationals meeting with leaders in Washington this week.
So far, territorial tax reform has received little public attention in the fiscal cliff debate, as the Bush tax cuts that are scheduled on Dec. 31 to expire don’t affect corporate tax rates.
Policymakers are deliberating a potential compromise that could be attached to a bigger overhaul of the tax code in 2013. And advocates are hoping for an ambitious version of that deal that would ensure corporate tax reform for income earned at home and overseas.
Sen. Orrin Hatch of Utah, the ranking Republican on the Senate Finance Committee, wants to extend the Bush tax cuts for a year and “let Congress undertake comprehensive tax reform in 2013 with a shift to a territorial system as a part of that exercise,” according to Hatch spokeswoman Julia Lawless.
“It’s not going to do a whole lot of individual tax rates if you don’t reform the corporate tax rates,” said Sen. Tom Coburn, R-Okla., who supports a territorial tax system and says the issue comes up “in every discussion where we talked about tax reform.”
In fact, House Republicans have passed a budget that includes a transition to a territorial tax system, reflecting a framework first laid out by House Ways and Means Chairman Dave Camp, R-Mich.
Democrats are largely opposed to a territorial tax system, often contending that it would encourage firms to move more operations overseas, as Obama frequently argued on the campaign trail.
The Obama administration instead has proposed a “global minimum tax” that would apply to income earned in any country.
Some prominent Democrats agree with Republicans that the fiscal cliff could be a golden opportunity for reforming the entire tax system, with some openly welcoming a debate on how to deal with overseas corporate earnings.
“I think that all of this has to be dealt with as a package — it’s the only way to make the trade-offs that are fair and transparent,” said Sen. Kent Conrad, D-N.D., the outgoing chair of the Senate Budget Committee.
Conrad is not sold on a territorial tax system, but he acknowledges that “it deserves consideration and deserves a full debate and hearing.”
There is broad bipartisan agreement that the corporate tax code needs reform because it presents the worst of all worlds: rates that are relatively high, and tax receipts that are too low.
In the current system, a U.S. firm is supposed to pay a 35 percent tax on domestic and foreign profits; taxes on foreign income can be deferred until companies use that money in the United States.
In reality, though, some multinational firms are able to pay a much lower rate by shifting their income to overseas tax havens and then defer taxes on that money indefinitely.
As a result, revenues from corporations as a percentage of the country’s gross domestic product is near its lowest point in the last 30 years.
Whether a territorial system would help fix these problems — or make them worse — depends wholly on the details, which have been scant from both the business lobby and the recommendations from Simpson and Bowles.
Usually, advocates simply say they want “territorial” without defining what that might look like, when in fact small adjustments can have radical consequences.
A switch to a pure territorial system, for instance, could cost jobs, said Kimberly Clausing, an economics professor at Reed College, who calculates that as many as 800,000 jobs could move to low-tax countries.
Another critical detail: How tough the U.S. government will be on overseas tax havens. Japan is often cited by business lobbyists as a model for the United States, since the country switched to a territorial system in 2009. But Japan’s new system also taxes a company’s foreign income if the other country’s tax rate is less than 20 percent.
This kind of system would slap a number of U.S. multinationals with much higher rates than they’re currently paying, raising the question of whether they would still support a switch to a territorial system if it looked like Japan’s.
The proposal from Camp offers some hints of what a territorial proposal from Republicans might look like. His plan would exempt 95 percent of overseas earnings from U.S. taxation when that income is brought back to the United States. It would also include “anti-abuse” rules to make sure companies don’t skip out on paying “their fair share of U.S. taxes.”
Individual corporations and advocates that favor such reforms have recently come into the spotlight in the current fiscal cliff debate. One group called Fix the Debt, which includes dozens of big business chief executives, has gained prominence recently as it has pressed Democrats and Republicans to compromise with one another on the fiscal cliff.
Fix the Debt said it wants to see comprehensive tax reform that tackles the country’s debt, but it does not advocate a specific plan.
The group includes a number of prominent advocates for a territorial system, though. The co-founders of Fix the Debt are Simpson and Bowles. Honeywell chief executive Dave Cote, who has been a high-profile business advocate of cutting taxes on overseas profits, sits on the steering committee. Caterpillar, whose CEO, Douglas Oberhelman, is also part of the group, testified before Congress last year that a territorial system is critical to creating a “level playing field” for US companies at home and abroad.
In addition, a PowerPoint presentation on the group’s website mentions the possibility of territorial on a slide with the heading, “What can we do?”
Among the bullet points: “Use the fiscal cliff as an opportunity.” Under another heading of, “Budget basics that need to be addressed,” the number one item is a “simplified tax system that is territorial and collects more revenue.”
Alice Rivlin, a senior fellow at the Brookings Institution and a member of the Fix the Debt steering committee, said the two debt commissions she has participated in have diverged on the issue. The group headed by Simpson and Bowles, she said, advocated a territorial system because “the most articulate spokesperson on this issue” on the committee was Cote from Honeywell.
By contrast, the plan she helped develop with former senator Pete Domenici for the Bipartisan Policy Center did not include it because the group had a small business representative instead, and small businesses are less likely to operate overseas.
The Business Roundtable, a strong supporter of a territorial system, is also currently making the case for corporate tax reform on Capitol Hill as the fiscal cliff debate rages.
“If you don’t press the urgency, this can be pushed down the road for years and years,” said Matthew Miller, a vice president for the Business Roundtable.
The Chamber of Commerce is advocating for a “big deal” on the fiscal cliff that includes comprehensive tax reform, with the hope of moving to a territorial system in the process.
Some Democrats fear, however, that attaching a fiscal cliff deal to more sweeping changes to the tax code could undermine their own policy goals, particularly if Congress agrees to comprehensive tax reform without letting tax rates go up first on upper-income Americans. “I think it boxes us in,” says one Democratic aide, who spoke on condition of anonymity given the sensitivity of the ongoing negotiations. “Let’s do what needs to be done — let’s not complicate things here. Let’s use this time and let the high-end Bush tax cuts expire.”
An upcoming fight over the territorial issue also has the potential to split the business community between those whose operations are mainly domestic and thus pay higher taxes and the country’s biggest multinationals.
Tech and pharmaceutical companies in particular have an easier time reducing their taxes because they can pick and choose where they park profits associated with their intellectual property, a practice known as “income shifting.” Meanwhile, companies with brick-and-mortar operations mostly in the United States, like many retailers, are stuck with much higher tax rates.
Kleinbard, the USC tax professor, wondered why corporate tax reformers aren’t looking first at the higher rates paid by domestic firms that don’t have overseas operations.
“Of course we need a lower corporate tax,” he said. “If we’re going to start with lower tax rates, maybe we should start with lower taxes for domestic operating business so they can expand. Wouldn’t that be our first priority?”
NOT IF YOUR PRIORITY IS MAKING CORPORATIONS PAY THEIR FARE SHARE OF TAXES IT DOESN'T!!!!!
WHEN POLITICIANS CLOSE LOOPHOLES AS A WAY TO MAKE CORPORATIONS AND THE RICH PAY THEY DO SO KNOWING THEY WILL SIMPLY COME BACK AND REINSTATE LOOPHOLES, SO IF YOUR POL SAYS HE/SHE WILL LOWER THE TAX RATE WHILE SAYING IT IS BALANCED BY LOST LOOPHOLES......HE/SHE IS LYING.
US CORPORATIONS DO NOT PAY MORE IN TAXES THAN THOSE AROUND THE WORLD......THE US IS IN THE MIDDLE OF DEVELOPED NATIONS IN TAX RATE. WHAT THESE POLLSTER DO IS DELIBERATELY MISREPRESENT WHAT DEFINES TAXATION.....AS IT IS DIFFERENT IN OTHER COUNTRIES.
America's Debt Crisis Corporate tax reform: Talk grows louder By Jeanne Sahadi, senior writerJanuary 15, 2011: 11:12 AM ET
NEW YORK (CNNMoney) -- There's the sweet deal for companies that make Puerto Rican rum. Or the tax break intended to promote U.S. manufacturing but that's so broad it can include the making of hamburgers.
The list goes on. Welcome to the American corporate tax code, which is front and center for a possible overhaul.
On Friday, Treasury Secretary Timothy Geithner will meet with business executives to discuss corporate tax reform. It is expected to be the first of several meetings as the Obama administration decides whether to push the issue this year.
Many business leaders and tax experts say the corporate tax code discourages foreign investment in the United States and hinders the ability of U.S. companies to compete internationally.
The main culprit: the 35% top corporate tax rate, which is among the highest in the world. THIS IS A CONTINUOUS MISREPRESENTATION!!!!!!
That's why one goal is to lower the top rate and in turn streamline the more than 130 business tax breaks currently on the books.
Sounds simple, but it's not. To push the top rate below 30% will require some serious slash-and-burn action. And since every tax break has its well financed defenders, there's likely to be strong pushback.
CNNMoney survey: Reform the tax codeCNNMoney asked six tax policy experts which breaks they think should get the ax. Of their top picks, some are poorly targeted. Others are simply lobbyist-engineered loopholes with minimum value to the economy.
Boosting corn as high as an elephant's eye: Oil refineries can take a 45-cents-a-gallon tax credit for ethanol blended with gasoline.
"It predominantly benefits corn-based ethanol, driving up corn prices, distorting agricultural decisions, and having little if any benefit in terms of greenhouse gas emission reductions or fuel savings," said Gilbert Metcalf, an economics professor at Tufts University.
Eliminating the break could save $32 billion over five years, he noted.
A misguided 'manufacturing' break: The experts flagged the "Section 199" domestic production deduction -- one of the larger breaks in the business arena.
Under Section 199 of the tax code, income from "qualified production activities" conducted in the United States is taxed at a lower rate than other domestic (or foreign) activities by U.S. firms.
The tax break, created in 2004, was intended to encourage companies to manufacture their goods in the United States. But "manufacturing" can be very broadly interpreted to include things like the making of fast food hamburgers.
"[It] ... leads to absurd efforts to characterize activities like content production as 'manufacturing,'" said Edward Kleinbard, a law professor at the University of Southern California and a former chief of staff at the Joint Committee on Taxation.
Moreover, if the point of reform is to make the United States a more attractive place to invest, "any rationale for this rule would be greatly weakened by lowering the U.S. corporate rate," said Daniel Shaviro, author of "Decoding the U.S. Corporate Tax Code."
The estimated cost of this break to federal coffers over five years is $62 billion.
Too big a bang for a deductible buck: Oil and gas companies can take a tax credit for fees or payments they make to foreign governments for access to drill sites or to other infrastructure. But the experts said such fees are not officially a "tax" but are really just a business expense.
As a business expense the fee would qualify as a deduction, which is less valuable than the tax credit they've been getting.
Recharacterizing the fee as an expense rather than a tax could save $8.2 billion over 10 years, according to the Joint Committee on Taxation.
A break to understate income: So-called LIFO accounting rules ("Last-In, First-Out") let companies reduce how much taxable income they report.
And the rules are disproportionately used by just a few types of businesses -- most notably, oil companies, spirits manufacturers and car dealers.
Broadly, LIFO lets companies treat their most recently produced or purchased goods as if they were the first ones sold.
Take a tire company. At the start of the year it costs the company $10 to produce one tire. By the end of the year, because of rising rubber prices, it costs $11. Under LIFO, the company can assume that all of the tires it sold that year cost $11 to produce, instead of $10. (Please see correction below.)
That helps reduce the company's taxable income. Why? Because the cost of goods is subtracted from a company's income, and the higher the cost, the lower their net income will be.
"[LIFO] is a giveaway that benefits a handful of industries and [it] is not supported by standard income tax theory or the most modern financial accounting policies," Kleinbard said.
The estimated cost of this break to federal coffers over five years is $23 billion.
Rewarding racing and rum: TaxVox blogger Howard Gleckman says there are nearly 50 dumb special-interest loopholes -- "temporary" but frequently extended by Congress.
One of note is for Nascar racetrack owners, who are allowed to write off the costs of their racetracks -- plus related facilities, improvements and acquisitions -- over seven years. That's a much faster depreciation schedule than most other businesses are allowed.
The faster a business can write off its property costs, the lower its tax bill in the near term and the more money left in company coffers -- or owners' pockets.
"It is ... hard to see how continuing to allow generous tax depreciation for Nascar racetracks will create many jobs," Gleckman wrote in one post, calling it a "windfall."
Another is for Puerto Rican rum manufacturers. They get a hefty break on a $13.50 per gallon excise tax levied on distilled spirits produced in or imported into the United States. The net excise tax on Puerto Rican rum: 25 cents.