Yves here. Hahaha! While you were distracted by the impeachment drama, the Trump Administration soldiered on with launching more corporate gimmies, this one in the form of another tax break.
By Jake Johnson, staff writer at Common Dreams. Originally published at Common Dreams
President Donald Trump’s Treasury Department on Thursday took the first step toward eliminating remaining regulations designed to prevent corporations from avoiding U.S. taxes by storing profits overseas, a move critics decried as yet another harmful giveaway to big business.
Treasury Secretary Steve Mnuchin, a former Goldman Sachs executive, said in a statement that the 2017 GOP tax law—which disproportionately benefitedthe rich—rendered Obama-era rules against offshore tax avoidance “obsolete” by significantly reducing the corporate tax rate.
Sen. Ron Wyden (D-Ore.), the top Democrat on the Senate Finance Committee, disagreed with Mnuchin’s assessment, warning in a statementthat the Treasury Department’s plan “only provides an opening for corporations to again dodge their taxes.”
“The corporations that got a massive taxpayer handout are getting another gift from Donald Trump,” said Wyden. “The Obama administration had essentially shut down inversion—transactions whose only purpose is to help big multinational corporations move overseas to avoid paying taxes.”
According to Bloomberg, the Treasury Department’s proposal, detailed in a policy guidance (pdf) released Thursday, “could make it easier for firms to use accounting tactics to minimize their U.S. earnings and inflate their foreign profits, which are frequently taxed at rates lower than the current 21 percent domestic corporate levy.”
“The existing regulations were aimed at stopping American companies from moving their headquarters to a lower-tax country, a process known as a corporate inversion,” noted Bloomberg.
Contrary to Mnuchin’s claim that the GOP’s 2017 tax law eliminated incentives for corporations to shift profits overseas, advocacy groups and Democratic lawmakers have argued the law made it easier for businesses to avoid U.S. taxes.
“The Tax Cuts and Jobs Act (TCJA) will allow companies to avoid taxes on $235 billion in profits each year going forward,” a coalition of more than 50 progressive organizations led by Americans for Tax Fairness wrote in a letter(pdf) to Congress last May.
“Moreover, the law created new incentives for multinational corporations to move their real operations offshore,” the groups said. “The law guarantees that U.S. multinational corporations will pay at most one-half the domestic tax rate on their offshore earnings, with many companies paying little or nothing in taxes on these earnings.”
You would think this could be used to weaken Trump’s base in flyover country, if not for the
Democrats in support of it also…..
The majority of Trump’s base believes, as an article of faith, that we need to eliminate corporate taxes so the poor starving business owners can support more employees.
Completely denying reality, of course, and offering no solutions to it. It’s the “temporarily embarassed millionaire’s club”.
Pretty much. Both parties are in the pocket of the monopolies that have grown up since deregulation became the thing, imo. Once upon a time the FDR/New Deal Dems opposed monopoly power. The New Dems seem to love monopoly power.
Donald Trump, again, reduces taxes for… Donald Trump! That it reduces taxes for anyone else is purely coincidental.
And at the same time, he’s not doing any of this all by himself.
I think it’s more along the lines of he knows an idea that will benefit himself when he hears it.
One sees why the Democrats are pushing so hard for the “Russiagate” thing, and making a circus of impeachment – because on matters of substance they are as bad as the Republicans.
The Democrats have no problem blocking any serious attempt at enforcing the laws against illegal immigration (something favored by the super-rich, who love cheap labor more than anything else – Bernie Sanders 2015). The Democrats have no problem blocking Trump’s (admittedly somewhat pathetic) attempts to pull us out of these pointless winless foreign wars. But as regards Trump’s massive corporate tax cut – they basically just let it pass with only a few pro-forma grumbles. Because you gotta have your priorities. Especially when these priorities have been paid for.
I dont get distracted, I see it all. These people will all be destroyed by the Almighty in his great day along with adherents to and all nation/states. This is the love of money and me me me attitude forecast in the last days.
you and me both, I have been seeing it for a long time. I would like to remind people that there is a world of difference between a guy on the bottom wanting more, and a guy on the top wanting more.
Given the left-wing surge through Sanders I am convinced that the corporate paid-for Democrats see the writing on the wall. Their paid mission is now to discredit the Democratic party as much as possible to make sure that 1) in short-term Trump wins and continue the corporate and 1%-er welfare-programs and 2) that no left-winger, similar to Sanders can ever rule through the Democratic party since it has become a joke and it will cost a lot of time and money to build a new party that will be trusted
I’ll make you a bet that the corporate media does not cover this story.
No, no, no… It’s certainly a move in 11 dimensional chess. First we lure these corporations back onto American soil. Then, once they’re comfy, we nationalize them all and seize all their overseas holdings. Surely, that’s the plan.
The good news is that all it will take to reverse these executive orders that benefit the few are new executive orders by a different president.
On the related topic of the Mnuchin Treasury acting in the shadows while the spotlight is trained elsewhere, I noticed that the Treasury General Account cash balance hit $435 billion at the end of October, up over $300 billion from the balance in that account at the end of August. That action basically pulled over $300 billion in cash liquidity from the financial system, all while short term money market rates spiked as high as 10 percent and this president was railing against Fed policy makers for tight monetary conditions and high interest rates. I hate to think what would have happened to their precious stock market if the Powell Fed had not implemented new policies to offset the current administration’s borrowing for the purpose of hoarding cash. I suspect something along the lines of the stock market drop in the fourth quarter of last year when they basically pulled the same stunt ahead of their partial government shutdown.
Why is the US Treasury hoarding cash? There is no apparent reason to do so in the name of lowering interest payments as the Fed remits its interest income to the Treasury at the end of each fiscal year. I expect we will find out soon enough.
The D party reminds me of the ‘union’ I belonged to while building refrigerated truck bodies in the south. On Sundays, the head of the ‘union’ sat in the same pew as the owner of the factory. When real union folks started agitating from within, they were fired.