Say Anything Blog

This will have many a populists’ blood boiling, but it’s what we get for having the worst corporate tax code in the world:

WASHINGTON – Eighty-three of the nation’s 100 largest corporations, including Citigroup, Bank of America and News Corp., had subsidiaries in offshore tax havens in 2007, and some of the companies received federal bailout funding, a government watchdog said Friday.

The Government Accountability Office released a report that said Bank of America Inc., Citigroup Inc. and Morgan Stanley all had more than 100 units in countries that maintain low or no taxes. The three financial institutions were included in the $700 billion financial bailout approved by Congress.

Insurance giant American International Group Inc., which has received about $150 billion in bailout money, had 18 subsidiaries. JPMorgan Chase & Co. had 50 units and Wells Fargo & Co. had 18; both financial institutions received government bailout money.

Not surprisingly, the solution to this from the liberals (including North Dakota’s own Byron Dorgan) is more government:

Sens. Carl Levin, D-Mich., and Byron Dorgan, D-N.D., who requested the report, have pushed for tougher laws to fight offshore tax havens around the globe. Levin, who leads the Senate Permanent Subcommittee on Investigations, has estimated abusive tax havens and offshore accounts cost the U.S. government at least $100 billion a year in lost taxes.

“I think we should take action to shut down these tax dodgers and we will be introducing legislation to do just that,” Dorgan said.

Shut them down?  Is Senator Dorgan suggesting the use of government force to bankrupt, or otherwise dismantle, American businesses that have exploited perfectly legal tax loopholes?  That seems a bit ridiculous, especially when there are solutions available that would bring these companies (or at least their accounting) back to our shores and simultaneously boost our economy.

One solution would be to simply reduce the tax burdens on these corporations by lowering tax rates and simplifying the tax code (thus eliminating hundreds of billions spent in addition to tax dollars on complying with the tax code).  This would make “off shoring” (which is an expense in and of itself) less attractive, and would give these companies more capital to invest in expanding operations, hiring new workers and generally producing more wealth and prosperity in our economy.  Of course, that would mean “tax cuts for the rich,” and we all know a liberal’s brain shuts down once those words come into play.  But it seems to me that tax cuts for the businesses that employ hundreds of thousands of Americans and pump billions upon billions of capital into our economy would be a much more efficient way to stimulate the economy than, say, the $750 billion - $1 trillion worth of “economic stimulus” spending Democrats are planning to pump into food stamps and weatherizing the homes of welfare cases.

Another solution would be to simply change the way we tax.  A tax on consumption instead of production, for instance, would not only stop off shoring (you can’t do business in America and avoid taxes if those taxes are on your purchases) but would also remove all of the compliance burden many of these corporations struggle with.

But I think these solutions make too much sense for liberals like Byron Dorgan who are more interested in treating American businesses - responsible for millions of jobs and trillions of dollars of wealth - as if they were an enemy to be conquered and then punished.  As long as short-sighted, wrong-headed simps like Dorgan are in charge our economy isn’t going to thrive again.