Bernie Sanders, fresh from never drawing a paycheck other than from coffers filled with taxpayer dollars, now describes corporations as “deserters” for using existing law and the existing tax code to reduce their aggregate tax burden. In other words, Bernie wants to squash inversions.
But let’s ask Big Boy Bernie a question: Who writes the laws? Congress. Who has established the highest corporate income
tax rate in the OECD? Congress. Who wants to make sure that corporations face a higher corporate tax burden than any other place on the planet, and then scratch their heads and wonder why corporations a) aren’t hiring, and b) look to use existing tax law to avoid paying more than they have to?
Congress. Congress in the form of, specifically, Bernie Sanders, avowed socialist and re-distributor of other peoples’ earnings.
Let’s let Bernie speak for himself, though:
“I have a message for these corporate deserters: You can’t be an American company only when you want corporate welfare from American taxpayers or you want lucrative contracts from the federal government. If you want the advantages of being an American company then you can’t run away from America to avoid paying taxes.”
First, I have a message for Bernie: Your august body, the Senate, approves corporate “welfare”, in whatever form it takes. If you don’t want corporations seeking breaks from the people who write the laws, stop writing laws that do exactly that. Stop sending former Congressmen to work for lobbying firms. Oh, and Bernie has no problem signing bills that subsidize, corporate-welfare-style, certain industries that are prevalent in Vermont. So that form of welfare is OK, but others are not? And do we need Senators creating and approving 5-year plans like a Politboro hack from the 1980’s?
Secondly, the “advantages” of being an American company include the highest tax rate in the OECD. How is that advantageous to US corporations, exactly, especially when self-congratulating politicians like Sanders villify the companies that actually produce something, and create jobs to produce those goods or services? A higher tax rate means reduced net income. Reduced income means slower corporate growth, reduced product development, less hiring – in other words, the taxes that Bernie thinks belongs to him actually represent jobs and growth taken away from the American worker.
And corporations are the ones being unpatriotic? Bernie wants to make it harder to find a job. In a recession. He’s criticizing corporations for responding to the incentives the US government, in its laws and tax code (one of the largest and most complex codes in the OECD) has created.
In other words, if someone sets your house on fire, you get out. What you don’t normally see is the person who set the match to your house asking the fleeing occupants why they’re leaving their privileged home. In fact, Bernie’s going to take it one step further, and make sure they are forced to re-enter the burning building.
One last thing:
“At least a dozen other major companies are considering abandoning America through a loophole in the tax code known as corporate inversion. Such inversions allow U.S. companies to move their corporate headquarters overseas by merging with a foreign company in a low-tax country, even though most of their profits and sales occur in America.”
It’s not a loophole; it’s the law. Kind of like Obamacare. It’s not a loophole, Bernie, it’s law – the laws that the Senate makes. Change the US tax code so the rate is on par with other OECD countries – hell, peg it to an average of all of them and you’ll shave off 10 percentage points – and you’ll see the inversion rate drop. You’ll see unemployment go down. You’ll see home-buying increase. Etc.
You will see all those things, results that don’t require Congressional interventions, other than getting the hell out of the way. Which is why you’ll never, ever, see a career carpetbagger like Bernie Sanders champion or vote for a corporate tax reduction.
Even if it costs Americans jobs.