Squaring Tax Haven Rhetoric With The Policy
Huge surprise here - the business lobby wants to keep ripping off the US Treasury by hiding their tax obligations in secret bank accounts. Why wouldn't they? Despite the chronic bleatings about America's high corporate tax rate, corporations only pay a scant 2.3% on their massive profits. That's hundreds of billions of dollars essentially taken from the public, that could go toward health care or jump-starting the new energy economy. The Administration is signaling that this crackdown is a "down-payment on the larger tax reform we need to make our tax system simpler and fairer and more efficient for individuals and corporations." I think the exchange of a lower tax rate with far fewer loopholes is one I would happily make.
But David Sirota is right - you simply cannot advocate for ending corporate tax havens while pushing a free trade agreement with Panama, one of the major remaining tax havens out there. Fortunately, that dichotomy has been brought to light, causing a move to get Panama to comply with the new law:
That's right, after the entire Washington press corps and all of cable news did their best stenography act and refused to ask a single serious question about the blatant hypocrisy in President Obama's "we're getting tough on corporate tax havens" announcement yesterday, ABC News' Jake Tapper demanded - and actually got - some answers at today's White House press briefing. Specifically, he asked the White House how it can be claiming to be serious about cracking down on corporate tax havens while simultaneously pushing a Panama Free Trade Agreement that would reward and legitimize the practices of one of the worst tax havens on the planet.
White House press secretary Robert Gibbs, clearly conditioned after years of D.C. press work to be unprepared for any kind of substantive question, had absolutely no answer for Tapper, except to promise him that someone from the U.S. Trade Representative's office would get him something. Tapper stuck to the story, and eventually broke some real news when he spoke with the U.S. Trade Representatives' office:
Carol Guthrie, a spokeswoman for US Trade Representative Ron Kirk, tells ABC News that "Ambassador Kirk has been always been very clear that it will be necessary to address outstanding issues on labor and tax policies, and we continue to work on those tax issues. Our refusal to tolerate tax havens is precisely why we're working with the Panamanian government to address concerns regarding its international tax policies. We can work to improve international tax practices and open markets for entrepreneurs and workers at the same time."
Guthrie, of course, is bullshitting when she says "Kirk has been always been very clear that it will be necessary to address outstanding issues on labor and tax policies." All he's been clear on is that he wants the Panama deal passed. But now forced into a corner, he's stated that the "precise" reason the administration hasn't introduced the Panama pact in Congress is its attempt to "work with the Panamanian government to address concerns regarding its international tax policies." That's actual, genuine and important news - a statement far clearer and more precise than any of the general bromides of the past.
It seems to me that the Obama Administration has the right theoretical stance but often backslides on the details. That's where a vibrant progressive movement comes in. Incidentally, Sirota tweeted this question to Tapper.