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Monday, February 11, 2013

A Choice For Corporate America

Are You With America or The Cayman Islands

By Senator Bernie Sanders
The Huffington Post
February 11, 2013

When the greed, recklessness, and illegal behavior on Wall Street
drove this country into the deepest recession since the 1930s,
the largest financial institutions in the United States took every
advantage of being American.

They just loved their country - and the willingness of the American
people to provide them with the largest bailout in world history.

In 2008, Congress approved a $700 billion gift to Wall Street.

Another $16 trillion in virtually zero interest loans and
other financial assistance came from the Federal Reserve.

America. What a great country.

But just two years later, as soon as these giant financial institutions
started making record-breaking profits again, they suddenly lost their
love for their native country.

At a time when the nation was suffering from a huge deficit, largely
created by the recession that Wall Street caused, the major financial
institutions did everything they could to avoid paying American taxes
by establishing shell corporations in the Cayman Islands and other tax

In 2010, Bank of America set up more than 200 subsidiaries in the
Cayman Islands (which has a corporate tax rate of 0.0 percent) to
avoid paying U.S. taxes.

It worked. Not only did Bank of America pay nothing in federal
income taxes, but it received a rebate from the IRS worth $1.9
billion that year.

They are not alone. In 2010, JP Morgan Chase operated 83
subsidiaries incorporated in offshore tax havens to avoid
paying some $4.9 billion in U.S. taxes.

That same year Goldman Sachs operated 39 subsidiaries in
offshore tax havens to avoid an estimated $3.3 billion in
U.S. taxes.

Citigroup has paid no federal income taxes for the last four years
after receiving a total of $2.5 trillion in financial assistance from
the Federal Reserve during the financial crisis.

On and on it goes.

Wall Street banks and large companies love America when they
need corporate welfare.

But when it comes to paying American taxes or American wages,
they want nothing to do with this country.

That has got to change. Offshore tax abuse is not just limited to
Wall Street.

Each and every year corporations and the wealthy are avoiding more
than $100 billion in U.S. taxes by sheltering their income offshore.

Pharmaceutical companies like Eli Lilly and Pfizer have fought to
make it illegal for the American people to buy cheaper prescription
drugs from Canada and Europe.

But, during tax season, Eli Lilly and Pfizer shift drug patents and
profits to the Netherlands and other offshore tax havens to avoid
paying U.S. taxes.

Apple wants all of the advantages of being an American company,
but it doesn't want to pay American taxes or American wages.

It creates the iPad, the iPhone, the iPod, and iTunes in the United
States, but manufactures most of its products in China so it doesn't
have to pay American wages.

Then it shifts most of its profits to Ireland, Luxembourg, the British
Virgin Islands and other tax havens to avoid paying U.S. taxes.

Without such maneuvers, Apple's federal tax bill in the United States
would have been $2.4 billion higher in 2011.

Offshore tax schemes have become so absurd that one five-story
office building in the Cayman Islands is now the, "home" to more
than 18,000 corporations.

This tax avoidance does not just reduce the revenue that we need to
pay for education, healthcare, roads, and environmental protection,
it is also costing us millions of American jobs.

Today, companies are using these same tax schemes to lower
their tax bills by shipping American jobs and factories abroad.

These tax breaks have contributed to the loss of more than
5 million U.S. manufacturing jobs and the closure of more than
56,000 factories since 2000.

That also has got to change.

At a time when we have a $16.5 trillion national debt; at a time when
roughly one-quarter of the largest corporations in America are paying
no federal income taxes; and at a time when corporate profits are at
an all-time high; it is past time for Wall Street and corporate America
to pay their fair share.

That's what the Corporate Tax Dodging Prevention Act (S.250) that
I have introduced with Rep. Jan Schakowsky (D-Ill.) is all about.

This legislation will stop profitable Wall Street banks and corporations
from sheltering profits in the Cayman Islands and other tax havens to
avoid paying U.S. taxes.

It will also stop rewarding companies that ship jobs and factories
overseas with tax breaks.

The Joint Committee on Taxation has estimated in the past that the
provisions in this bill will raise more than $590 billion in revenue over
the next decade.

As Congress debates deficit reduction, it is clear that we must raise
significant new revenue.

At 15.8 percent of GDP, federal revenue is at almost the lowest point
in 60 years.

Our Republican colleagues want to balance the budget on the backs
of the elderly, the sick, the children, the veterans, and the most
vulnerable by making massive cuts.

At a time when the middle class already is disappearing, that is not
only a grossly immoral position, it is bad economics.

We have a much better idea.

Wall Street and the largest corporations in the country must begin to
pay their fair share of taxes.

They must not be able to continue hiding their profits offshore and
shipping American jobs overseas to avoid taxes.

Here's the simple truth.

You can't be an American company only when you want a massive
bailout from the American people.

You have also got to be an American company, and pay your fair share of taxes, as we struggle with the deficit and adequate funding for the needs of the American people.

If Wall Street and corporate America don't agree, the next time
they need a bailout let them go to the Cayman Islands, let them
go to Bermuda, let them go to the Bahamas and let them ask those
countries for corporate welfare.

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