Today, we turn to Shelia Bair, former Chairperson of the FDIC. Currently, on the Board of Santander Bank, a Spanish, based in Boston, MA, with extensive holdings in Europe.
"Apple, GE, Caterpillar, Google. These are marquee names in the drama of foreign tax dodges. But really, can you name one top U.S. corporation that hasn't moved some portion of its business out of this country to reduce its tax bill?
Like it or not. foreign tax havens have become a routine part of American business. Maybe it is time for government to throw in the towel. For 25 years, we have left the top corporate rate at 25%, while other smarter countries have cut theirs. Corporate tax revenues have eroded, while millions of jobs and billions of dollars in profits have left our shores.
Is a corporate income tax even feasible in a globalized and digitized economy? We aren't taxing something tangible like people or property, but rather an extremely portable legal structure. It is kind of dumb to impose high corporate taxes on doing business here when it is so easy for companies to go somewhere else - where labor is probably cheaper too. By eliminating corporate income taxes, we ease pressure on U.S. wages, bring back jobs and repatriate an estimated $2 billion in profits stashed elsewhere.
Many will argue that this would be a giveaway to the rich. But the current system isn't taxing rich shareholders. It is taxing the corporate entity - and much of that tax is passed on to employees and customers. Today's policies actually favor the wealthy with lower taxes or capital gains and dividends to mitigate the impact of double taxation. It would be smarter to tax corporate profits once, at the shareholder level, and apply the same, higher taxes to capital gains and dividends that apply to us working stiffs.
The corporate income tax may apply to our inner Robin Hood, but its economic impact has turned it into a Greek tragedy. It is time to bring down the curtain."
Where has this lady been? Yes, I know, lolling away in a plush government job - at the FICA, but now apparently, she has moved her knowledge and obvious expertise to a bank were she is probably making much more money, and would probably be dealing with - and gaining more intimate knowledge of, the minds of foreign bankers and banking systems. Good career move.
Meanwhile, our politicians are typically ignorant of the way the world works - aside from their armed forces and the potential for danger, if aimed at our shores.
I certainly know even less that they do, but I do know that she obviously has her facts right and they seem to be ignored in the halls of Congress and within the inner workings of the White House.
Next time you hear someone boasting in our financial integrity and the health of our economy. send him or her a copy of the above and ask for their opinions on the subject.