How Corporations are Getting Away with Not Paying Taxes

Isn’t our tax and corporation system great? The courts say that companies are people and that they now have rights to deny it’s workers their personal rights so they don’t have to pay for things they don’t want. Now companies can pay less taxes in a new scheme they found that allows them to move overseas but still operate in America.

As Unpatriotic as it Gets
The scheme is called Corporate (tax) Inversion and it allows a company to buy a foreign company and then say that that company they just bought is now their headquarters for running their business. Nothing really changes except just legal paperwork, all the original executives and operations still work in America they just moved their “address” overseas that way they are able to clam a lower tax rate thus avoiding the American tax system.

The world wind this issue has kicked up is one that has shown how conceited American companies have become. Ask any business person or CEO of a public company and the only thing they think about is working for the benefit of their shareholders. The idea of a shareholder has really corrupted the whole idea of business now. They are so focused on making money that they don’t care if they hurt people, communities, schools, and even governments if it means a higher profit in the next quarter. And that is literally what they are doing in this whole scheme of moving their headquarters overseas to avoid paying taxes. They are still using American employees, schools, universities, government contracts, and even government funding but they don’t want to support any of the structures that they rely on to keep them going by paying their fair share of taxes.

Close the Loophole
Right now Senators Dick Durbin, Carl Levin, Representatives Rosa DeLauro, Sander Levin and Lloyd Doggett of Texas are all backing a bill that would essentially close the loophole. It is called the No Federal Contracts for Corporate Deserters Act and would deny federal contracts to american companies that incorporated overseas with at least 50% original shareholders and did not have it’s main operations overseas. The whole idea is to not give anything back to companies if they think it is a good idea to desert the very country that helped them achieve their start.

More needs to be done to stop giving companies so much power. When you allow companies to perform a corporate inversion you are essentially allowing them to take money out of a system and put it into another one. This makes is harder for the original system to function if it does not meet it’s fiscal needs. The money that would have been spent on taxes is kept for the company to grow more but it doesn’t mean that it has to keep hiring more people where it originally started, the whole point of a company is to maximize profits and it can do that if it doesn’t have to keep paying large amounts of money to the American government.

So who loses out if that happens? Everyone.

Taxes are Important
This concept is not american at all and it is very much so by the political ads that you see on TV. American’s have been told for the longest time that taxes are bad and because of that wrong information they have been hearing for so long they start to believe it. Here are what taxes are used for and why people need to pay their fair share.

– Public Education
– Highways and roads
– City Utility Structures
– National Parks
– Welfare Programs
– Public Libraries
– Universities
– Healthcare
– Transportation
– Government Agencies
– National Museums and Arts
– Social Security
– Military
– Research
– and tons more

Other countries have higher tax rates than we do and better systems in place for care. There are many countries where you can walk in and get anything you need done at a hospital and never see a bill because their high tax rates cover this. Every time tax breaks, credits, discounts are offered, one of those areas loses money. Anyone want to take a guess which one is the first to receive cuts? Education, the very thing a country needs to stay ahead is the first program that gets cut.

Another Recession Coming
If you haven’t already seen the film “Inside Job” then you really have no idea what companies did to our government. They basically took control of the whole system, made them deregulate the markets, and made the government bail them out for their greedy mistakes. Now that more companies are interested in inverting you will have less money circulating in a system that desperately needs more money to support public programs. When you take away money that supports the very things that people need you will end up with a not pleasant ending.

The amount of deregulation that companies got away with is the reason the economy tanked, they didn’t want government agencies snooping around at what they were doing. Most other developed markets have very sophisticated systems in place to keep something like that from happening (i.e., E.U.). Companies need to go back and have more regulation put back in place and be made to pay their fair share of taxes. Did you ever wonder why they only like to hire from the Ivy league levels? Because they want to make sure that the students there know that it is all about saving money for the company and to hell with everyone else.

As you watch the Inside Job you will see that it really is only a matter of time before we experience another recession when you allow so many people to keep taking so many tax breaks and cuts you basically are mortgaging the lives of individuals that are the very thing needed to support these greedy corporations. It will be a long day before republicans wake up to the destruction they are causing and a longer day before democrats understand what they are doing. They can never seem to understand that they need to work for the good of the people but their judgement is clouded by the millions of dollars donated by the very companies that don’t want to pay their taxes.

Ask Kids and Teens What to do and you will find a Solution
Walk into any 3rd or even 7th grade class and ask the kids how they should fix such a problem and you will be surprised at some of the solutions you might get. Remember, every time a company gets a tax break, less money goes to teaching those kids more stuff and less money means more potholes on the roads because there is not enough money to hire more employees to work on the roads.

The best thing about living in America is that you have honest people and two such persons told corporations the truth about what it is they are trying to do to America. I included the episode links below because of how important it is to understand what corporations are trying to get away with and like a parent to a child they should be disciplined for their bad behavior.
Watch what Jon Stewart had to say about Companies that Try to Invert

Jon Stewart Takes on Corporate Inversion Article

Watch the Colbert Report talk about Corporate Inversions

They both made a great point that we have given too much power over to corporations and because of that they now control most of the government especially since most of the people who run the government were hired from major corporations.

The other side of the Argument
In this short section I will include a few things about what republicans think of this whole issue if you didn’t want the videos above, which I highly recommend you do. The ones in favor of companies working to increase their profit margins are, no surprise there, republicans who are defending this practice as a legal way of ensure higher profit returns for their shareholders. Their view is that this will enable companies to hire more people (doesn’t mean it has to be in America) and that it hurts investments in other areas. Their biggest argument to all this is that the tax system needs to be reformed and lowered if companies are encouraged to stay.

I don’t know about you but I can tell you you don’t need a college education to think like they do. Like time I checked I can just turn on a fan in the middle of the dessert if I want to listen to a lot of hot air blowing in the wind.


If you want to learn more about what Corporate Inversion is all about then I have provided links below. If you want to keep this from happening elect people that will do the right thing by requiring more regulation on companies and ensuring that fair share of taxes are paid. Think something like that will ever happen? No, but it’s nice to dream isn’t it? I don’t know about you but I’m not looking forward to the next recession when it happens. And it’s not too far around the corner either considering what the Asset-Management Industry is doing to the economy.

News Articles

HBR: The Conversation We Should be Having about Corporate Taxes
One way to fix the corporate tax: repeal it
Democrats propose blacklisting
Democrats urge no U.S. contracts
Democrats want ban on government contracts
Tax Avoidance De Jour
Why Corporation Inversions are all the Rage
Wiki – Corporate Inversions
Let’s Call Corporate Inversions What they actually are
Durbin Bill to Target Corporate Inversions

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