By Morgan Currier
In today’s news highlights, Romney Hood strikes from the poor and gives to the rich, we talk about the budding, and long overdue irrelevancy of Grover Norquist, and the secrets behind corporate tax loopholes are revealed.
New Yorker, John Cassidy, 8/7/2012
During a campaign stop in Stamford, Connecticut, on Tuesday morning, President Obama said Mitt Romney’s tax plan amounts to another big tax cut for the rich financed by tax hikes for less-wealthy Americans: “It’s like Robin Hood in reverse,” he said. “It’s Romney Hood.”
The President wasn’t talking off the top of his head, though. In attacking Romney’s proposal to cut tax rates across the board and scale back some popular tax breaks, he and his campaign are citing a new study I also mentioned yesterday, from the Tax Policy Center, a non-partisan Washington research institute. The study clearly says that Romney’s plan would leave wealthy Americans considerably better off. According to the three economists who authored the report, those lucky folks earning a million dollars a year would end up taking home an extra eighty-seven thousand dollars in income. By contrast, taxpayers earning under two hundred thousand dollars a year would be hit with a tax increase of five hundred dollars. And those figures are calculated on the assumption that a Romney administration would eliminate many of the tax loopholes enjoyed by the rich. If that didn’t happen, the report says, a Romney Administration would have to take even more money from ordinary Americans.
As you might expect, the Romney camp has dismissed the study as a partisan attack, calling it “another biased study from a former Obama staffer that ignores critical parts of Governor Romney’s tax reform program, which will help the middle class and promote faster economic growth.”
Think Progress, Travis Waldron, 8/6/2012
Another Republican candidate has refused to sign the radical anti-tax pledge authored by activist Grover Norquist and pushed by his group, Americans for Tax Reform. The pledge has played a major role in the GOP’s tax intransigence over the last several years.
Republicans who disavow the pledge, however, are growing in number, and New Jersey state Sen. Joe Kyrillos (R), who is running against Sen. Bob Menendez (D) this year, has joined the list. Asked on Fox News this afternoon if he would sign Norquist’s pledge, Kyrillos said bluntly, “I don’t sign pledges”:
Though it’s a positive sign that Kyrillos is rejecting Norquist’s pledge, his insistence on opposing broad-based tax increases still runs counter to a “wide consensus” among economists that the U.S. will need to increase tax rates to reduce its debt in the future.
Wilson County News [Floresville, TX], Scott Klinger, 8/7/2012
The GE offshore tax loophole is, as the official name says, an exception to the rule. It blesses the very sort of manipulations that the tax code seeks to avoid. It is one of the principle reasons General Electric reported an effective tax rate of just 1.8 percent over the last decade, according to Citizens for Tax Justice. When one of our nation’s most powerful corporations pays an effective tax rate of less than 2 percent, you know our Treasury has a giant hole in it.
The “Active Financing Exception” is also widely used by banks and is one of the reasons the banking industry has one of the lowest effective tax rates among all industry groups. There is no excuse for extending a loophole that allows banks to pay lower effective tax rates than small businesses and working Americans who bailed out the banking industry.
The Apple offshore tax loophole also creates an exception to the normal tax rules. When a consumer purchases a song recorded by an American artist in a Los Angeles studio from iTunes, that transaction most likely is booked in Ireland, before the funds make their way to another tax haven country like Luxembourg after a brief stop in The Netherlands. This loophole allows Apple to have amassed more than $23 billion in offshore accounts, all of which is untaxed in the U.S.
It’s never right to give tax giveaways to prosperous corporations that reward them for using clever accounting gimmicks to ship jobs and investments offshore. It’s even more irresponsible at a time when millions of Americans need jobs and we are cutting government budgets for education, public safety, transportation infrastructure, research and other services and investments we need for a strong economy.