Sometimes the smartest investment a Wall Street billionaire can make is in our pay-to-play political system. That’s why legendary wheeler-dealer Carl Icahn plans to fund a campaign to promote a huge corporate tax cut — one that could personally enrich him by up to $440 million (and maybe more). With that kind of payoff, the $150 million Icahn’s investing in a Super PAC to secure the tax giveaway is a good gamble. But if he wins, the rest of us lose.
Icahn’s plan would benefit a small band of American mega-corporations stashing over $2 trillion in profits offshore — profits on which they owe $600 billion in U.S. taxes, according to Citizens for Tax Justice. His Super PAC will support candidates who pledge to cut that corporate tax bill by hundreds of billions of dollars.
The biggest beneficiary would be Apple, which holds almost 10 percent of the untaxed overseas corporate loot. And one of the biggest stockholders in Apple is — surprise! — Carl Icahn. If Icahn’s Super PAC buys enough support in Congress to pass the kind of tax giveaway he’s proposing, Apple alone could save up to $50 billion. And depending on how Apple decides to distribute this generous gift among its shareholders, Icahn could personally pocket up to $440 million.
But that would almost certainly not be the end of his payday. As a long-time Wall Street player and one of the richest men in America, Icahn has a stake in lots of other companies that hide their profits offshore, and he would enjoy a fat payoff if his tax-cut plan goes through.
Icahn’s savvy political investment is just a particularly blatant example of what goes on every day in Washington: the wealthy and well-connected write the rules to make a quick profit at the expense of the rest of us. The hundreds of billions of dollars they swallow up in tax breaks could instead be used to build schools, repair roads and bridges, reduce student debt and ensure a secure retirement for all Americans.
Working families will only begin to feel as though they’re getting a fair shot in today’s economy when Congress starts listening to them instead of the billionaires, Super PAC’s and corporate lobbyists.
One good place to start that kind of common-sense reform would be to collect the full amount of tax due on those trillions of dollars of offshore corporate profits. The only reason the tax bill has gone uncollected up to now is because of a lobbyists’ loophole called “deferral.” It allows corporations to indefinitely defer paying their U.S. taxes on profits made — or that can be manipulated to look as though they were made — in foreign countries.
Ironically, Icahn claims that he’s pursuing his plan for altruistic purposes: he wants to end an epidemic of corporate “inversions,” another tax-code trick that essentially allows American corporations to dodge their taxes by changing their address to an offshore location, usually a tax haven. But a recent letter to Congress from two dozen international tax experts demolished the idea that we have to essentially bribe corporations with huge tax cuts not to abandon their country. American corporations are raking in record profits — they don’t need a boost from Uncle Sam, one all the rest of us would have to pay for.
A successful investor for half a century, Carl Icahn knows where to put his money. And right now our political system is so receptive to the whims of the wealthy and so deaf to the needs of working people, he knows his best investment is in pushing that advantage even further.
But instead of enacting even more corporate tax giveaways, Congress should start closing corporate tax loopholes. Then we would have the public revenue we need to make the most important investment of all: an investment in America.
This blog post also appeared on the Huffington Post.