Senator Levin’s Irresponsible Tax Approach

Robert Hoffman photo

When it comes to identifying policymakers who will champion bipartisan, constructive approaches to fix our outdated, broken tax system and help U.S. companies to innovate, compete and create jobs, don’t count Senator Carl Levin among them.

For several years, Senator Levin has used his position as Chair of the Permanent Subcommittee on Investigations to conduct a campaign to embarrass American companies for doing what any responsible business does every year:  pay the taxes they legally owe, enabling them to invest more in strengthening American innovation and creating American jobs. 

Senator Levin’s Subcommittee will continue its misbegotten adventure with a hearing next week focused solely on Apple.  Fortunately, while Mr. Levin takes this combative approach, Democrats, Republicans, businesses, and civil society leaders are collaborating to create a better, more modern tax system.  In April, Senate Finance Committee Chairman Max Baucus, D-Mont., and House Ways and Means Committee Chairman Dave Camp, R-Mich., announced a set of reform principles that they jointly developed after more than 50 hearings and thousands of hours of analysis and deliberation. 

That’s real leadership that offers real hope for stronger economic growth.

The system is broken.  Instead of bashing great American success stories like Apple, it would be far more productive for Senator Levin to work with his colleagues, Chairmen Baucus and Camp, and come up with a modern tax system that frees up U.S. companies to rely less on lawyers and invest more in innovators.

When it comes to corporate tax reform, Msrs. Baucus and Camp want to level the playing field for U.S. businesses that are facing serious foreign competition:

 

The current U.S. corporate tax rate is the highest in the world.  Yet in recent years, some of America's largest corporations have paid zero tax.  The current system picks winners and losers and puts the U.S. companies at a disadvantage in the global economy, a situation that hurts job creation. Tax reform must make our companies more competitive in the global economy.

…..

There are skeptics who question the prospects for bipartisan tax reform.  We know we face some fierce headwinds.  People from across the spectrum are trying to turn tax reform into a political weapon, which could end up killing any chance at success.

We can't let that happen.  Tax reform can't be about politics.  It has to be about the people we serve, about boosting the economy, about creating jobs in Montana, Michigan and across America.  It has to be about restoring some trust in the process of government.

 

Again, that’s real leadership, and certainly not the kind of message we will hear from Senator Levin. Amazingly, he faults U.S. global companies for using resources to minimize their tax burden, while “edging right up to the legal line.”  Ask any head of a household if he or she does the same thing before April 15.  We all scramble for deductions to reduce our tax bill.  Ask company shareholders – the real owners of a company – and employees how they would feel if their corporate executives sought to pay the lowest taxes legally possible while investing in their wages, in new R&D, and in new manufacturing.  All would agree:  It’s the responsible thing to do.

Perhaps Senator Levin should ask Apple’s executives this question:  Would you rather hire a creative product developer or a savvy tax lawyer?  The answer will be the product developer, hands down.

Our industry has stepped forward with ideas.  The U.S. needs a modernized tax structure that will help America’s companies to create jobs and new opportunities here at home.  To remain a step ahead of our rivals for jobs and investment, America needs a competitive, market-based tax structure with a lower rate that encourages U.S. innovation.  Experts agree that this approach would make U.S. companies more competitive, boost wages here at home, and encourage U.S. companies to bring their foreign earnings home.  Just reducing the corporate rate to 25 percent would create an average of 581,000 jobs each year for the next ten years.  That’s a real solution, with real jobs and higher take-home pay as a result. 

Next week’s hearing should be about responsibility:  The responsibility of business executives to minimize tax burdens for the good of their shareholders and co-workers, and the responsibility of policymakers to fix a broken tax system for the good of their constituents and country.  Sadly, that’s not the hearing we are likely to see.

Back
Share this post on:
5 comments
  • Accountancy + Business Advice Centre LTD Thu., November 28, 4:03 AM
    Excellent information because good record-keeping and accounting are key to the proper management of any business, but they are only the first stages in running a successful business.
  • Sam Sat., October 5, 7:56 PM
    I am extremely dieoappintsd in HR 627, which is misleadingly hailed as the Credit Cardholders Bill of Rights. First off, I am one of those people who have been hit in the past couple of years with usury rates that came out of nowhere. I always paid on time and paid way more than the minimum. But the banks that we bailed out saw fit to raise my interest rates to 29% just because they knew they could get away with it.My disappointment is due to the fact that this bill actually does VERY little to give relief to cardholders. It does NOT cap rates or fees. It explicity ALLOWS rate increases if a cardholder is late for 30 days or fails to comply with a workout agreement. So, for those who are already in financial trouble this bill gives the banks the blessing of high rates. If you're already having trouble, the bill will more than likely increase the likelihood that the cardholder will default even further, and probably will have to file bankruptcy. Thanks for nothing.This bill gives no relief at all for those of us who have fulfilled out contract only to be hit with the higher interest rates. I always used to pay a lot more than the minimum. Now it is impossible because when the rate was raised, so was the payment, and now most of the payment goes to interest instead of principle.Yes, it requires companies to give 45 days' notice, but banks were already doing that. The outcome is the same. Unless you can pay off your account in that time, you will have to pay the higher interest rate. Most people can't afford to pay the balance off in 6 weeks. If they could, they wouldn't be carrying the balance. Transferring is not always an option, especially with the tighter credit regulations, and even if you do transfer, after the introductory period is over, you're right back to that usury rate.The bill does prevent card companies from increasing interest on existing card balances. But it won't take effect for so long, that most companies will get those rates raised before it takes effect. And again, for those of us who have already been mugged by these companies, there is no relief for us at all.It limits to 3 the number of over-the-limit fees the company can charge for the same transaction. Why not cap that charge to one, since it's ONE transaction? Also, many times it's the company's interest charges being applied that cause the account to go over limit, and the cardholder still gets burned. There is NO protection against this practice.Supposedly stops the pay to pay practice such as charges for phone payments and same day payments. I've been hit with these. But frankly, a ${esc.dollar}10.00 payment fee pales in comparison to an extra ${esc.dollar}200.00 in interest EVERY month!Barring the issuance of cards to minors is a good thing and way overdue. There are other aspects of this bill that are helpful, but they are very minor when one understands that the extremely high interest rates are the major problem.The Senate and House need to get real and cap the interest rates. Maybe when we start seeing 50% or more rates they'll do something. Yeah, right. http://jerymtg.com [url=http://hgbstk.com]hgbstk[/url] [link=http://mzyknrfzbyz.com]mzyknrfzbyz[/link]
  • Chriss Wed., October 2, 12:49 PM
    Well here's a fucking news-flash for you frank - those fdroeems come from God anyway, not some lame-ass congressmen or democrap (redundancy check).What an arrogant POS. Watch for this a-hole to "correct" himself tomorrow.It's already written in the Declaration Of Independence that we are "endowed by our Creator" with certain liberties such as "life, liberty, and the pursuit of happiness" and those same things are guaranteed by the Constitution.So Frank - kiss my ass! They don't need your "permission" asshole!
  • Open Wed., October 2, 6:18 AM
    I am extremely dppeisointad in HR 627, which is misleadingly hailed as the Credit Cardholders Bill of Rights. First off, I am one of those people who have been hit in the past couple of years with usury rates that came out of nowhere. I always paid on time and paid way more than the minimum. But the banks that we bailed out saw fit to raise my interest rates to 29% just because they knew they could get away with it.My disappointment is due to the fact that this bill actually does VERY little to give relief to cardholders. It does NOT cap rates or fees. It explicity ALLOWS rate increases if a cardholder is late for 30 days or fails to comply with a workout agreement. So, for those who are already in financial trouble this bill gives the banks the blessing of high rates. If you're already having trouble, the bill will more than likely increase the likelihood that the cardholder will default even further, and probably will have to file bankruptcy. Thanks for nothing.This bill gives no relief at all for those of us who have fulfilled out contract only to be hit with the higher interest rates. I always used to pay a lot more than the minimum. Now it is impossible because when the rate was raised, so was the payment, and now most of the payment goes to interest instead of principle.Yes, it requires companies to give 45 days' notice, but banks were already doing that. The outcome is the same. Unless you can pay off your account in that time, you will have to pay the higher interest rate. Most people can't afford to pay the balance off in 6 weeks. If they could, they wouldn't be carrying the balance. Transferring is not always an option, especially with the tighter credit regulations, and even if you do transfer, after the introductory period is over, you're right back to that usury rate.The bill does prevent card companies from increasing interest on existing card balances. But it won't take effect for so long, that most companies will get those rates raised before it takes effect. And again, for those of us who have already been mugged by these companies, there is no relief for us at all.It limits to 3 the number of over-the-limit fees the company can charge for the same transaction. Why not cap that charge to one, since it's ONE transaction? Also, many times it's the company's interest charges being applied that cause the account to go over limit, and the cardholder still gets burned. There is NO protection against this practice.Supposedly stops the pay to pay practice such as charges for phone payments and same day payments. I've been hit with these. But frankly, a ${esc.dollar}10.00 payment fee pales in comparison to an extra ${esc.dollar}200.00 in interest EVERY month!Barring the issuance of cards to minors is a good thing and way overdue. There are other aspects of this bill that are helpful, but they are very minor when one understands that the extremely high interest rates are the major problem.The Senate and House need to get real and cap the interest rates. Maybe when we start seeing 50% or more rates they'll do something. Yeah, right. http://gluhrylmc.com [url=http://wekvaexiqvz.com]wekvaexiqvz[/url] [link=http://wxhzdrucvy.com]wxhzdrucvy[/link]
  • Jester Tue., October 1, 5:45 AM
    Chris,If you read some of the comments poestd over at CW Memory regarding that painting you'll realize that if you do not subscribe to their superior worldview then you are clearly an anti-intellectual who goes to those heinous tea parties.The comment about the painting that struck me the most was, You should be offended as a Christian and as a thinking being. Should I? As a believer, am I so stupid that I need to be told what I should think? Is there something so inherently disgusting about believing that God is at the very least concerned about what happens in America legitimate cause for people to be afraid for their country?How depressing
  • heera Thu., May 16, 2:06 PM
    I like .
(HTML not permitted)
Captcha
* - Required