The Corporate Fellatio Continues: Congress sets to make tax loopholes permanent

Posted on May 5, 2014


Republicans in the House are getting ready to grease the skids to make a series of tax breaks and loopholes permanent that only benefit the super-wealthy and their corporations they own. They don’t intend to offset them by closing other loopholes or raising rates; no sensible cost-cutting; none of the “dollar-for-dollar” demands they put into place when they blackmail America to get what they want. This is a case study in how the game is fixed and the rules are rigged – against you, me and anyone else who isn’t taking home millions of dollars per month, or week.

This week, the Republicans in the House Ways and Means Committee are going to demonstrate just exactly how corrupt and in service to the rich they are. Beginning on Tuesday, the committee will mark up a series of bills on corporate tax breaks – known as “extenders” because they have been extended regularly every year or two for over a decade. Only now the Committee plans to make a wide variety of these corporate welfare handouts permanent, at the cost of an estimated $300 billion over the next 10 years. And they don’t plan to pay for them by closing other corporate loopholes or raising any tax rates. These blatant cash giveaways will simply be added to the deficit — you know, the tactic that these same Republicans scream bloody murder about when a non-Republican attempts to do so. And there isn’t the slightest shred of doubt as to who will be voting their support — only to turn around and demand demand deeper cuts in social programs to get “Obama’s reckless spending” under control.

The measures span the chasm from sensible to insane. Two centerpieces are glaring loopholes for multinational companies and banks, literally encouraging them to ship jobs and report profits overseas to avoid an estimated $80 billion in taxes over a decade.

One scam is known as the “active finance exception,” and the other as the “CFC look-through rule.”  But you can safely call them “yet another round of Republicans giving blowjobs to corporate fatcats. The loopholes allow multinational companies with huge finance divisions, such as General Electric, Exxon Oil, and J.P. Morgan Chase banks, among others, to dodge paying their fair share of taxes simply by claiming that domestic financial income is being generated offshore. These “exceptions” are central to how GE managed to declare a profit of more than $27 billion over the past five years, while not only paying nothing in taxes, but pocketing more than $3 Billion in tax refunds. The multi-billion dollar multinational pays less in taxes than any mom and pop store that turned a profit. These breaks don’t pass the smell test. But their supporters and defenders will still point to the 35% base tax rate as being an outrage, while conveniently ignoring the 1% to 12% *EFFECTIVE* tax rate these companies actually pay — after all their deductions, credits, subsidies and loopholes are factored in — when they ever actually pay at all.

Making these permanent without offsetting them by closing other loopholes is a kick in the crotch to American voters who’ve been bald-faced lied to by Republicans who rant incessantly about deficits, forcing austerity budgets that have slowed America’s economic recovery and cost hundreds of thousands of jobs. For the first time, Republicans even refused to pass emergency unemployment compensation to long-term unemployed workers unless it was “paid for” by cuts elsewhere. Then, even after the Senate passed the measure with “pay-fors,” Republican House Speaker John Boehner still refuses to allow it to come to a floor vote, calling unemployment benefits “a handout that America simply cannot afford. Emergency unemployment compensation is temporary, targeted and timely. It goes to sustain the families of unemployed workers who are still looking for work. It is of limited duration. And the families that receive it spend it immediately on food, rent, gas – helping to boost jobs and the economy. And it can’t get a vote on the floor of Congress. The offshore tax dodges that the Committee is pushing aren’t emergency measures. They aren’t “situational strategy.” They aren’t even necessary. What they are is billions of dollars, funneled directly and intentionally into the pockets of corporations and their executives.

Republicans tell us we can’t afford unfunded unemployment benefits to the poorest Americans, but we *CAN* afford FOUR TIMES THE COST of unemployment benefits in gift-wrapped handouts to the richest Americans.

In a Congress supposedly locked in hapless partisan gridlock, these bills are priced to pass – meaning the right amount of money is going into the lawmakers’ pockets to make sure even more money goes into the pockets of their corporate whoremasters – fully and eagerly backed, of course, by all the brigades of corporate lobbyists in Washington. And mark my words, within a week, you’ll see Boehner, Mitch McConnell, Paul Ryan and all the other bought-and-paid-for Republican whores standing behind a podium, with a straight face, defending this latest round of blatant corporate welfare because it’s masked by the legitimate beneficial bills they’ve attached their barnacles to —  a deduction for schoolteachers who pay for supplies out of their own pockets, a tax break for employees that ride mass transit to work, a tax relief for families taking a loss from selling a home with an underwater mortgage, a production tax credit for renewable energy. And if you combine the financial benefit from all of those bills, it doesn’t add up to even ONE-FIVE-HUNDREDTH of the amount the Wall Street crowd will take home. That’s what Republicans call “good, responsible government.”

But, this time, we have an opportunity to force big business to pay a big price. Elizabeth Warren is right: Americans are increasingly onto the game. As polling for Americans for Tax Fairness has shown, voters are outraged that corporations and the wealthy aren’t paying their fair share of taxes. They are incensed at the notion that Congress is giving multinationals incentives to ship jobs or report profits abroad. Or that Wall Street banks are paying lower tax rates than small businesses.Even the ever-orange Boehner will flinch when trying to explain how unemployed workers can’t be helped but multinationals need permanent loopholes to stash even more of their earnings abroad. Even Ryan will find it hard to justify deeper cuts that boot kids out of Head Start or cuts to Pell grants for college in order to make up for deficits produced by rewarding General Electric for stashing profits in the tax-free Cayman Islands.

This is an election year and a lot of voters are just plain pissed off mainly because we’re sick of being pissed on, and sick of watching people who can’t manage to work a 40-hour week continue to screech about the evils of education, Social Security, Food Stamps, unemployment compensation, basic health care and one-voter/one-vote.

Republicans are stacking the deck. And America is sick of watching them deal from the bottom.