Opposition to President Obama’s plans to close the fiscal loophole of Tax Haven’s is under increasing pressure from business, lobbyists, and the media. You can be sure many Senators and Congressmen, worried about their campaign contributions in the run up to 2010, will be conveying this sense of alarm to the President.
Bloomberg ran with a story this morning, quoting some very influential Democrats:
Senate Finance Committee Chairman Max Baucus, a Montana Democrat, called for “further study” of Obama’s proposals within minutes of the president’s announcement yesterday. Representative Joseph Crowley, a Democrat on the tax-writing House Ways and Means Committee, said he’s wary because the tax changes would hurt Citigroup Inc., his New York district’s largest private-sector employer.
Natalie Ravitz, a spokeswoman for Senator Barbara Boxer, a California Democrat, said that any tax overhaul should not lead to “unintended consequences.”
Other Democrats, including House Ways and Means Committee Chairman Charles Rangel of New York, support the proposal. Some lawmakers, including Iowa Senator Charles Grassley, the ranking Republican on the Senate finance panel, are still weighing the plan.
This latest attack follows a lot of negative, primarily republican generated, commentary since last Monday, including the expected outrage from the Republican caucus and their media friends (particularly Fox). One of the most telling, however, was a seemingly innocent comment from CNBC’s Erin Burnett, during an interview on Morning Joe last week. She said:
Everyone likes to say American companies tax dodge, and no doubt they do, and the tax system could use massive reform, I don’t think anyone would debate that, but the average tax rate paid by American companies…as of last year, it was right up around 30-plus percent. They are supposed to pay 35%. The average in other countries is significantly lower. So that is something to think about when people talk about tax avoidance by major U.S. companies.
To Ms Burnett, and all of the other people who think that tax avoidance is perfectly acceptable, I’ll share another quote that I discovered while following this story – posted on a discussion thread
“My Lords, of recent years much ingenuity has been expended in certain quarters in attempting to devise methods of disposition of income by which those who were prepared to adopt them might enjoy the benefits of residence within this country while receiving the equivalent of such income without sharing in the appropriate burden of British taxation. Judicial dicta may be cited which may point out that, however elaborate and artificial such methods may be, those who adopt them are “entitled” to do so. There is, of course, no doubt they are within their legal rights, but that is no reason why their effort, or those of the professional gentlemen who assist them in the matter, should be regarded as a commendable exercise of ingenuity or as a discharge of the duties of good citizenship.”
Lord Simon, L.C., Latilla v Inland Revenue Commissioners (1943)