Stephanopoulos Stumps Fiorina On Corporate Tax Loopholes
Stephanopoulos Stumps Fiorina On Corporate Tax Loopholes
On This Week yesterday, McCain economic adviser Carly Fiorina restated her support of tax loopholes for big business. Fiorina, the former CEO of Hewlett Packard, has been a long-time defender of a gap in the U.S. tax code that enables American corporations to keep foreign profits overseas and abstain from paying domestic taxes.
The Wonk Room, which covered Fiorina’s preference for corporate tax breaks and offshoring back in April, wasn’t really surprised to hear her defending McCain’s stance on George Stephanopoulos’ show. But we were a little surprised to see how easily George was able to point out the flaw in her logic — and how transparently disingenuous Fiorina’s talking points really are.
Watch it:
Sen. McCain, according to Fiorina, understands that “you must focus on why jobs are going overseas.” That may be well and good, but what Fiorina seems to be missing, and what George points out, is that there are two separate issues. A cut in the corporate tax rate is not the same as closing a tax loophole — a tax loophole that allows business profits to remain completely untaxed if left overseas.
Even under Senator McCain’s plan, corporations would still pay 25 percent (down from 35 percent) on money they bring into the country — and that is a lot more than the zero that they pay now. As Stephanopoulos noted, this zero percent does nothing to incentivize businesses, or government defense contractors, from bringing profits back into the US.
Transcript:
STEPHANOPOULOS: And senator McCain has come out for cutting the corporate tax rate, yet he still wants to preserve this tax break for keeping profits overseas. Why is that right?
FIORINA: Well, I think first of all, senator McCain understands that you must focus on why jobs are going overseas. There are really two issues. One as I said, the tax rate that we have in place today. The other is education and worker retraining, another area, for example, where John McCain differs from President Bush. He said a year ago, let’s take our unemployment insurance programs, let’s reform them. Let’s make sure that when workers lose their jobs because of globalization, for example that we just don’t leave them behind. That we don’t just pay them while they’re unemployed, that we prepare them.
STEPHANOPOULOS: I understand that he’s called for that, but why is he for preserving the tax break for keeping profits overseas?
FIORINA: Well describe for me the tax break that Obama feels is being maintained for companies who leave profits overseas. There is not an incentive today—I can tell you as a CEO, you don’t get a tax break for leaving profit overseas. What you get—
STEPHANOPOULOS: You get to defer the taxes on those profits as long as they stay overseas. That’s what he wants to take away—
FIORINA: That’s exactly the point. If the tax rate were lowered on businesses in this country, businesses would bring money back. The reason they cannot bring money back is because the tax rate is so onerous –
STEPHANOPOULOS: Not if they can pay no taxes for leaving them overseas; [Fiorina stutters] which is the way the law is right now.
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4 Responses to “Stephanopoulos Stumps Fiorina On Corporate Tax Loopholes”
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She is just another reich wing talking head who does not care for the average American worker who has to shoulder more and more of the tax burden while inflation sky rockets and our standard of living goes down.She is showing how out of touch the reich wing is, we all know that corporations off-shore profits and that drives down wages down along with FREE TRADE policy`s that haven`t worked for almost thirty years.
May 12th, 2008 at 5:28 pm1. The effective tax rate on corporate profits in the United States is actually one of the lowest in industrialized nations.
2. The ability to place profits in tax sheltered companies outside the United States actually constitutes an improper sheltering of profits overseas. In most cases, there is absolutely no economic justification for incorporating the shell company other than tax evasion.
3. Many times the companies will actually transfer technical data and patents to the offshore shell company. This is leased back to the US company at exorbitant prices (especially with government contractors) to shelter US profit.
4. Merely retraining workers will not offset the desire to offshore work. This is labor arbitrage, pure and simple. First the manufacturing goes, next the supporting engineering, then the design engineering. I have been in aerospace, you end up losing your ability to compete in that technology.
5. The US has really failed to develop really new products. Think of robotics, the technology was developed in the US but not exploited by US companies. Japanese companies ran with the ball and dominated the field. Today, European companies still maintain high tech manufacturing industries as do some of the more advance Asian countries. China is certainly trying to go that way. An advanced nation maintains its lead by developing products that may be sold at a substantial margin because it is new, better quality and sufficient to maintain the work force in the manufacturing country.
6. The continue outsourcing of manufacturing, engineering and other activities merely deprives the home country of a market for such skills. Eventually, the ability of the country to compete is reduced. Those US companies will find themselves replaced by or moving to those foreign countries that do the manufacturing and product development. Eventually, the investors in the US companies will lose control and a majority of their investment.
May 12th, 2008 at 8:10 pmRight, so lower the tax to zero for bringing money back into the country and raise the tax for leaving it outside. Is this so hard?
May 13th, 2008 at 11:43 amWhere’s the video?
October 23rd, 2008 at 6:32 pm