McCain: Advisers’ Companies Had ‘No Evasions Or Escapes’ From Their Taxes
McCain: Advisers’ Companies Had ‘No Evasions Or Escapes’ From Their Taxes
Yesterday on the Situation Room, McCain defended the tax practices of the companies of his economic advisers:
…[I]f you talk to the CEO of FedEx, Fred Smith, if you talk to the CEO of Cisco, John Chambers, you talk to Meg Whitman, former CEO of eBay, you know what they’ll tell you? They’ll tell you they pay their full 35 percent…they’re paying 35 percent full freight, no evasions or escapes from the taxes. They’re paying full freight, and they’ll show you their tax returns.
Watch it:
What McCain didn’t mention is that at least two of the companies of his advisers, Fred Smith’s FedEx and Hewlett Packard under former CEO Carly Fiorina, have a history of massive tax evasion.
A 2007 investigation by the IRS found that FedEx owed $319 million in back taxes from 2002 by misreporting its employees as independent contractors. Just yesterday this full penalty was withdrawn on appeal, but an investigation is continuing into their tax returns for 2003-2006. Lawyers for the drivers insist that FedEx could owe up to $1 billion in back taxes.
Similarly, as CEO of Hewlett Packard, McCain adviser Carly Fiorina deferred taxation on $14.4 billion by keeping it offshore. This lowered Hewlett-Packard’s effective tax rate from 35 percent to 12 percent.
America collects only 2.2% of its GDP in corporate taxes because of loopholes, shelters and giveaways, compared to 4% in Ireland (which McCain frequently touts for its 11% corporate tax rate).
Rather than closing the loopholes that let his economic advisers’ companies dodge millions in taxes, McCain’s tax plan would have let them to pay even less: saving FedEx $260 million in taxes and HP $250 million had his tax plan been effect in 2007.
One Response to “McCain: Advisers’ Companies Had ‘No Evasions Or Escapes’ From Their Taxes”
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“We tried a windfall profit tax, back during the days of Jimmy Carter, okay. We tried it and it didn’t work.” It didn’t? How so? And why?
How about “trickle down economics.” Haven’t we tried that before too? How’d it work?
McCain seems to have difficulty understanding the difference between theory and practice. He shows this every time he makes the leap from corporate tax savings to job growth in America. And it is a drastic oversimplification to call our corporate tax rate 35%. It is not the whole story, Mr. McCain. He tends this clip saying, “It is simple, fundamental economics.” If i had made these types of arguments in my ECON classes in college, I would have failed. Miserably.
October 23rd, 2008 at 5:36 pm