Friday, May 15, 2015

CORPORATE OFFSHORE TAX EVASION AFFECTS THE WHOLE WORLD

(Wake up Puerto Rico!! Our similar  situation is what is destroying our island!)

mj  -----------------------------

Unholy mess as $300 million tax scandal plays out across Sydney, Australia.

It's the product of a seven-year investigation by the inter-agency Project Wickenby, which targets international tax avoidance schemes.

"This is the worst case I have come across in my entire career," Justice Nye Perram said during the preliminaries for a costs hearing in the Federal Court in February, of a five-year legal battle over who owned a series of offshore companies that had escaped paying Australian tax.

Justice Perram ordered copies of his December 2014 judgment in the case to be sent to the Director of Public Prosecutions, the Australian Securities and Investments Commission and the Australian Federal Police.


He concluded a scathing judgment: "The facts I have found strongly suggest widespread money laundering, tax fraud of the most serious kind and, possibly in some instances, insider trading. The conduct revealed in this case is disgraceful."


Monday, May 11, 2015

THE KEY TO PUERTO RICO STATEHOOD - THE COSTAS AMENDMENT


At our request, Attorney Roberto Santana, author of the Puerto Rico Statehood Bill "The Puerto Rico Admission Act", has included Section 16, which will serve as a factor in our desire to negotiate with CFC (Controlled foreign Corporations) and other interest groups that lobby intensively  against statehood for Puerto Rico, being the biggest obstacle that exists against statehood.

This amendment which we have named "The Costas Amendment" in honor of Attorney Luis Costas Elena, author of the studies and Thesis presented at Harvard in 1974,  who brought to light this tax scheme that has been the biggest obstacle to achieving statehood for Puerto Rico.

After  more than 25 years impacting the media and Congress, we have managed to raise awareness of the abuse of these corporations with the people of Puerto Rico and our right to become a state of the Union,

Given the situation this is currently being reviewed in the US Congress with the "Tax Reform Act" where it appears that there are plans to eliminate those benefits, the time is ripe for negotiating with these, our worst enemies, who have an army of powerful lobbyists battling against anything to do with statehood.  There is a saying, "If you can't beat them, join them" so we invite them to become our allies using their very powerful lobbyists to help us achieve statehood NOW.

HOW? The Costas Amendment" in the Statehood Admission Bill !  A 20 year tax break....

This is almost essential, since these companies and interest groups exercise strong political power over both political parties of Puerto Rico, so they support the no-tax benefits, which in turn is the backbone of the colonial status of Puerto Rico.

The golden key and our most powerful weapon to achieve Statehood is our weapon of negotiation: "THE COSTAS AMENDMENT".

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TAXATION
Section 16
            Upon the effective date of the Admission of the Commonwealth of Puerto Rico as the 51stState of the Union, those individuals and corporations then currently enjoying tax status and tax benefits existing under Puerto Rico Income, Gift and Estate Tax Statutes and the U.S. Internal Revenue Code on that date, shall continue in that status and with those benefits for a period of twenty (20) years from that effective date of Admission. The U.S. Internal Revenue Service shall promulgate such Rules and Regulations as may be deemed necessary and/or convenient in order to carry out this Statutory Provision. 

LA LLAVE A LA ESTADIDAD: "THE COSTAS AMENDMENT"

A petición nuestra, el Lic Roberto Santana, autor del Proyecto "The Puerto Rico Admission Act", ha incluido la Sección 16, que nos servirá de negociación con las empresas foráneas y otros grupos de interés que cabildean intensamente en contra de la estadidad para Puerto Rico, siendo eso el obstáculo mayor que existe en contra de la estadidad.

A esta enmienda le llamaré "The Costas Amendment" en honor al Lic. Luis Costas Elena, autor de los estudios y de la Tesis presentada en Harvard en el 1974, y quien sacó a la luz pública este esquema contributivo que ha sido el mayor obstáculo al logro de la estadidad para Puerto Rico.

Con un esfuerzo de mas de 25 anos de lucha en los medios y en el Congreso, hemos logrado levantar conciencia en los EEUU. del abuso de estas corporaciones con el pueblo de Puerto Rico y nuestro  derecho a constituirnos como un estado de la Union, 

Ante la situacion que se les presenta actualmente en el Congreso, con el "TAX REFORM ACT" donde se proyecta eliminar esos beneficios, el momento es propicio para que en vez de ser nuestros peores enemigos  con su ejército de cabilderos poderosos batallando en contra de la estadidad, se conviertan en nuestros aliados utilizando sus mismos poderosos cabilderos para que logren la ESTADIDAD AHORA. 

Esto es así, particularmente por el poder político que ejercen estas empresas y grupos de interés sobre ambos partidos politicos de Puerto Rico para que TODOS respalden los beneficios contributivos anti-estadistas que sostiene el estado colonial de Puerto Rico e impide la estadidad.

La llave dorada y nuestra arma mas poderosa para lograr ESTADIDAD AHORA es nuestra arma de negociación: "THE COSTAS AMMENDMENT".

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TAXATION

Section 16
            Upon the effective date of the Admission of the Commonwealth of Puerto Rico as the 51stState of the Union, those individuals and corporations then currently enjoying tax status and tax benefits existing under Puerto Rico Income, Gift and Estate Tax Statutes and the U.S. Internal Revenue Code on that date, shall continue in that status and with those benefits for a period of twenty (20) years from that effective date of Admission. The U.S. Internal Revenue Service shall promulgate such Rules and Regulations as may be deemed necessary and/or convenient in order to carry out this Statutory Provision. 

Saturday, May 9, 2015

Opposition Grows Against The Offshore Corporate Tax Evasion Scam

Proposal Would Block Inverted Companies from Receiving Government Contracts
CENTER FOR EFFECTIVE GOVERNMENT
by Jessica Schieder, 5/8/2015

Corporations that have reclassified themselves as “foreign-owned” received approximately $1 billion in federal contracts over the last five years. These companies profit from American tax dollars despite avoiding U.S. taxes themselves.
That could soon change. Two members of Congress have reintroduced  legislation that would block these companies from winning lucrative government contracts.

Inversions by federal contractors are particularly egregious because many of the companies continue to operate in the United States and benefit from taxpayer-funded public goods.

Rep. Rosa DeLauro (D-CT), lead sponsor of an inversion reform bill, said in a recent press release:
These companies take advantage of our education system, our research and development incentives, our skilled workforce, and our infrastructure, all supported by U.S. taxpayers, to build their businesses. But when the tax bill comes due, they hide overseas. Yet suddenly, when federal contracts are being applied for, they are all as American as Uncle Sam once again. This has to stop.
Inversions allow corporations to lower their tax bills by merging with a foreign company and then adopting the foreign company’s corporate registration, often in low-tax jurisdictions. In many cases, these restructurings are much more significant on paper than they are in practice. For example, companies are often able to restructure without moving their headquarters. Aside from having to pay less in U.S. taxes on their profits, inversions also allow corporations to escape unpaid (deferred) taxes on profits that they’ve been able to accumulate offshore over the course of many years.
American corporations that reincorporate offshore will cost the United States approximately $20 billion in lost tax revenue over the next decade. Bloomberg calculated that even as corporate tax rates have fallen, corporations reincorporating offshore have been able to lower their effective tax rates even further. Corporations that reincorporated abroad in recent years were able to reduce their effective tax rate by between 6.6 and 17.4 percentage more than their competitors that remained incorporated in the United States. Despite the fact that the vast majority of these companies continue to operate in the U.S., they are able to avoid paying their fair share in taxes, leaving Main Street businesses and individuals to pick up the tab.
Companies with the most profits held offshore have arguably the highest incentives for restructuring as foreign corporations. The recent reincorporation of Medtronic, the Minneapolis medical device maker, in Ireland is an example. Before reincorporating abroad, Medtronic was able to shift more than $1 billion in profits offshore. When it reincorporated in Ireland, Medtronic was able to avoid paying deferred taxes on those profits. In recent years, the rate at which corporations are choosing to restructure abroad has increased significantly. Between 2004 and 2014,47 corporations underwent inversions, almost double the number that inverted in the previous 30 years. Well-known federal contractors – including Accenture, Tyco Electronics, Pricewaterhousecoopers Consulting, and Medtronic – are among the companies that have reincorporated abroad.
On April 15, two members of Congress introduced identical bills to make inverted companies ineligible for federal contracts. DeLauro introduced the No Federal Contracts for Corporate Deserters Act (H.R. 1809), and Sen. Dick Durbin (D-IL) introduced the American Business for American Companies Act of 2015 (S.975). The proposals echo legislation proposed last Congress by Sen. Carl Levin (D-MI), now retired, and Rep. Sander Levin (D-MI).

Inverted corporations are technically barred from doing business with the federal government, but they continue to receive more than $1 billion in government contracts each year.


This inconsistency appears to be largely the result of a lack of enforcement, as well as the ability of some companies to be grandfathered into contracts and take advantage of other loopholes. For example, Ingersoll-Rand, a manufacturing company that was based in New Jersey until 2001, has continued to receive federal contracts, despite having reincorporated in Bermuda in 2001 and Ireland in 2009.
The new legislation prohibits awarding contracts to inverted companies, as well as joint ventures in which more than ten percent of the venture is held by an inverted company. Additionally, contracts worth more than $10 million (with the exception of contracts for exclusively commercial items) will be required to include language that limits subcontracting to inverted companies. If contracts violate these terms, they can be terminated.  This would apply to all companies which have inverted since May 8, 2014.
The decision to move a corporation’s registration offshore to avoid taxes is not without consequences for society. Businesses making these decisions should face consequences as well, starting with being cut off from profitable public contracts.