The attached article in Rolling Stone clearly describes the main reason for the economic and political crisis in the US Territory of Puerto Rico and the economic crisis in the USA.
Puerto Rico, a US Territory of the US, with US citizens for over 100 years is the worst victim of this IRS Offshore Tax Scam. Greedy politicians in Puerto Rico, a US Territory of American citizens, in alliance with interested sectors in the island, including corporate lobbyists, CFC's, the local opposition parties, workers unions, local Banks, etc. have lobbied Congress for decades to obtain tax exempt privileges for US Corporations who do business in Puerto Rico.
This has consisted in obtaining legislation that have created IRS Codes that define Puerto Rico as a foreign country for their tax evasion purposes. CFC (Controlled Foreign Corporations) does not mean they are foreign, it means Puerto Rico is foreign! This is a legal violation of the US Constitution Territorial Clause.
Puerto Rico and Puerto Ricans are right at the center of this storm. Our US Territory is their top choice for corporate money laundering. Many in Puerto Rico have been led to believe these corporate tax breaks are the only solution to our stagnant economy.
However, these tax breaks have been around for over 60 years and we still continue with high unemployment and serious social problems which have escalated in high crime statistics, comparable to a war zone. It has also contributed to the economic debacle hitting the US taxpayer and workers, by taking jobs away from the US, increasing unemployment and then obtaining tax benefits to bring the money home under the false pretense of helping the US economy.
Over the decades, this has not resulted in benefits for our island or our people. It has created a filthy rich governing elite class which has enjoyed these privileges, while the rest of the 3.5 millions of Puerto Ricans live under the US poverty standards and with an unemployment rate of over 18%.
3.5 million US citizens live in Puerto Rico and 4.5 million have already opted to abandon ship and relocate to the other States of the Union, the most recent ones, our most talented professionals.
Puerto Rico and Puerto Ricans are right at the center of this storm. Our US Territory is their top choice for corporate money laundering. Many in Puerto Rico have been led to believe these corporate tax breaks are the only solution to our stagnant economy.
However, these tax breaks have been around for over 60 years and we still continue with high unemployment and serious social problems which have escalated in high crime statistics, comparable to a war zone. It has also contributed to the economic debacle hitting the US taxpayer and workers, by taking jobs away from the US, increasing unemployment and then obtaining tax benefits to bring the money home under the false pretense of helping the US economy.
Over the decades, this has not resulted in benefits for our island or our people. It has created a filthy rich governing elite class which has enjoyed these privileges, while the rest of the 3.5 millions of Puerto Ricans live under the US poverty standards and with an unemployment rate of over 18%.
3.5 million US citizens live in Puerto Rico and 4.5 million have already opted to abandon ship and relocate to the other States of the Union, the most recent ones, our most talented professionals.
Whenever the people of Puerto Rico start a process of self determination, millions of dollars appear out of nowhere to campaign against statehood, since it will be the death knoll for this scam.
In cohorts with interested sectors in the island, including Corporate lobbyists, the CFC's, the local parties, workers unions, etc., lobby Congress to get more tax sparing benefits and continue to code Puerto Rico, a USA territory, as a foreign country so it can continue to be the "American-Foreign" offshore tax haven for multinational corporations and Corporate Welfare. This bill will scam the US Treasury for trillions of dollars.
THIS IS A SCAM! Offshore tax benefits have proven do not help the US economy and do not create jobs for Americans. This scamhas been preventing the US Citizens of Puerto Rico from achieving statehood, it throws the burden of supporting the Nation to the US Taxpayer, and is the main reason for the crisis in the US economy!
WAKE UP AMERICANS!
It goes way beyond inversion. The top names in American business – from Apple to Xerox – have joined in the greatest tax dodge in world history. Using clever accounting games, these corporations have siphoned majestic sums out of the country and into tax-haven shell companies – where the money is untouchable by the IRS.
The numbers are staggering. More than $2 trillion in U.S.-based multinational profits currently sit in offshore accounts, representing, by credible estimates, in excess of $500 billion in unpaid taxes. If that money were deposited in federal coffers tomorrow, it would wipe out the deficit for 2014. And every year that Congress dithers on a crackdown, America is forfeiting an approximate $90 billion in revenue.
U.S. corporate citizens enjoy benefits that aren't cabined inside our borders. The U.S. Navy secures shipping lanes needed to transport goods from Chinese factories to ports around the world. The American legal system protects corporate patents and other intellectual property worldwide. U.S. taxpayers fund the R&D that makes many of these corporations profitable in the first place.
Adding insult to injury, this self-dealing creates a phantom business expense in the United States. "They get a tax deduction in America while they pile up the money in another country, tax-free," says Johnston.
Contrary to what the term "offshore" might suggest, these untaxed profits are not stranded. "There's this false notion that these funds are locked in a strongbox somewhere," says Edward Kleinbard, a former chief of staff for Congress' Joint Committee on Taxation. In reality, these untaxed foreign profits are often banked, by the offshore subsidiaries themselves, in Manhattan – where they're used to invest in stocks and U.S. Treasury bonds. "The money," says Kleinbard, "is already back in the U.S. economy."
The analysis reveals that the biggest names in corporate America are boycotting the U.S. tax system, en masse. Top offenders include giants from high-tech (Microsoft, $76 billion); Big Pharma (Pfizer, $69 billion); Big Oil (ExxonMobil, $47 billion); investment banks (Goldman Sachs, $22 billion); Big Tobacco (Philip Morris, $20 billion); discount retailers (Wal-Mart, $19 billion); fast-food chains (McDonald's, $16 billion) – even heavy machinery (Caterpillar, $17 billion). General Electric has $110 billion stashed offshore, and enjoys an effective tax rate of four percent – 31 points lower than its statutory obligation to the IRS.
"The constant corporate whining that they're overtaxed in the United States," Bob McIntyre (from Tax justice) says, "is bullshit."
Without meaningful resistance from Congress, corporations are pressing forward with abusive tax schemes. Two recent Senate investigations offer a window into the dark arts of corporate America's tax avoidance.
This is the reality of our political system in 2014: In what should be a titanic battle between multinational corporate power and federal power, our elected representatives are hardly putting up a fight.
The American people want change: Two-thirds of Americans believe large corporations should be paying higher taxes, and 80 percent believe corporate loopholes should be closed. But Washington isn't listening.
"Corporate tax breaks are beloved by those who take advantage of them," says Bernstein. "You're not going to change that without realigning a lot of politics." Until that day comes, we'll be living with the tax policy that multinational corporations have bought and paid for. Which means that you and I are stuck with the bills.
In cohorts with interested sectors in the island, including Corporate lobbyists, the CFC's, the local parties, workers unions, etc., lobby Congress to get more tax sparing benefits and continue to code Puerto Rico, a USA territory, as a foreign country so it can continue to be the "American-Foreign" offshore tax haven for multinational corporations and Corporate Welfare. This bill will scam the US Treasury for trillions of dollars.
THIS IS A SCAM! Offshore tax benefits have proven do not help the US economy and do not create jobs for Americans. This scamhas been preventing the US Citizens of Puerto Rico from achieving statehood, it throws the burden of supporting the Nation to the US Taxpayer, and is the main reason for the crisis in the US economy!
WAKE UP AMERICANS!
Miriam J. Ramirez MD
themjreport@gmail.com
More on this topic:
Dec 2010 U.S. Multinationals Bring Home Cash, Dodge $25 Billion/Year in Repatriation Taxes
Feb 2011 - Puerto Rico's offshore tax benefits known also as CFC's.
themjreport@gmail.com
Dec 2010 U.S. Multinationals Bring Home Cash, Dodge $25 Billion/Year in Repatriation Taxes
Feb 2011 - Puerto Rico's offshore tax benefits known also as CFC's.
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The Biggest Tax Scam Ever
"Some of America's top corporations are parking profits overseas and ducking hundreds of billions in taxes. And how's Congress responding? It's rewarding them for ripping us off" - Tim Dickinson
The Rolling Stones
August 27, 2014
By Tim Dickinson
" A loophole in American tax law permits companies with just 20 percent foreign ownership to reincorporate abroad, which means that if a big U.S. firm acquires a smaller company located in a tax haven, it can then "invert" – that is, become a subsidiary of its foreign-based affiliate – and kiss a huge share of its IRS obligations goodbye.By Tim Dickinson
It goes way beyond inversion. The top names in American business – from Apple to Xerox – have joined in the greatest tax dodge in world history. Using clever accounting games, these corporations have siphoned majestic sums out of the country and into tax-haven shell companies – where the money is untouchable by the IRS.
The numbers are staggering. More than $2 trillion in U.S.-based multinational profits currently sit in offshore accounts, representing, by credible estimates, in excess of $500 billion in unpaid taxes. If that money were deposited in federal coffers tomorrow, it would wipe out the deficit for 2014. And every year that Congress dithers on a crackdown, America is forfeiting an approximate $90 billion in revenue.
U.S. corporate citizens enjoy benefits that aren't cabined inside our borders. The U.S. Navy secures shipping lanes needed to transport goods from Chinese factories to ports around the world. The American legal system protects corporate patents and other intellectual property worldwide. U.S. taxpayers fund the R&D that makes many of these corporations profitable in the first place.
Adding insult to injury, this self-dealing creates a phantom business expense in the United States. "They get a tax deduction in America while they pile up the money in another country, tax-free," says Johnston.
Contrary to what the term "offshore" might suggest, these untaxed profits are not stranded. "There's this false notion that these funds are locked in a strongbox somewhere," says Edward Kleinbard, a former chief of staff for Congress' Joint Committee on Taxation. In reality, these untaxed foreign profits are often banked, by the offshore subsidiaries themselves, in Manhattan – where they're used to invest in stocks and U.S. Treasury bonds. "The money," says Kleinbard, "is already back in the U.S. economy."
The analysis reveals that the biggest names in corporate America are boycotting the U.S. tax system, en masse. Top offenders include giants from high-tech (Microsoft, $76 billion); Big Pharma (Pfizer, $69 billion); Big Oil (ExxonMobil, $47 billion); investment banks (Goldman Sachs, $22 billion); Big Tobacco (Philip Morris, $20 billion); discount retailers (Wal-Mart, $19 billion); fast-food chains (McDonald's, $16 billion) – even heavy machinery (Caterpillar, $17 billion). General Electric has $110 billion stashed offshore, and enjoys an effective tax rate of four percent – 31 points lower than its statutory obligation to the IRS.
"The constant corporate whining that they're overtaxed in the United States," Bob McIntyre (from Tax justice) says, "is bullshit."
Without meaningful resistance from Congress, corporations are pressing forward with abusive tax schemes. Two recent Senate investigations offer a window into the dark arts of corporate America's tax avoidance.
This is the reality of our political system in 2014: In what should be a titanic battle between multinational corporate power and federal power, our elected representatives are hardly putting up a fight.
The American people want change: Two-thirds of Americans believe large corporations should be paying higher taxes, and 80 percent believe corporate loopholes should be closed. But Washington isn't listening.
"Corporate tax breaks are beloved by those who take advantage of them," says Bernstein. "You're not going to change that without realigning a lot of politics." Until that day comes, we'll be living with the tax policy that multinational corporations have bought and paid for. Which means that you and I are stuck with the bills.
Read Complete Article at: http://www.rollingstone.com/politics/news/the-biggest-tax-scam-ever-20140827#ixzz3BeN6ueJa
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