oracle
10-04-2002, 01:13 PM
Daschle’s Corporate Scandal (http://www.nationalreview.com/comment/comment-ferrara100402.asp)
<font size=1>Where not even Bill Clinton would go.
by Peter Ferrara</font>
Senate Majority Leader Tom Daschle has led the attack in trying to tie Republicans to the corporate scandals at Enron, WorldCom, and elsewhere. He has harshly criticized U.S. companies that set up offshore shells in island tax havens like Bermuda to avoid U.S. taxes.
But Daschle himself is now promoting just what he has criticized in quietly pushing a corporate-welfare scam that was too dirty even for Bill Clinton.
The proposal would permanently exempt from taxation 90 percent of the profits earned by the subsidiaries of U.S. firms in Puerto Rico. The proposal would even allow U.S. companies to "borrow" the profits of Puerto Rican subsidiaries free of interest or taxes for as long as they want. This would leave the profits from Puerto Rican subsidiaries completely free of tax.
If enacted, Daschle's plan would cost the federal treasury $4.6 billion in lost revenue next year, $18.3 billion over the first five years, and $32.1 billion over ten years.
The proposal would effectively bring back one of the most notorious corporate-welfare rip-offs in U.S. history. Now being phased out, it is referred to as Section 956, which is the Internal Revenue Code Section embodying it. The provision was originally adopted in 1976 and exempted U.S. Puerto Rican subsidiaries from taxation, expanding earlier preferential tax subsidies going back decades.
The problem is that these tax preferences have cost U.S. taxpayers a fortune, but have done little to benefit the people of Puerto Rico. Studies showed the preferences cost taxpayers about ten-percent more in lost revenue than the wages paid to employees of the Puerto Rican subsidiaries. In other words, American taxpayers were effectively paying the wages of the workers of the Puerto Rican subsidiaries, and losing an additional ten percent to boot.
Moreover, a 1992 GAO study examined the high-profile pharmaceutical companies who received two thirds of the benefits of these tax preferences over the years. The study concluded that the revenue lost to these subsidiaries was almost three times as much as the wages paid to the workers.
...
Why would Daschle want to do this? Well, the big corporate fat cats benefiting from these tax breaks are notorious for spreading big campaign contributions around to those who will support their cause. And Daschle needs big bucks to preserve his razor-thin Senate majority.
Indeed, the public records show that the pharmaceuticals alone have given almost a million dollars to the Democratic Senatorial Campaign Committee in this election cycle.
Enron and WorldCom were small potatoes compared to this.
Click here to read more (http://www.nationalreview.com/comment/comment-ferrara100402.asp)
<font size=1>Where not even Bill Clinton would go.
by Peter Ferrara</font>
Senate Majority Leader Tom Daschle has led the attack in trying to tie Republicans to the corporate scandals at Enron, WorldCom, and elsewhere. He has harshly criticized U.S. companies that set up offshore shells in island tax havens like Bermuda to avoid U.S. taxes.
But Daschle himself is now promoting just what he has criticized in quietly pushing a corporate-welfare scam that was too dirty even for Bill Clinton.
The proposal would permanently exempt from taxation 90 percent of the profits earned by the subsidiaries of U.S. firms in Puerto Rico. The proposal would even allow U.S. companies to "borrow" the profits of Puerto Rican subsidiaries free of interest or taxes for as long as they want. This would leave the profits from Puerto Rican subsidiaries completely free of tax.
If enacted, Daschle's plan would cost the federal treasury $4.6 billion in lost revenue next year, $18.3 billion over the first five years, and $32.1 billion over ten years.
The proposal would effectively bring back one of the most notorious corporate-welfare rip-offs in U.S. history. Now being phased out, it is referred to as Section 956, which is the Internal Revenue Code Section embodying it. The provision was originally adopted in 1976 and exempted U.S. Puerto Rican subsidiaries from taxation, expanding earlier preferential tax subsidies going back decades.
The problem is that these tax preferences have cost U.S. taxpayers a fortune, but have done little to benefit the people of Puerto Rico. Studies showed the preferences cost taxpayers about ten-percent more in lost revenue than the wages paid to employees of the Puerto Rican subsidiaries. In other words, American taxpayers were effectively paying the wages of the workers of the Puerto Rican subsidiaries, and losing an additional ten percent to boot.
Moreover, a 1992 GAO study examined the high-profile pharmaceutical companies who received two thirds of the benefits of these tax preferences over the years. The study concluded that the revenue lost to these subsidiaries was almost three times as much as the wages paid to the workers.
...
Why would Daschle want to do this? Well, the big corporate fat cats benefiting from these tax breaks are notorious for spreading big campaign contributions around to those who will support their cause. And Daschle needs big bucks to preserve his razor-thin Senate majority.
Indeed, the public records show that the pharmaceuticals alone have given almost a million dollars to the Democratic Senatorial Campaign Committee in this election cycle.
Enron and WorldCom were small potatoes compared to this.
Click here to read more (http://www.nationalreview.com/comment/comment-ferrara100402.asp)