As usual, it’s the messenger that’s the problem
Republicans have decided that the biggest, wettest kiss they can give their corporate owners is to make all money they earn overseas exempt from taxes, even if they bring that money back to the USA. It’s called a Territorial Tax System and it’s used by only a handful of countries — France, Hong Kong, Belgium, and the Netherlands.
When the Congressional Budget Office (CBO) took a look at the impact of the USA using a territorial tax system, not surprisingly they found that it would increase the shipment of jobs and manufacturing to other countries besides the USA. Who could have guessed? If you only tax money earned in the United States, companies will beat a path to nearest border to make sure they earn as much money as possible outside of the United States. It’s the weirdest thing.
When the Republicans heard that the CBO predicted this behavior and the subsequent negative impact on our nation’s economy and job situation, their response wasn’t, “Oh, shit, we better rethink this.” No, their response was to shout, “LIAR!”
I’m not kidding. And, I realize this is a complete shocker, it’s a Michigan Republican Congressman, Dave Camp, who is doing the shouting.
Camp and other Republicans prefer a so-called territorial system, which would essentially shield most or all of a corporation’s offshore profits from U.S. taxation.
But President Obama, in his recent State of the Union address, called for instituting a minimum tax on offshore income.
Camp had criticized the January CBO report for taking sides in what he said was a controversial discussion.
“This report purports to provide an even-handed review of different policy issues related to the taxation of foreign source income,” Camp wrote to Elmendorf last month.
“However, a closer analysis of the report reveals that it is heavily slanted and biased in favor of one specific approach to the taxation of foreign source income – and relies heavily on sources that tend to support that conclusion while ignoring sources that support a different conclusion,” he added.
CBO Director Elmendorf defends his nonpartisan group’s finding, of course. The CBO’s entire reason for existence is to provide unbiased fiscal analysis, free from partisan political influence. It’s analysis that Republicans gleefully point to as fair and balanced when it supports their arguments. But, when it doesn’t, they accuse the messenger of lying and attack them as partisan.
A classic example occurred last fall when GDP growth and the unemployment rate looked good right before the election. Republicans, led by former GE CEO Jack Welch, accused the federal government of lying about the numbers to benefit President Obama’s presidential campaign. However, the economic numbers last fall were not only accurate, they’ve since been upgraded to reflect even better results than were reported in September now that all of the data is in.
But Republicans have recently had to face the harsh reality that they cannot win elections or political debates unless they tilt the playing field in their own direction. Even if that means shooting the nonpartisan messenger. Thankfully for us, Americans are growing wise.
Plus, they can’t really shoot the CBO. They might actually need them some day.
[Hat tip: Think Progress]