You can't make this crap up; Standard and Poors announces they cut Americas credit rating because of our inability and unwillingness to address our very manageable but ignored debt. Their statement explicitly and repeatedly cites Republican refusal to raise taxes as a primary cause. And, somehow, those same Republicans respond by amping up a push to cancel corporate taxes that they began even as the debt ceiling crisis was forming, and endured throughout it. Where are the liberal Democrats, champion of the common man and evil leaders in socialism? Floating "compromises" to grant a negligibly less generous corporate tax freebie so they can claim to maintain the pretense of not being every bit the corporate lackeys Republicans are, both at the expense of the nation and its citizens.

Evil Corporate Tax Holiday Deal Still Alive
POSTED: AUGUST 4, 9:29 AM ET

Just a quick update on the corporate tax holiday situation …

There was some talk that a corporate tax holiday <a href="http://www.rollingstone.com/politics/blogs/taibblog/holiday-in-scambodia-20110720">might be rolled up somehow into the debt-ceiling deal</a>. I heard that from a few quarters in DC in the weeks leading up to Obama’s Bighornesque debt/supercommittee massacre.

However, the tax holiday turned out to not be part of that deal. That does not mean, however, that the proposal is dead. In fact, calling around in the last few days, I’m hearing that it is very much alive.

The action revolves around a <a href="http://www.house.gov/apps/list/press/tx08_brady/5_11_11_Add_1Trillion.html">bill</a> sponsored in May by Texas Republican Kevin Brady (and co-sponsored by Utah Democrat Jim Matheson) called the Freedom To Invest Act, which would “temporarily” lower the effective corporate tax rate to 5.25 percent for all profits being repatriated.

Essentially, this is a one-time tax holiday rewarding companies for systematically offshoring their profits since 2004 – the last time they did this “one-time” deal.

The Brady bill is still alive and in speaking to three different Hill staffers (on the House side) over the last few days, I’m hearing that it was “unaffected” by the debt deal and that it continues to gain momentum, thanks in large part to a lobbying effort that two different staffers described as intense and ongoing.

For people interested in this story, I definitely recommend reading this <a href="http://www.bloomberg.com/news/2011-06-28/biggest-tax-avoiders-win-most-gaming-1-trillion-u-s-tax-break.html">Bloomberg article</a> focusing on Cisco, one of the biggest lobbyers in favor of the tax holiday. This is a company whose CEO, John Chambers, wrote an <a href="http://online.wsj.com/article/SB10001424052748704469004575533880328930598.html">editorial last October in the Wall Street Journal</a> predicting that the tax holiday would generate a trillion dollars in repatriated earnings, money that Chambers insisted would outdo even Barack Obama’s stimulus as a job-creation engine:

The amount of corporate cash that would come flooding into the country could be larger than the entire federal stimulus package, and it could be used for creating jobs, investing in research, building plants, purchasing equipment, and other uses.

And yet: Chambers’s company, Cisco, would not commit to creating so much as a single job if the tax holiday is passed. As it is, the company has already committed to a wave of layoffs. When asked a question about Cisco's plans w/regard to a potential tax holiday, the company’s spokesman, John Earhardt, declined to answer. From the Bloomberg piece:


For more on this, check out my appearance on Keith Olbermann’s Countdown last night. Also urge folks to check out <a href="http://current.com/shows/countdown/videos/paul-krugman-on-whats-next-for-the-american-economy">Paul Krugman's spot</a> on the same show, talking about the potential for a future recession. Met him for the first time last night, totally nice guy. The whole green room was kind of equally bummed out about the Obama debt deal ...

At this point, why don't we just do what Republican fire eaters have so long demanded: Abolish the corporate income tax. The multi-billion dollar multinationals it's supposed to target routinely evade it by keeping their overseas profits overseas, even "sell" their American branches products through their overseas subsidiaries to further reduce their tax burden. All the corporate income tax actually does is give multinationals another club to use against their small business competitors in the US, who don't have the luxury of foreign slush funds and tax shelters and are thus forced to actually obey the spirit as well as the letter of the law. That, and give those multinationals and their mouthpieces another reason to complain about how unfairly they're abused.

Speaking of which, Uncle Sam asserts the right to tax the income of ACTUAL American people (but not corporations) earned ANYWHERE. If I earn >$10,000 this year, in Norway, America or on the Moon, I must, by law, file a 2011 tax return and pay the appropriate US federal income tax. I can write off any income tax paid here (as can corporations), so I'm unlikely to owe any US tax, but if I lived in a country with a LOWER tax rate I'd owe the difference to Uncle Sam. Unless, of course, I were a corporation; maybe I should have myself legally declared one: It's about the only way I'm ever likely to have representation in Washington.