HIGHTOWER: "Saving a Corporate Tax Loophole"
A Denver office building reportedly has this sign in its elevator: "Braille Instructions, Please See Below."Well, most of us would need a combination of Braille, 20-20 eyesight, a magnifying glass, and a seeing-eye dog to find all that's buried deep in the U.S. tax code. But giant corporations are able to see what we can't, because they have an advantage we don't: an office full of tax lawyers, accountants and lobbyists to twist the words in the tax code to create tax-avoidance loopholes for themselves.Take the phrase "hybrid structures." Corporate tax sleuths got hold of this and are now using it in a convoluted way to avoid U.S. taxes altogether on profits they make from foreign operations. Not only has this become nearly a $2-billion tax dodge, but it also encourages corporations to move more of their operations overseas to take advantage of the lucrative loophole.In January, Treasury officials gave notice that they were ending the tax break on these offshore "hybrid structures" . . . but, whoa, stand back! Here came a hoard of lobbyists from such heavyweight outfits as Microsoft, GM, Philip Morris, Exxon, and Coca-Cola, all rushing to Congress and crying: "Save our loophole"!To make a long story short, Congress did. After all, those corporations are big campaign contributors to both parties, and members of both parties rallied to their avaricious cause. The Treasury Department quickly backed off, agreeing that companies already using the loophole can continue to do so permanently, and that other companies can use the loophole for the next six years.This is Jim Hightower saying . . . Thanks to their lawyers, lobbyists, and lawmakers, giant corporations get special treatment that lets them dodge their tax responsibilities and shift the burden onto the backs of working families.Source: "Multinationals move fast to preserve tax loophole" by Leslie Wayne. New York Times: July 12, 1998.