Choice For Corporate America: Are You With America Or The
By Sen. Bernie Sanders
Independent U.S. Senator from Vermont
February 10, 2012 "Huffington
- - When the greed, recklessness, and illegal behavior
on Wall Street drove this country into the deepest recession
since the 1930s, the largest financial institutions in the
United States took every advantage of being American. They
just loved their country - and the willingness of the
American people to provide them with the largest bailout in
world history. In 2008, Congress approved a $700 billion
gift to Wall Street. Another $16 trillion in virtually zero
interest loans and other financial assistance came from the
Federal Reserve. America. What a great country.
But just two years later, as soon as these giant financial
institutions started making record-breaking profits again,
they suddenly lost their love for their native country. At a
time when the nation was suffering from a huge deficit,
largely created by the recession that Wall Street caused,
the major financial institutions did everything they could
to avoid paying American taxes by establishing shell
corporations in the Cayman Islands and other tax havens.
In 2010, Bank of America set up more than 200 subsidiaries
in the Cayman Islands (which has a corporate tax rate of 0.0
percent) to avoid paying U.S. taxes. It worked. Not only did
Bank of America pay nothing in federal income taxes, but it
received a rebate from the IRS worth $1.9 billion that year.
They are not alone. In 2010, JP Morgan Chase operated 83
subsidiaries incorporated in offshore tax havens to avoid
paying some $4.9 billion in U.S. taxes. That same year
Goldman Sachs operated 39 subsidiaries in offshore tax
havens to avoid an estimated $3.3 billion in U.S. taxes.
Citigroup has paid no federal income taxes for the last four
years after receiving a total of $2.5 trillion in financial
assistance from the Federal Reserve during the financial
On and on it goes. Wall Street banks and large companies
love America when they need corporate welfare. But when it
comes to paying American taxes or American wages, they want
nothing to do with this country. That has got to change.
Offshore tax abuse is not just limited to Wall Street. Each
and every year corporations and the wealthy are avoiding
more than $100 billion in U.S. taxes by sheltering their
Pharmaceutical companies like Eli Lilly and Pfizer have
fought to make it illegal for the American people to buy
cheaper prescription drugs from Canada and Europe. But,
during tax season, Eli Lilly and Pfizer shift drug patents
and profits to the Netherlands and other offshore tax havens
to avoid paying U.S. taxes.
wants all of the advantages of being an American company,
but it doesn't want to pay American taxes or American wages.
It creates the iPad, the iPhone, the iPod, and iTunes in the
United States, but manufactures most of its products in
China so it doesn't have to pay American wages. Then it
shifts most of its profits to Ireland, Luxembourg, the
British Virgin Islands and other tax havens to avoid paying
U.S. taxes. Without such maneuvers, Apple's federal tax bill
in the United States would have been $2.4 billion higher in
Offshore tax schemes have become so absurd that one
five-story office building in the Cayman Islands is now the
"home" to more than 18,000 corporations.
This tax avoidance does not just reduce the revenue that we
need to pay for education, healthcare, roads, and
environmental protection, it is also costing us millions of
American jobs. Today, companies are using these same tax
schemes to lower their tax bills by shipping American jobs
and factories abroad. These tax breaks have contributed to
the loss of more than 5 million U.S. manufacturing jobs and
the closure of more than 56,000 factories since 2000. That
also has got to change.
At a time when we have a $16.5 trillion national debt; at a
time when roughly one-quarter of the largest corporations in
America are paying no federal income taxes; and at a time
when corporate profits are at an all-time high; it is past
time for Wall Street and corporate America to pay their fair
That's what the Corporate Tax Dodging Prevention Act (S.250)
that I have introduced with Rep. Jan Schakowsky (D-Ill.) is
This legislation will stop profitable Wall Street banks and
corporations from sheltering profits in the Cayman Islands
and other tax havens to avoid paying U.S. taxes. It will
also stop rewarding companies that ship jobs and factories
overseas with tax breaks. The Joint Committee on Taxation
has estimated in the past that the provisions in this bill
will raise more than $590 billion in revenue over the next
As Congress debates deficit reduction, it is clear that we
must raise significant new revenue. At 15.8 percent of GDP,
federal revenue is at almost the lowest point in 60 years.
Our Republican colleagues want to balance the budget on the
backs of the elderly, the sick, the children, the veterans
and the most vulnerable by making massive cuts. At a time
when the middle class already is disappearing, that is not
only a grossly immoral position, it is bad economics.
We have a much better idea. Wall Street and the largest
corporations in the country must begin to pay their fair
share of taxes. They must not be able to continue hiding
their profits offshore and shipping American jobs overseas
to avoid taxes.
Here's the simple truth. You can't be an American company
only when you want a massive bailout from the American
people. You have also got to be an American company, and pay
your fair share of taxes, as we struggle with the deficit
and adequate funding for the needs of the American people.
If Wall Street and corporate America don't agree, the next
time they need a bailout let them go to the Cayman Islands,
let them go to Bermuda, let them go to the Bahamas and let
them ask those countries for corporate welfare.
Speaking at a
Thursday news conference on a new bill to shut down overseas
tax havens, Sen. Bernie Sanders gestures toward a photo of a
Cayman Islands building used by more than 18,000 companies
to avoid paying taxes.
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