Not even illegal . See the NYT article on G.E. as well .
The Oregonian, Portland, Ore., Steve Duin column
By Steve Duin, The Oregonian, Portland, Ore.
March 28--On Sunday night, "60 Minutes" presented two memorable stories that framed what author/philosopher Ayn Rand once called the "virtue of selfishness."
Both segments focused, curiously enough, on what motivates Americans to venture overseas. The first piece introduced Elissa Montanti, a New York woman who -- through the Global Medical Relief Fund -- is devoted to helping children who have been crippled in foreign war zones.
The "60 Minutes" camera crews spent four months following Montanti and an 11-year-old Iraqi named Wa'ad, who lost an arm and a leg and had his faced ripped open when he kicked a roadside bomb.
Wa'ad's face was patiently restored by a Long Island plastic surgeon named Kaveh Alizadeh. When Alizadeh was asked why he feels called to this work, he said, "I do this probably for the most selfish reason, which is that it feels good."
That brings us to the second "60 Minutes" piece, an investigation of overseas tax shelters. While Montanti goes abroad to rescue broken children, hundreds of U.S. corporations -- including Cisco, Transocean and General Electric -- head for Ireland or Switzerland to shelter corporate profits. They are motivated, I would argue, by the same selfishness that inspires Kaveh Alizadeh:
It feels good. On their bottom line. At their shareholder rallies.
What that means for the U.S. economy, "60 Minutes" made clear, is a different story. When corporations park their profits -- an estimated $1.2 trillion -- overseas, they don't pay U.S. taxes on them until the money is brought home.
"I create jobs overseas; I acquire companies overseas; I build plants overseas; and I badly want to bring that money back," Cisco CEO John Chambers told Lesley Stahl.
Just not badly enough to pay U.S. taxes on it.
Exxon Mobil isn't opposed to paying income taxes -- it paid $17.6 billion in taxes on profits of $45.2 billion in 2009, according to Forbes -- just U.S. taxes: The IRS didn't see a dime of that money.
Then there's G.E. As The New York Times reported last week, G.E. had profits of $14.2 billion in 2010 ... just enough to somehow earn a tax benefit of $3.2 billion.
A tax break, the no-tax crowd crows, that allows G.E. to create jobs, right?
Uh, no: Since 2002, the Times reports, even as G.E. overseas profits rose from $15 billion to $92 billion, the corporation cut its domestic work force by 20 percent.
Puts a whole 'nother spin on "business friendly," doesn't it?
"There are 10,000 pages of loopholes in the tax code for corporations," notes Rep. Peter DeFazio, D-Ore, "while they scream about the 35 percent tax rate only a few poor suckers pay. The deck is stacked against American consumers, American taxpayers and American workers while these guys are chasing the lowest tax rate in the world.
"With no sense of national pride. With no sense of what they owe the United States of America for providing the stability that allows them to operate around the world."
None of this is surprising. In corporate America, self-interest trumps all other obligations. If the CEOs at Cisco or G.E. don't regard selfish, myopic greed as a virtue, the shareholders revolt.
I know a few CEOs and corporate boards feel called, like Elissa Montanti and Kaveh Alizadeh, to healing the wounded.
I also realize that not everyone inside the Beltway is a co-conspirator in shifting the corporate share of federal tax revenue from 30 percent in the Eisenhower administration to 6.6 percent in 2009.
While President Obama's outrage over General Electric's "America-last" philosophy is such that he named Jeffrey Immelt, the company's CEO, to chair his Council on Jobs and Competitiveness, Rep. Lloyd Doggett, D-Texas, is regularly pushing legislation that confronts the absurdity of these tax breaks.
But Doggett needs help. I don't know if that means a tax holiday that allows corporations to return that $1.2 trillion in foreign profits to this country at a significantly reduced tax rate. Perhaps -- in the spirit of Republicans like Ronald Reagan and Bob Packwood -- we need a reprise of the 1986 tax act, which lowered the top tax rates but closed many of the loopholes.
What's clear is that something has to change. As economist Martin Sullivan told "60 Minutes," "If you have a 35 percent (corporate) rate in the United States and, for example, a 12.5 percent rate in Ireland, there's an incentive to move your factory to Ireland.
"Almost everybody is in Ireland. All the pharmaceutical companies, all the high-tech companies. You're stupid if you're not in Ireland."
That's precisely what scares me. When corporate self-interest stands in opposition to the stability and economic self-interest of U.S. taxpayers, consumers and job-seekers, this country is at the edge of a death spiral.
My alarm, I freely admit, is the height of selfishness: Quite a few people I care about will be trying to survive in the maelstrom, long after I am gone.