"There are so many loopholes that have been written into the tax code, oftentimes with support of Senator McCain, that we actually see our businesses pay effectively one of the lowest tax rates in the world." -Barack Obama
Looking into Obama's assertion, I found out that:
Three years ago, the Congressional Budget Office compared U.S. corporate tax rates to other countries to get a sense of where we stand. They found that the United States’ statutory corporate tax rates in 2003 came to 39.3 percent. Only Japan (40.9) and Germany (39.6) were higher. Among the top industrialized countries, the United States ranked third of seven.
But the corporate tax picture is more complex than McCain*— and that statistic*— makes it seem. Note the word "statutory" in the last paragraph. It excludes other very important factors such as a country’s depreciation system (how quickly businesses are allowed to write off investment in equipment and buildings); how much companies can write off from debt; and investor-level taxes such as capital gains, dividends and interest.
That’s why many economists like to cite "effective marginal tax rates," the percentage of the income from an investment that must be paid as corporate income tax.
The United States*fares much better in these tables, although it varies by industry and other factors, such as how much a company borrows for equipment or structures (generally, the more debt a company carries, the more it can write off). The United States*has fairly generous depreciation rules, but is less generous when it comes to investment in structures.
So, for example, the United States*ranks second lowest in the world among industrialized nations when it comes to the effective corporate tax rates for debt-financed investments in machinery. For equity-financed investments in machinery, the rates are closer to the upper middle of the pack. And for equity-financed investments in industrial structures (buildings, factories, etc), the effective corporate tax rates were second highest in the world (behind Japan). As an aside, it is precisely this tax system, weighted to favor debt-financed investments, that's part of why the*current credit crisis is seen as so dire.
"In any company, these deductions reduce the tax rates well below what the statutory rule is," said the center’s Bob Williams. "It depends on the type of company and the kinds of investments you are making."
While the Tax Foundation and the Tax Policy Center disagree somewhat on how important the statutory tax rate is and where the United States*ranks among nations based upon the marginal "effective" rates, they do agree that the statutory rate is only part of the story for what U.S. companies pay in taxes.
McCain’s repeated citation of statutory corporate tax rates is misleading because it does not take into account various deducations to which businesses are entitled.
McCain said that he would spend an additional $300 Billion to buy up shaky mortgages from homeowners, on top of the ~$1 Trillion dedicated to economic recovery so far. I support this idea as trickle down has never benefited the middle class while percolate up economics is effective strategy; sadly the mortgages have been bought and sold numerous times, then diced up for securitized investment instruments (thank John McCain and Phil Graham) and can't be put back together in most cases. McCain just offered empty but nice sounding words.
Oh, and the horror of the Global Poverty Act, which directs that some aid from a possible $65 Billion total foreign aid budget be directed to fight extreme poverty:
Obama, Hagel, Cantwell, Smith Hail Committee Passage of the Global Poverty Act
Wednesday, February 13, 2008
FOR IMMEDIATE RELEASE
CONTACT: Michael Ortiz (Obama), Jordan Stark (Hagel), Ciaran Clayton (Cantwell), or Derrick Crowe (Smith)
Legislation would aim to cut extreme global poverty in half by 2015
WASHINGTON, D.C. - U.S. Senators Barack Obama (D-IL), Chuck Hagel (R-NE), and Maria Cantwell (D-WA) and Congressman Adam Smith (D-WA) today hailed the Senate Foreign Relations Committee's passage of the Global Poverty Act (S.2433), which requires the President to develop and implement a comprehensive policy to cut extreme global poverty in half by 2015 through aid, trade, debt relief, and coordination with the international community, businesses and NGOs. This legislation was introduced in December. Smith and Congressman Spencer Bachus (R-AL) sponsored the House version of the bill (H.R. 1302), which passed the House last September.
"With billions of people living on just dollars a day around the world, global poverty remains one of the greatest challenges and tragedies the international community faces," said Senator Obama. "It must be a priority of American foreign policy to commit to eliminating extreme poverty and ensuring every child has food, shelter, and clean drinking water. As we strive to rebuild America's standing in the world, this important bill will demonstrate our promise and commitment to those in the developing world. Our commitment to the global economy must extend beyond trade agreements that are more about increasing corporate profits than about helping workers and small farmers everywhere. I commend Chairman Biden and Ranking Member Lugar for supporting this bill and moving it forward quickly."
"Poverty, hunger, and disease will be among the most serious challenges confronting the world in the 21st century," Senator Hagel said. "This legislation provides the President of the United States the framework and resources to help implement a comprehensive policy to reduce global poverty. It is the human condition that has always driven the great events of history. This is a responsibility of all citizens of the world."
"Global poverty directly impacts our national security. We must rally private sector and government resources to eliminate extreme global poverty and to fight global disease." said Senator Cantwell. "With more than 1.1 billion men, women and children throughout the world living on less than $1 a day, it is of the utmost importance to make sure these people get the help they need and push for sustainable economic growth. We need to do more to save lives in the poorest countries and extend our hand to people in need."
"Global poverty is one of the greatest moral and security challenges facing the world today. Nearly 2.7 billion people live on less than $2 a day and close to a billion live on less than $1 a day. This bill represents a major advance in our effort to address global poverty. After introducing this measure in the House for the past several years, I am pleased to see the Senate Foreign Relations Committee take significant steps toward its final passage," Congressman Smith said.
For years, America has committed to improving the lives of the world's poorest people. In 2000, the U.S. joined more than 180 countries at the United Nations Millennium Summit and vowed to reduce global poverty by 2015. We are halfway towards this deadline, and it is time the United States makes it a priority of our foreign policy to meet this goal and help those who are struggling day to day.
The Global Poverty Act:
Declares it official U.S. policy to promote the reduction of global poverty, the elimination of extreme global poverty, and the achievement of the Millennium Development Goal of cutting extreme global poverty in half by 2015.
Requires the President to develop and implement a comprehensive strategy to carry out that policy.
Includes guidelines for what the strategy should include - from aid, trade, and debt relief, to working with the international community, businesses and NGOs, to ensuring environmental sustainability.
Requires that the President's strategy include specific and measurable goals, efforts to be undertaken, benchmarks, and timetables.
Requires the President to report back to Congress on progress made in the implementation of the global poverty strategy.
The legislation is supported by a broad range of groups, including Bread for the World, the United States Conference of Catholic Bishops, CARE, Oxfam America, Habitat for Humanity International, National Wildlife Federation, Sierra Club, United Church of Christ, Christian Church (Disciples of Christ), the Borgen Project, United Methodist General Board of Church and Society, RESULTS, Micah Challenge USA, and the Evangelical Lutheran Church in America.
Who's being investigated for foreign campaign donations?
http://www.mcclatchydc.com/254/story/47619.html
Watchdog seeks federal investigation of McCain donations
By Greg Gordon | McClatchy Newspapers
WASHINGTON — A political watchdog group called for investigations Monday to determine whether fundraisers for John McCain's presidential campaign arranged illegal "straw" donations — contributions from people who did not spend their own money.
Campaign Money Watch urged Attorney General Michael Mukasey to probe the activities of Florida defense contractor Harry Sargeant III, who is credited with raising more than $500,000 for the campaign. It also questioned $57,000 in donations from an office manager for the oil giant, the Hess Corp., and her husband, a railroad foreman.
The McCain campaign last week returned $50,000 of the donations tied to Sargeant, citing published reports that some California donors did not intend to vote for McCain. The campaign also sent a letter to others who contributed via Sargeant, stressing that only U.S. citizens or permanent residents may donate, and only if they use their own funds.
In a letter to Mukasey, David Donnelly, the executive director of Campaign Money Watch, said that merely returning questionable donations would "sweep them under the rug and would further damage the public's faith in our democratic process.''
His letter was accompanied by a petition carrying 12,000 signatures gathered by the liberal-leaning group Moveon.org Political Action.
A Justice Department official said the agency had yet to receive the letter and would have no comment.
Sargeant, who could not be reached for comment, is a college friend of Florida Gov. Charlie Crist and serves as finance chairman of the Florida Republican Party. He had help in raising the money from Mustafa Abu Naba, his partner in the International Oil Trading Co., which holds a Pentagon contract worth up to $1 billion to deliver jet fuel to U.S. military bases in Iraq.
Referring to Abu Naba, Donnelly called it ``of questionable legality for foreign nationals to participate in fundraising and finance decisions for federal candidates.''
He also urged an investigation of two donations of $28,500 each by Alice Rocchio, the Hess Corp. office manager, and by her husband, Pasquale, to a joint fundraising committee set up by McCain and the Republican National Committee.
The couple made their contributions within days of McCain's reversal of his longstanding opposition to offshore oil drilling and on the same day that seven Hess executives and two of their relatives each donated the same amount. Among them were Chairman and Chief Executive Officer John Hess, who has raised more than $500,000 for McCain.
While it's "understandable" that Hess executives might give generously to McCain, Donnelly wrote, "that does not explain how Mr. and Ms. Rocchio came to give these significant amounts given what appears to be their modest lifestyle."
The couple lives in an apartment in the New York borough of Queens. McClatchy reported last week that Alice Rocchio drives a 1993 Chevy Cavalier. The couple, who said they contributed because they supported McCain, had earlier given $4,600.
jkwarrior, I will never mock you as an ignorant 1 issue voter or belttle your belief. I respect your principled stand. I find irony that some of the people who picket outside of a planned parenthood office show up outside a prison on the eve of an execution to picket for the death penalty. I will admit I am similarly conflicted, I support a woman's right to choose but oppose the death penalty.
I oppose McCain for so many reasons as an educated veteran parent business owner. Having said that, I hope that if elected, McCain is the best President in the history of the United States. After 8 years of the Bush administration, that is what we all desperately need.