Even those who have a heaping helping of disapproval for Bill Clinton have to admit the old boy can make them laugh. After all the work President Obama and certain congressional Democrats have put into their dopey War on Corporate Inversions (aka “kneecap everyone who tries to climb over the wall to escape our nutty tax system,”) Slick Willie comes along to “express sympathy” for Obama’s designated targets. From the New York Times:
“Like it or not, this inversion, this is their money,” Mr. Clinton said in an interview during the Clinton Global Initiative in New York.
Oh, I could stop right there. All of Obamanomics – not to mention the even more hardcore collectivist philosophy of Hillary Clinton’s prospective 2016 presidential rival Elizabeth Warren – is predicated on the notion it is not their money. The State, acting as righteous agent of The People, has first claim on every dollar. You didn’t build that… someone else made that happen. Small wonder they’ve been known to describe corporate inversions as treason. Merging with a foreign company to shelter profits from the tax-hungry, big-spending federal government is about the strongest imaginable rebuke of You Didn’t Build That collective ownership, or Warren’s theory that the “private sector” is an illusion, because not a nickel is earned without using a variety of public resources, and people who earn a lot of nickels are cheating the State.
When asked whether inversions — the practice of American companies acquiring a small overseas rival and reincorporating abroad to lower their tax bills — are unpatriotic, as many critics say, Mr. Clinton said that publicly traded companies, in particular, “feel duty bound to pay the lowest taxes they can pay.”
“I should make full disclosure here,” Mr. Clinton told CNBC’s Becky Quick. “I signed and supported the bill that raised the corporate taxes in America to the level they are now.”
But, he said it was a different environment when he was in office. “We were deciding we had to reduce the deficit to get interest rates down and spark an investment boom in America, and it worked,” Mr. Clinton said.
The former president added that it’s Treasury Secretary Jacob L. Lew’s job to get as much revenue as possible from corporations, but that the tax rate should not be higher than the average rate of countries in the the Organization for Economic Cooperation and Development, or O.E.C.D.
“We have the highest overall corporate tax rates in the world, and we are now the only O.E.C.D. country that also taxes overseas earnings,” Mr. Clinton said. “A lot of these executives, even if they wanted to bring the money home, they think this is crazy.”
Aside from the self-serving claptrap about Clinton’s tax hikes somehow sparking an investment boom – that’s not even close to what happened, and he left office in the midst of an economic downturn caused by the bursting dot-com bubble – he’s right about the lunacy of the corporate tax system, particularly the way it provides strong incentives for corporations to keep their money overseas. It’s not just the high rates of our corporate tax regime that are bonkers, it’s the way those taxes are computed on every dollar that gets anywhere near Uncle Sam’s grasping fingers, whether the money was earned in the United States or not.
David Harsanyi makes another great point about Obama’s anti-inversion crusade at The Federalist:
Obama must feel more emboldened than ever in following through on his happy authoritarian talk. If war isn’t worth a vote, what is? This week, the Treasury Department went ahead and offered new “guidance” on inversions, putting American companies on notice. Any deals corporations enter into after this week will be subject to a bunch of new tax rules in the future. “For some companies considering deals, today’s actions may mean that those transactions no longer make economic sense,” lectured Treasury Secretary Jack Lew (a guy who received a $940,000 bonus from Citigroup in early 2009 as the bank was getting $45 billion in bailout funds from taxpayers.)
Well, yeah. But let’s think about this for a moment.
The executive branch will be “cracking down”–that’s how most media outlets correctly put it–on tax maneuvers that are legal. Democrats tend to be annoyed by the fact that corporations shield their profits, and because the issue has political potency the White House will retroactively and unilaterally issue legislation masquerading as rules. This would be the equivalent of a Republican administration “cracking down” on solar panel companies for using subsidizes because conservatives don’t like the practice.
A government “crackdown” on something that isn’t even illegal is one of the best working definitions of tyranny you could ask for. It could be argued that the very essence of tyranny is the exercise of power beyond the law, for the purpose of bending citizens to the will of the regime. The notion of government as the submissive, impartial protector of universal rights – the enforcer of duly passed, clearly understood laws is far into our rear-view mirror, isn’t it?
And history teaches us that none of this will work. The net cost to America in lost jobs and investment capital far outweighs whatever pennies can be pinched through our abysmal, uncompetitive, dishonest tax system. (I can’t stress enough how dishonest it is, because big corporate taxes are just a stealthy way to impose taxes on the consumer, with corporations drafted into service as disguised tax collectors.) When a nation is fretting about keeping its taxpayers captive, rather than attracting new business, that nation is a loser trying to manage its decline, not a tough competitor in the global marketplace.
The Clintons are going to position Hillary as the smarter, more growth-oriented Democrat alternative to Obama malaise. This won’t be the first time they make Obama look like a fool in the process of positioning Hillary against him. Don’t think Bill doesn’t relish these moments.