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Explanation, Please

What's the difference between corporate expatriates and tax cheats?



Okay, Republicans, justify this. I want to hear your explanations for why the Republican leadership went against the will of 318 party members to grant an unconscionable gift to corporations that set up offshore tax shelters to avoid paying their U.S. taxes. Come on, Rush, I really want to hear this one -- and do, please, include the word "patriotism."

According to Citizens for Tax Justice, the offshore tax-shelter dodge costs this country as much as $50 billion annually. This amendment was not to shut down the loophole -- though, Lord knows, that needs to be done. It was just to prevent rewarding these financial traitors with government contracts.

The House leadership -- that would be speaker Dennis Hastert and majority leader Dick Armey -- going against the will of both the House and the Senate, took out the "Wellstone Amendment," sponsored by the late populist senator. It would have prevented runaway companies, those that set up mailboxes in Bermuda in order to avoid paying their taxes, from getting government contracts related to homeland security.

The polite term for these corporate tax-dodgers is "corporate inversion" or "corporate expatriates," but they are tax cheats, pure and simple. They don't move anywhere, they just get a shell address so they won't have to pay their share of taxes. And guess who gets stuck paying their share instead?

Here's Rep. Richard Neal of Massachusetts on how it works: "Let's take Tyco, formerly of New Hampshire, now of Bermuda, for example. Tyco avoids paying $400 million a year in U.S. taxes by setting up a shell headquarters offshore, but it was awarded $182 million in lucrative defense and homeland security-related contracts in 2001 alone. If Tyco had just paid its tax bill, Congress could easily have paid for 400 explosive detection systems (EDS), which are badly needed to protect U.S. travelers at airports around the nation."

If this is what Republicans want to stand for, fine with me. Their leadership has thwarted all efforts to have a debate and vote on a separate bill, the Corporate Patriot Enforcement Act, a bipartisan bill to deny benefits to corporations that flee to tax havens.

And why would Republicans do such a despicable thing? Well, let's look at the lobbyists hired to fight the offshore provision: former Republican presidential candidate Robert Dole (paid by Tyco), former House Ways and Means chairman Bill Archer, Bush family confidant Charlie Black, former House Appropriations Committee chair Robert Livingston, former Sen. Dennis DeConcini (one of the Keating Five) and Reagan White House chief of staff Kenneth Duberstein.

The Homeland Security bill was 35 pages long when President Bush, who had long opposed it, did a 180 in the summer and pretended he invented it. The bill has now become a 435-page behemoth, so larded with pork and special-interest legislation that Sen. Robert Byrd kept dropping the phone-book sized bill on his desk, repeatedly calling it "this mon-tros-ity."

The other special provisions tucked in the bill to reward other big Republican contributors are almost as disgusting. I must admit that the amendment protecting the Eli Lily Co. from future lawsuits is a fine example of really fast service for a contributor. It was just a few weeks ago that The New York Times ran the first serious look at Thimerosal, the vaccine preservative that may be related to autism, and -- wham, bam -- no problem for the Lily company. The purpose of that stinking amendment could not possibly be clearer. The Lily Co. bought itself a very nice piece of legislation, indeed.

It's one thing to pass this kind of special-interest legislation. It's another to call it "patriotism." That could gag a maggot. n

Molly Ivins writes for Creators Syndicate and the Fort Worth Star-Telegraph.

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