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March 10, 2016 12:06 PM UTC

Rep. Lawrence: Offshore Havens a "Legitimate Tax Loophole"

  • 19 Comments
  • by: Colorado Pols
Rep. Polly Lawrence (R).
Rep. Polly Lawrence (R).

Yesterday, the Colorado House passed House Bill 16-1275, “Concerning the taxation of a corporation’s state income that is sheltered in a foreign jurisdiction for the purposes of tax avoidance,” on a 34-30 party-line vote. The Grand Junction Sentinel’s Charles Ashby reports on the debate over the bill:

Democrats say it’s a matter of fairness that all companies earning profits in Colorado should pay taxes. Republicans say this isn’t a good time to force that issue…

House Speaker Dickey Lee Hullinghorst, D-Boulder, said Republicans’ opposition of the measure only goes to show why voters have such a mistrust of government. It’s the Colorado voters, and not big corporations, who lawmakers represent, and it’s for them the bill is intended to bring fairness, she said.

“We’re sending a message to the hard-working people of Colorado that we stand behind them,” she said. “We stand behind leveling the playing field for them. This is taking one small piece of our tax code and saying to big corporations, ‘You will no longer have the opportunity to pick a tax haven and not pay taxes.’ We all pay our income taxes. They should have to pay, too.” [Pols emphasis]

House Republicans were, needless to say, unreceptive to these arguments–but in the course of opposing this bill, at least one Republican legislator went a little too far in standing up for the rights of corporations to stash their cash overseas to avoid taxes:

LAWRENCE: This isn’t about leveling the playing field. This is about getting more money because we mismanage funds down here and we need to spend more. So we’re looking for pockets everywhere we can find them.

And because companies are using a legitimate tax loophole, [Pols emphasis] that we all take advantage of in one way or another, whether it’s our home mortgage deduction, whether it’s a home office deduction, there are benefits that each of us take advantage of when we file our taxes every year. This is one that corporations take advantage of. And it’s legal.

Got that, Mr. and Mrs. Taxpayer? Your mortgage deduction is just like what corporations do when they shelter their profits in the Cayman Islands! Never mind the polling that shows 73% of Americans want loopholes allowing U.S. taxes to be avoided by shifting income to overseas tax havens closed.

We’re going to go out on a limb and assume that 73% of Americans do not feel that way about their mortgage deduction.

We recognize that the debate about tax policy and tax avoidance by corporations and wealthy individuals is complex, and that sincere individuals can argue both sides of the question. With that said, Rep. Lawrence’s equating offshore tax havens with the mortgage deduction so many of her constituents rely on to afford their homes betrays a serious lack of judgment, empathy, or both.

Comments

19 thoughts on “Rep. Lawrence: Offshore Havens a “Legitimate Tax Loophole”

      1. Enslavement was the law at one time, too.  The 1%-ers of those days convinced everyone else to fight a Civil War so they could maintain their way of life. 

    1. That would be what the proposed law addresses. You see, we pass these things called laws that dictate acceptable behaviors, and government revenue streams, and government spending… We elect this thing called a Legislature to evaluate what changes need to be made in existing laws, and when they pass those changes, things have to change to match.

      Rep. Lawrence suggests that it's legal now, so why should we think about changing it, or complain about problems with it. You're on the same boat? I'm guessing you wouldn't have that same view ("why change the law?") about the laws protecting abortion, or prohibiting the spending of government money on education…

  1. All loopholes are legitimate in the eyes of those who obtained the loopholes. But this is really a national issue, not a state issue. What's present here is a form of double taxation. Corporations pay income tax on their income after which part of their net income is passed on to shareholders in the form of dividends which get taxed again. The US has about the largest corporate tax rate among developed countries. Way to get much of that money stashed overseas back home is to lower the corporate tax rate.

    Of course, "good old confiscatory Bernie" wants to raise taxes on all taxpayers to pay for all his free stuff. Look no further than Argentina and Venezuela to see what unfettered socialism can do.

    1. The US has about the largest corporate tax rate among developed countries.  

      "about" the largest?…so you're not sure of that? You know, CHB, Colorado has about the same severance tax rate for oil and gas development as the rest of the Rocky Mountain states. But they take in much less money because Colorado, and only Colorado, gives O&G, and only O&G, an "ad valorem tax credit that brings it down to an effective rate of less that 2%.

      Rates can be deceiving.

      1. Indeed, rates can be deceiving. Have you visited the web site of the National Conference of State Legislatures? Looking through their stuff, it does appear that most western states have higher severance tax rates than does Colorado. But there are a wide variety of rates and exceptions in some western states. Interestingly, they cover just O & G, not hard rock minerals. 

        "You're not sure of that……."  Been a few months since I saw an article; in either Bloomberg Business Week or The Economist. 

    2. That's the same logic that gave us Delaware corporations and North Dakota credit cards. The same logic that Republicans want to apply to healthcare – sink to the lowest common denominator to make it all better for business. Maybe we should enforce good civics on our corporations rather than allow them to be sleazy within the law.

        1. Kochs and Brownback? Probably, but it makes us wonder where Polly Lawrence is banking? Lawrence is out of step with her GOP presidential contenders who are trying to keep corporate interests, banking and jobs in USA. 

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