“If Mitt Romney won’t tell you which ones need to be closed, we will”

By Chris Parker

A four page article on CityPages News  names 10 corrupt US tax loopholes

“A year ago Citizens for Tax Justice, a Washington, D.C., nonprofit, studied the tax returns of 280 corporations. What it found was a Beltway version of a Mafia protection scheme.

“From 2008 to 2010, at least 30 Fortune 500 companies — including PepsiCo, Verizon, Wells Fargo, and DuPont — paid more for lobbyists than they did in taxes. They collectively spent $476 million sucking up to Congress, buying protection for tax breaks, loopholes, and special subsidies.

“It didn’t matter that these same 30 firms brought home a staggering $164 billion in profit during that three-year period. They not only managed to avoid paying taxes, they actually received $10.6 billion in rebates.

“Welcome to the U.S. tax code, where companies like General Electric and Boeing contribute less to the federal treasury than a retired machinist living in Florida.

“Defenders of the system argue that most deductions don’t go to large corporations. That’s true. By pure dollars, the lion’s share go for mortgage interest, employer-paid health insurance, retirement plans, and Medicare benefits.

“The difference is these tend to benefit everyone. They’re designed for the greater good, reinforcing the pillars of self-determination: home ownership, savings, and health care.

“But there’s another part of the tax code where 99 percent of America is barred from entry. It’s where Congress sells loopholes and subsidies to those with the wallets to pay. They not only screw the rest of the country — which is forced to cover the tab — but turn any notion of a free market into situational comedy.”

The story names the ten as:

10 I’m Irish. No, Really

9 How to lower your taxes by sitting on your ass

8 The Sheryl Crow loophole

7 Getting rich, Facebook style

6 My other home’s a yacht

5 Big Oil’s Cadillac welfare

4 A break for shipping your job to China

3 The behaving like an ass—- deduction

1 The corporate blackmail exemption

and at Number 2 ……….  No it isn’t the cayman Islands although we get a sort of “honourable” mention and a quote from Tony Travers!

2 Delaware, the Cayman Islands of America.

Just outside of Philadelphia sits a tax haven so egregious the Cayman Islands complain about us. It’s called Delaware, a tiny state that allows American companies to set up fake headquarters so they can avoid taxes in their own states.

Delaware does it by asking fewer questions than a needle exchange. Like the Caymans, it doesn’t tax assets like royalties, leases, trademarks, and copyrights. So U.S. companies create shell firms in Delaware, then “sell” their intellectual property to them. By leasing their own inventions from these fake companies, corporations have dodged $9.5 billion in state taxes over the past decade.

The trailblazer for such schemes was WorldCom, the famed telecommunications company that imploded in 2002 after being caught cooking its books. In one scam, WorldCom pretended to pay its Delaware shell company $20 billion in royalties for the questionable asset of “management foresight.” Though there were no managers in Delaware, and no real money changed hands, WorldCom was able to reduce its state taxes by hundreds of millions.

Such scheming is so commonplace that Delaware is home to more corporations (945,326) than it is people (897,934). Even the patron saint of tax evasion, the Cayman Islands, sniffs over the state’s corrupt practices.

“There should be a level playing field and Delaware should have to comply with the same standards as the Caymans,” says Anthony Travers, chairman of the Cayman Islands Stock Exchange.

Johnson likens the Delaware strategy to one first professed by Clyde Barrow, the Depression-era bank robber.

“Near the end of Bonnie and Clyde, they’re lying around in bed after making out and Bonnie says, ‘Anything you’d do different?’ And Clyde says, ‘I think we shoulda lived in one state and done our bank robbery in another state,'” says the professor.

“The answer is if you’re a corporation, that’s exactly what you do.”

For the whole article go to:

http://www.citypages.com/2012-10-10/news/the-10-most-corrupt-tax-loopholes/