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Obama at lunchIf you’re sitting at your computer waiting for the President’s speech to commence at N.C. State (or in the audience staring at your smart phone), here are a few interesting links to keep you occupied:

First off, it looks like our leftist-socialist President continues to fail in his crusade to bring down capitalism. The Charlotte O reports this morning that Bank of America is the latest financial institution to report huge profits — in this case, the largest in six years.

Meanwhile click here to see the history of the Dow Jones Industrial Average — which has been going pretty much nowhere but up throughout the Obama years. Back to the drawing board, comrades!

As for Obama’s prominent NC critics, both Gov. (“It’s all Bev’s fault”) McCrory and Sec. Aldona (“Heck of a job, Donie!”) Wos are apparently showing up to pay their respects to the Prez today. Good for them for rising at least slightly above partisan politics. Perhaps they’re feeling some kinship with someone struggling in the polls.

If she gets to say “howdy,” though, Wos might want to ditch the “everything is Obama’s fault” rap. As Sarah Ovaska reported this morning on the main PW page, Read More

Microsoft, the software titan familiar to most Americans, has benefited handsomely from using loopholes in the federal tax code to avoid paying its fair share of corporate income taxes. The corporation has avoided paying $4.5 billion in U.S. income taxes in recent years, according to evidence presented by the Senate Permanent Subcommittee on Investigations (PSI).

To avoid paying income taxes, Microsoft “sold” the right to market its products in the Americas to an offshore subsidiary, which then “licensed” back to the parent company the right to sell its products in the United States. The effect was that in 2011, almost half of the value of Microsoft’s U.S. sales was channeled offshore, and through this “transfer-pricing” shell game the company avoided $4.5 billion in U.S. income taxes over three years.

Senator Carl Levin’s Stop Tax Haven Abuse Act (S. 1533) bill would close two tax loopholes that corporations use to shuffle their intangible property, like licenses and patents, to offshore subsidiaries and dodge paying the taxes they owe. Closing these two loopholes would raise $23 billion in revenue over 10 years. Eliminating such corporate tax loopholes represents a positive step forward in ensuring that profitable corporations such as Microsoft, among others, pay their fair share of taxes.

The Stop Tax Haven Abuse Act (S. 1533) would raise about $220 billion over the next decade by closing tax loopholes that encourage U.S. corporations to move jobs, profits and operations offshore and allow them to not pay their fair share of taxes.  As my colleague has noted, these costly tax breaks are undermining our ability to invest in the foundations of economic opportunity – an educated workforce, research and development, and healthy families.  Across the board cuts, known as sequestration, are taking their toll in North Carolina and closing corporate tax loopholes is the best way to replace a second round of cuts.

Here is just one example of a company that would no longer be able to benefit from tax loopholes if the Stop Tax Haven Abuse Act is passed. Read More

Blog contribution provided by Tazra Mitchell, Public Policy Analyst with the NC Budget and Tax Center

The federal budget process would become a bit more stable and predictable if the recently introduced Stop Tax Haven Abuse Act is enacted. This bill, which has been introduced by Senator Carl Levin, would raise at least $200 billion over the next 10 years by closing corporate tax loopholes that allows multinationals to shield their offshore profits from taxation. The bill’s passage would deliver a more balanced approach to addressing the federal deficit and help prevent a second round of across-the-board cuts that will only further harm the nation’s most vulnerable citizens at a time when hardship remains high. Read More

This is the first of a four-part blog series presenting voices from other states that have unsuccessfully pursued versions of comprehensive tax “reform.”

gbpi

Commentary provided by Alan Essig, Executive Director of the Georgia Budget and Policy Institute in Atlanta, GA.

As North Carolina considers major tax reform, it’s useful to take a look at a similar effort in Georgia a few years ago, because what started out as a plan to overhaul the state’s tax system in a responsible way that preserved important state investments quickly devolved into a proposal that put ideology and politics above the welfare of Georgians.

The core of Georgia’s problem was similar to what you are now seeing in North Carolina: the pursuit of drastic income tax cuts paired with a failure to replace this with another revenue source makes it impossible for a state to provide the services that people and businesses depend on every day, like roads, schools, and safe communities. Georgia wisely chose to reject such a proposal in 2011, just as North Carolina should this year. Read More