A lobbying coalition advocating for a tax holiday for repatriating offshore profits has disbanded, said a lobbyist who worked on the effort who wouldn’t publicly discuss the reasons for the decision.

The Win America Campaign, which included Cisco Systems Inc., Microsoft Corp. and Apple Inc., ended its relationship with two of its three lobbying firms in March, according to forms filed with the U.S. Senate last week. The group spent more than a year and $760,000 on the effort, according to public filings.

The group wanted Congress to repeat a 2004 tax holiday that let companies bring home offshore profits at a discount. Critics, including the Obama administration, said the proposal would cost the government money, encourage companies to move profits offshore and undermine efforts to overhaul the U.S. tax code.

The lobbyist said prospects for the legislation weren’t promising, which contributed to the decision to disband the group.

Doug Thornell, who had been a spokesman for the campaign, declined to comment.

The bill is H.R. 1834.

Originally published on Bloomberg.

“U.S. multinational corporations should not be rewarded for hurting our Main Street economy by shielding money in tax haven countries, moving jobs offshore and using tricky accounting maneuvers to avoid paying taxes,” said Joseph Rotella, owner of Spencer Organ Company in Waltham, Mass. and a member of Business for Shared Prosperity. “Taxes are not just numbers in spreadsheets. They provide the revenues that pay for public safety, public schools, public transportation and other infrastructure and services that businesses and customers rely on. We need to stop the tax haven abuse that lets big corporations avoid paying their fair share and gives them an unfair advantage in the marketplace.”

The U.S. PIRG report illustrates the high cost of corporate tax avoidance by using data from the Census Bureau and U.S. Senate to calculate the amount small businesses would need to pay if they were to compensate for the annual $60 billion in tax revenue lost because of corporate tax dodging through offshore tax havens. According to the report, small businesses with fewer than 100 employees would have to pay on average an additional $2,116 in taxes to make up for the large shortfall in revenues.

A recent national, independent survey also revealed that 91 percent of small business owners agreed that U.S. multinational corporations’ use of accounting loopholes to avoid taxes by shifting profits offshore is a problem. Moreover, three out of four owners said loopholes allowing big corporations to avoid taxes harmed their small business.

“America’s corporate profits as a share of our nation’s economy are at a 50-year high, yet at the same time corporate taxes as a share of our economy are at a 50-year low,” said Scott Klinger, director of tax policy for BSP and ASBC. “Big business tax avoidance has increased the pressure for deep budget cutbacks, draining our nation of the strategic investments needed to rebuild our crumbling infrastructure and support the education, research and development underpinning economic success.”

BSP, ASBC and MSA have sponsored a petition calling for strong legislation to stop tax haven abuse, signed by more than 1,100 business owners and leaders to date. Specifically, the organizations have endorsed the Stop Tax Haven Abuse Act and the CUT Loopholes Act, legislation sponsored by Senator Carl Levin to rein in tax haven abuse and recover lost revenues.

Read the U.S. PIRG report here: http://uspirg.org/reports/usp/picking-tab

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Business for Shared Prosperity is a network of forward thinking business owners, executives and investors. BSP has organized petitions for positive tax reform and for ending tax haven abuse and produced related reports. BSP is a member of the American Sustainable Business Council. www.businessforsharedprosperity.org

The American Sustainable Business Council is a growing coalition of business networks representing over 100,000 companies and 200,000 business leaders. ASBC advocates for public policies that meet the realities of the 21st century global economy. www.asbcouncil.org

By David Ingram and Patrick Temple-West

WASHINGTON – Huge U.S. corporations are forming lobbying groups to try to influence what could become the hottest congressional debate over comprehensive tax reform in a generation.

The newest organization calls itself the Tax Reform Coalition. Backed by companies including American Express Co and Xerox Corp, it filed paperwork with Congress this week to register as a lobbying group.

The coalition’s registration suggests it will have a broad portfolio, lobbying on “issues related to corporate tax reform,” but no one involved would answer questions on Friday.

It joins an increasingly crowded playing field of lobbying groups and politicians strategizing for what Washington will look like in 2013 following national elections in November 2012.

Another lobbying group, the RATE Coalition, was formed in October and pushes for a cut in the 35 percent tax rate on corporate profits.

WIN America Campaign, a third group, has been advocating since March for a tax holiday for profits that U.S. companies made overseas. Its supporters include multinationals and Washington’s largest business lobbying group, the U.S. Chamber of Commerce.

John Buckley, a tax professor at Georgetown University Law Center, said that during the most recent major U.S. tax overhaul in 1986, businesses formed a large coalition to support it.

“They were able to shape it,” Buckley said, and “that’s what people want to do now.”

The uptick in lobbying activity follows a proposal two months ago by U.S. Representative Dave Camp, chairman of the tax-writing House Ways and Means Committee. Camp, a Republican, said he wants a lower corporate rate, an exemption for overseas profits and other changes.

CAMPAIGN ISSUE

Republican hopefuls in the race for the November 2012 presidential election have put forward tax proposals with similar ideas, launching speculation that 2013 may be a defining year in Congress for U.S. tax policy.

Companies are choosing to organize now.

“There’s a lot of risk in waiting to weigh in on something like tax reform,” said Clint Stretch, managing principal of tax policy at Deloitte Tax.

“You’re going to see more and more companies trying to figure out how to have a voice” in the tax debate, he said.

Four large U.S. companies are listed as the backers of the Tax Reform Coalition: American Express Co, Intel Corp Tupperware Brands Corp and Xerox Corp. They have hired a former lawyer on the Ways and Means Committee as one of their lobbyists.

It was not immediately clear how much the organizations will work together.

The RATE Coalition is larger than the newer Tax Reform Coalition. It claims 25 member companies, with Intel a member of both groups. While it urges a cut in the corporate rate, it is agnostic on other changes.

WIN America is even more narrowly focused on the issue known as repatriation. U.S. companies must pay tax on earnings abroad when they bring the money home, minus a credit for foreign tax paid, and many have chosen to leave their profits elsewhere even if the money sits nearly idle.

Spokeswomen for the RATE Coalition and WIN America said they were not aware of the newest group.

COORDINATION OR COMPETITION?

By forming broad alliances, companies are able to pull together research, consulting staffs and other resources, said Jim McCrery, a former Republican congressman who now lobbies for WIN America and others.

“They’re able to marshal their resources in a coordinated fashion,” said McCrery, a partner at Capitol Counsel.

Corporate groups face an especially skeptical audience in congressional Democrats. Representative Sander Levin of the Ways and Means Committee has said that some of the ideas under discussion would cause a further shift in the tax burden from the wealthy to the middle class.

President Barack Obama has criticized the idea of cutting taxes on U.S. companies’ operations abroad.

But the prospect of a historic change means companies are preparing to have their say.

“There’s lots of people that have their hand in this, as one would expect. When you’re talking about rewriting the Internal Revenue Code, that tends to get people’s attention,” said Kenneth Kies, managing director of the Federal Policy Group.

(Editing by Howard Goller and Tim Dobbyn)

Published by Reuters.

America Cannot Afford Another Tax Break for Corporations;

Groups Representing Millions of Taxpayers from Across the Country Send a Message.

Washington – As Congress wrestles with a number of tax-related issues to close out the year, faith-based, small business, union and public interest organizations from California to Maine sent a letter to Senate and House leaders railing against a tax  break that previously failed to produce jobs and largely benefited a small percentage of corporations.  Not to be confused with the payroll tax holiday for workers, the corporate tax holiday would allow businesses to pay an extremely low rate of tax for money kept offshore – rewarding those who keep jobs and profits outside of the U.S.  These groups, which represent over 15 million taxpayers, stand in square opposition to the large corporations and their lobbyists who seek this sizable tax break.

Groups from across the political spectrum have continued to debunk the myths that any corporate tax holiday will benefit the government, taxpayers, job creators or workers. In fact, they argue it would make matters worse.

An excerpt from the letter, which also signed by government transparency, tax, human rights, anti-corruption, environmental and economic justice groups, reads:

“If Congress repeats the 2004 holiday, multinational corporations will quite rightfully expect that another holiday will be enacted in a few years. They will have enormous incentive to engage in ever more aggressive tax schemes that move their profits to foreign jurisdictions. In fact, the 20 companies who repatriated the most earnings under the 2004 holiday are already anticipating the next holiday – they now have three times as much in foreign profits parked offshore as they did at the end of 2005.

We urge you to reject the proposals for a repatriation holiday. The multinationals who are lobbying hard for this tax break offer numerous reasons why you should give them this generous reprieve. But their plea for a repatriation holiday is nothing more than a blatant attempt to escape their tax obligations and shift the burden onto the taxpaying American public.”

The FACT coalition includes a broad range of organizations with an interest in seeing the loopholes closed due to their impact on jobs, critical programs, small businesses, human rights, corruption and national security. For a full list of member organizations and campaign information visit http://www.tjn-usa.org/current-campaigns.

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CONTACT: Bob Keener, 617-610-6766, bobkeener@businessforsharedprosperity.org

By employing a plethora of tax-dodging techniques, 30 multi-million dollar American corporations expended more money lobbying Congress than they paid in federal income taxes between 2008 and 2010, ultimately spending approximately $400,000 every day — including weekends — during that three-year period to lobby lawmakers and influence political elections, according to a new report from the non-partisan Public Campaign.

The Public Campaign report expanded on a newly released analysis on corporate tax dodging by the liberal-leaning Citizens for Tax Justice, a non-profit research and advocacy group, as well as lobbying expenditure data provided by the non-partisan Center for Responsive Politics.

Citizens for Tax Justice, the sister organization to the Institute on Taxation and Economic Policy, reports that 68 of the 265 most consistently profitable Fortune 500 companies did not pay a state corporate income tax during at least one year between 2008 and 2010, while 20 of them paid no taxes at all during that period.

“Our report shows these corporations raked in a combined $1.33 trillion in profits in the last three years, and far too many have managed to shelter half or more of their profits from state taxes,” Matthew Gardner, Executive Director at the Institute on Taxation and Economic Policy and the report’s co-author, said in a statement. “They’re so busy avoiding taxes, it’s no wonder they’re not creating any new jobs.”

According to the report, titled “Corporate Tax Dodging in the Fifty States, 2008-2010,” state corporate tax revenues have been declining for 20 years, due to the passage of multiple state tax subsidies, as well federal tax breaks that further reduce state corporate income tax revenues since states usually accept corporations’ federal tax. Moreover, Gardner said multi-state corporations are constantly “devoting their money and legal firepower to coming up with tax avoidance schemes.”

Between 2008 and 2010, the 265 companies analyzed paid state income taxes equal to only 3 percent of their U.S. profits, half of the statutory 6.2 percent state corporate tax rate. As a result, these companies avoided a total of $42.7 billion in state corporate taxes over three years.

“As recently as 1986, state corporate income taxes equaled 0.5 percent of nationwide Gross State Product (a measure of nationwide economic activity),” states the report. “But in fiscal year 2010, state and local corporate income taxes were just 0.28 percent of nationwide GSP, equaling the low-water mark set in 2002.”

Companies’ Laying Off Workers While Receiving Tax Rebates, Raising Executive Pay

Among the 20 companies who paid zero or less in state corporate taxes are utility provider Pepco Holdings, the pharmaceutical company Baxter International, and Intel Corporation (INTC).

Baxter International (BAX) and Intel are among the corporations that Public Campaign reports did not did not pay federal incomes during the same three-year period.

Of those companies, General Electric (GE) spent the most on lobbying, expending about $84 million on lobbying while paying a federal income tax rate of negative 45 percent on more than $10 billion in U.S. profits. PG&E Corp. followed General Electric, spending almost $79 million on lobbying, while paying a negative 21 percent tax rate on $4.8 billion of U.S profits, and Verizon Communications, which spent $52 billion on lobbying while paying a negative 3 percent tax rate on $32.5 billion of profits.

A negative effective tax rate means that a company enjoyed a tax rebate, usually obtained by carrying back excess tax deductions and credits to an earlier year, thereby allowing the company to receive a tax rebate check, according to Citizens for Tax Justice.

U.S. House Deputy Whip Kevin Brady, R-Tex., is currently making a last-ditch effort to include a corporate tax repatriation holiday on legislation to extend a payroll tax cut, an extension that Senate Majority Leader Harry Reid, D-Nev., said could put an extra $1,500 into the pockets of middle class families each year. While those in favor of the corporate tax repatriation provision — which would give U.S. businesses a temporary tax break on as much as $1 trillion in overseas income — insist it would boost the nation’s sluggish economy and make it easier for corporations to create jobs, the Congressional Budget Office reports tax repatriation holidays ranks dead last among 13 policy options for creating jobs. The CBO estimates that over the 2012-2013 period, a repatriation holiday would, at best, create the equivalent of one-full time job for every $1 million in federal costs.

Even while dodging most of their state and federal taxes between 2008 and 2010, Verizon (VZ) laid off more than 21,000 U.S. employees, while Boeing, Wells Fargo, General Electric, American Electric Power, and FedEx also let go of thousands of workers. Because companies can be reluctant to make data changes in U.S. employment available, Public Campaign reports it was not able to find up-to-date employment statistics for many of the companies evaluated in the report.

Moreover, as it was laying off employees, General Electric gave their top executives a 27 percent pay raise between 2008 and 2010 — executives received more than $75 million in compensation in 2010. Wells Fargo increased executive pay by a whopping 180 percent, upping executive compensation from $17.8 million in 2008 to almost $50 million in 2010, while Boeing,  FedEx and American Electric Power also instituted lavish executive pay raises while laying off thousands of lower-level workers.

In fact, 2010 year was a record year for executive compensation. The CEO’s of some of the largest U.S. corporations made, on average, $11.4 million in 2010, about 343 times more than workers’ median pay, according to an analysis by the American Federation of Labor, the widest gap between executive and employee pay in the world. CEO pay has skyrocketed since 1980, when chief executives were only paid about 42 times more than the average blue collar worker.

Meanwhile, the U.S. Census Bureau reports that the median household income fell $3,719 between 2000 and 2010, when measured in 2010 dollars.

Public Campaign released its report on Wednesday, just as thousands of unemployed Americans from across the nation swarmed K Street in Washington, D.C., the lobbying center for some of the world’s most profitable corporations. The march was part of “Take Back the Capitol,” a four-day series of events aimed at persuading Congress to pass comprehensive job creation measure that will benefit their constituents, rather than special interest groups.

http://img.ibtimes.com/www/articles/20111209/264481_30-major-u-s-corporations-paid-lobby.htm

The U.S. Women’s Chamber of Commerce strongly opposes legislation in Congress that would reward U.S. multinational corporations with massive, unwarranted tax discounts to bring back hundreds of billions in U.S. profits they shifted offshore to avoid paying taxes in the first place. …

Read the full article on thehill.com

“Our report shows these corporations raked in a combined $1.33 trillion in profits in the last three years, and far too many have managed to shelter half or more of their profits from state taxes,” said Matthew Gardner, Executive Director at the Institute on Taxation and Economic Policy and the report’s co-author. “They’re so busy avoiding taxes, it’s no wonder they’re not creating any new jobs.”

Among the 20 corporations who paid zero or less in state corporate income taxes over the three year period are: Utility provider Pepco Holdings (DC); pharmaceutical giant Baxter International (IL); chemical maker DuPont (DE); fast food behemoth Yum Brands (KY); high tech manufacturer Intel (CA).

“Corporate Tax Dodging in the Fifty States, 2008-2010” concludes that these 265 corporations cost states $42.7 billion in lost revenues in the last three years, and Gardner identifies three chief causes for state corporate tax revenues steadily declining for two decades. …

Read the New York Times article about the report.

The full report is here.

By Holly Sklar
Distributed by McClatchy-Tribune News Service

Lobbyists are storming Capitol Hill, pushing a tax holiday that would give billions of dollars in tax breaks to less than 1 percent of American businesses – and stick the other 99 percent with the bill. But of course, they can’t say that. So tax holiday advocates are using a high-powered version of the email con known as the “Nigerian scam.”

You’re probably familiar with it: a prince, business executive or government official promises rich rewards for your urgently needed assistance to move “funds which are presently trapped in Nigeria” or some other country into the United States. “The con works by blinding the victim with promises of an unimaginable fortune,” the myth-busting Snopes.com explains. “He fails to realize during the sting that he’s never going to get the promised fortune.” He’s going to lose his shirt.

“Currently, there is over $1 trillion earned by American businesses trapped overseas that could be brought back and invested here at home,” the WIN America campaign for a tax holiday on “repatriated” corporate profits says in its mission statement. “There is no time to waste, our economy needs all the help it can get.”

Never mind that the money “trapped” overseas was moved by U.S. corporations to their subsidiaries in the Cayman Islands, Switzerland and other tax-haven countries in order to avoid taxes. As former Treasury Department economist Martin Sullivan told Bloomberg, “A lot of what companies report as foreign profit is really U.S. profit that should be subject to U.S. tax.”

For example, “Cisco transfers a portion of the patent rights to technology developed in the U.S. to a Dutch unit, which sells some of the resulting products back to its parent for eventual distribution in the U.S.,” Bloomberg reported. “Cisco credits about $5 billion in U.S. sales annually to the Netherlands.”

Cisco, Google, Pfizer and other big businesses in the WIN America campaign have deployed more than 160 lobbyists to convince Congress to let U.S. multinationals pay a “repatriation” tax rate as low as 5.25 percent. It would tilt the playing field even further against small businesses hiring, investing and paying taxes in America.

Most tax holiday legislation co-sponsors have received campaign donations from WIN America-affiliated companies, reports the Center for Public Integrity.

Congress already fell for this scam with a “one-time” tax holiday passed in 2004. Companies didn’t create the jobs or investment they promised – layoffs actually increased.

Instead, they boosted CEO pay, stock buybacks and shareholder dividends, and stockpiled even more money offshore to avoid taxes, according to reports by the Senate Permanent Subcommittee on Investigations, Congressional Research Service, National Bureau of Economic Research and others. Since 2004, the amount of earnings by U.S. corporations held offshore has more than tripled.

“Another temporary holiday may condition US multinationals to never routinely repatriate any foreign profits because, eventually, Congress can be expected to pass another ‘temporary’ tax holiday,” said a Goldman Sachs report.

As more people understand that another tax holiday would be bad for the U.S. economy, advocates are pitching a variation on the “I’ve got a bridge to sell you” scam that notorious con men like George C. Parker foisted on gullible buyers.

You can use our tax holiday to fund an infrastructure bank to buy bridges, roads and other public works, the hucksters pitch. In this crazy math, a tax holiday that the congressional Joint Committee on Taxation says will cost the U.S. Treasury $42 billion to $79 billion is supposed to finance an infrastructure bank.

If you believe that, I’ve got a bridge to sell you.

Here’s a real way to fund an infrastructure bank with a tax haven link: enact the Stop Tax Haven Abuse Act. That would put $100 billion a year into the U.S. Treasury that is now being lost to tax dodging through tax havens.

That would mean real money for rebuilding our infrastructure and other national priorities, which would strengthen Main Street business, job creation and our economy.

“We can’t afford the waste of another massive corporate tax break that rewards those who have made an art form of avoiding their tax responsibility through tax havens and other accounting manipulation,” says Dean Cycon, owner of Dean’s Beans coffee company.

America has suffered enough from corporate con artists.

Holly Sklar is director of Business for Shared Prosperity www.businessforsharedprosperity.org.

Copyright 2011 Holly Sklar