Corporate Inversions and Bridges to Re-Election

************************************************************************

Medtronic chooses to reward its shareholders instead of U.S. politicians

************************************************************************

Recently, Medtronic, famous for its high-tech cardiac and spinal devices, announced that it would acquire Dublin-based Covidien, which makes surgical tools and other medical supplies, and that the combined company will be domiciled in Ireland, practicing what is known as a corporate tax inversion which minimizes taxes paid to the U.S. government.

While Medtronic is making a business case for the deal, promising to find hundreds of millions in annual cost savings by moving overseas, there is no doubt that taxes are a major reason for the move to Ireland.

Senator Carl Levin continues to be aghast that taxpayers adhere to the tax code he has helped write and don’t effectively support congressional re-election campaigns

______________________________________________________

America’s federal corporate tax rate is 35%, which when combined with state and local levies rises to an average of nearly 40%. Ireland, on the other hand, has a corporate tax rate of 12.5%.

These smart business decisions have resulted in public floggings by Sen. Carl Levin’s investigations subcommittee on companies that legally seek to minimize tax bills.

While Senator Levin and his spendthrift colleagues claim they want U.S. businesses to “invest in America,” the dirty little not-so-secret is that U.S. taxpayers, whether individual, corporate, dead people’s estates or otherwise, do not “invest in the America” but in the politicians who need copious amounts of other people’s money to use as largesse for their electorate to remain in office. As stated previously (“Congress Says “Do As We Say, Not As We Legislate”, September 27, 2012), Mr. Levin and congress has the power to change the laws they created and make it beneficial to pay taxes in this country.

And it is a great irony that Liberals of Mr. Levin’s ilk are obsessed with the idea of too much money in political campaigns. Here’s a thought experiment: if the purists really want to keep money out of politics, how about factoring in the pork-barrel spending that congress does and then goes home and boasts to their constituency as a reason to vote for them?

It is doubtful, though, that they’d want to go after their own “bridges to re-election.”

-I.M. Windee


No Comments so far.

Leave a Reply