Top photo: Hillary Clinton and
Bill Clinton in Las Vegas in February.
In public, top Hillary
Clinton surrogate
Neera Tanden said at
the Democratic convention in Philadelphia that there’s no need to
cut the federal corporate tax rate from its current 35 percent.
But in
private, Clinton says something quite different
to corporations and trade groups.
An 80-page
report compiled by Clinton’s own campaign of potentially damaging
remarks she made behind closed doors was published by Wikileaks on Friday. It
includes extensive comments on tax policy.
During an October 13, 2014,
speech to the Council of Insurance Agents and Brokers, Clinton told the
audience that “A number of business leaders have been talking to my
husband and me about an idea that would allow the repatriation of the couple
trillion dollars that are out there. And you would get a lower rate — a really
low rate — if you were willing to invest a percentage in an infrastructure
bank.”
Clinton has repeatedly called
for increased spending on U.S. infrastructure, but has never specified where
the needed revenue would come from.
In a speech the previous month
to the Cardiovascular Research Foundation, Clinton also said that a lower
rate for all corporate profits regardless of where they are earned “certainly
could be on the table” as long as that was “part of a broader package.”
However, she specified that “if all you do is lower the rates” that “there’s
a price to pay” in terms of lower tax revenue.
American
multinational corporations are currently stashing a staggering
$2.4 trillion in profits — about 14 percent of the size of the entire
U.S. economy — overseas. Multinationals are required by U.S. law to pay
the statutory 35 percent tax on profits they earn anywhere on
earth, but the tax is not assessed until the profits are brought back to the
U.S.
This has allowed Corporate
America to essentially hold U.S. tax revenue hostage, refusing to pay its taxes
until Americans become so desperate that they will cut a deal giving
multinationals a special new tax rate.
This strategy has already paid
off once, in 2004, when multinationals got Congress to let them bring
back $312 billion in profits at a one-time rate of about 5
percent. The legislation required that the cash be used to hire Americans or
conduct research and development. Corporations ignored these provisions and
instead used the money to enrich their executives and stockholders, while
cutting U.S. jobs.
Both Hillary and Bill Clinton
clearly envision cutting a similar deal during a Hillary Clinton presidency,
although presumably they intend for the corporations to keep their part of the
bargain this time.
Former U.S. President Bill
Clinton delivers a speech during the annual Clinton Global Initiative on
September 21, 2016 in New York.
Photo: Stephanie Keith/Getty
Images
Just last month, Bill Clinton told the audience at a Clinton Foundation Event that the corporate tax rate “should be lowered” with “X percent of [repatriated profits], whatever percent, [going] into buying investments in the national infrastructure program.” Clinton added, “This is just me now, I’m not speaking for …” and then trailed off.
Hillary Clinton said the same
thing during a private August 2014 speech to the software storage
company Nexenta: “I would like to find a way to repatriate the overseas
earnings and I’ve read a really interesting proposal. … John Chambers and
others … basically have said they would be willing to invest a
percentage of their repatriated profits in an infrastructure bank … I
thought that was a really intriguing idea.”
Chambers was the CEO of Cisco
at the time, and a vociferous
proponent of corporations refusing to bring their profits home until they
receive such a sweetheart deal.
Donald Trump has a similar plan
to slash corporate tax rates to 15 percent (with a special rate for repatriated
profits of 10 percent) although without requirements for corporations to
participate in funding an infrastructure bank.
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