60 Minutes on Corporate Taxes

http://www.futureofcapitalism.com/2011/03/60-minutes-on-corporate-taxes

American corporations moving business overseas to avoid America's high corporate tax rates was the topic of a thirteen-and-a-half minute story by Leslie Stahl on CBS News' "60 Minutes" show Sunday.

Whether by coincidence or by some concerted effort by a pressure group, the article featured two of the same sources that the New York Times relied on for its article last week on how General Electric isn't paying much U.S. corporate tax: a Democratic congressman, Lloyd Doggett, and an economist who writes for a non-profit organization, Martin Sullivan.

On a certain level, it was an illuminating story, because it showed how America's high corporate tax rate essentially pushes economic activity to lower-tax jurisdictions overseas. But it was also a frustrating story to watch, because, like the Times, "60 Minutes" seems to be coming at it from the perspective of wanting to dream up some way to force the companies to pay higher taxes.

Ms. Stahl seems to think her viewers are a bunch of ignoramuses. At one point, she strolls through the streets of Zug, Switzerland, a low tax jurisdiction that has attracted two formerly Texas-based companies, TransOcean and Weatherford. "I don't think anyone's ever heard of Zug in the United States," she says. What, she doesn't think anyone read Seth Lipsky's op-ed piece in the New York Times? Clearly the executives of the companies that are moving there have heard of the place, as have their tax lawyers.

Cisco's CEO, John Chambers, did a valiant job of trying to make the case for lower corporate tax rates in America, but in classic "60 Minutes" fashion Ms. Stahl made him look like the bad guy, mixing his words in with clips of Mr. Sullivan talking about "accounting tricks" and with her own claim that it "sounds" like Mr. Chambers is asking for some kind of favor.

One of my key tests for a country has always been whether people are lined up trying to sneak in or lined up trying to sneak out. East Berlin, North Korea, and the Soviet Union are bad by that test; America is good, because immigrants want to come here. You could apply a similar test to countries for whether companies want to be based there. America shouldn't have to pass some kind of law preventing companies from moving their operations to Zug or Ireland, as Mr. Doggett seems to suggest. We should have laws that create such an attractive business environment that the companies in Zug and in Ireland are falling over themselves trying to figure out a way to move here.

by Ira Stoll  |  Mar 27, 2011 at 9:59 pm Related Topics:  General Electric, Immigration, Press, Taxes receive the latest by email: subscribe to the free futureofcapitalism.com mailing list