Wednesday, July 30, 2014

CBO is Substantially Misleading the US Public on the Cost Of Corporate Inversions

The CBO just estimated that the cost to the US Government of Corporate Inversions over the next 10 years is less than $20 bil.

But just one attempted but so far failed corporate inversion by Pfizer and Astra Zeneca would have resulted in a reduction in US Federal Income Taxes Paid of about $1 bil per year, with such amounts increasing each year.

And there have been many actual corporate inversions announced very recently.....Abbvie's $54 bil acquisition of Shire and Medtronic's $43 bil acquisition of Covidien, just to name two of the many.  

With such a ludicrous CBO cost estimate of less than $20 bil over 10 years for Corporate Inversions, which has to be understated by at least 5 times, the CBO is not serving the best interests of US citizens.

When you have a US Government Agency whose cost estimate is clearly off by so much on such a critical issue, it is high time for someone outside the US Government to audit the reasonableness of critical CBO estimates.  And it is also high time for academic CBO economists making such incredibly inaccurate estimates to get some real-world business experience.  Just sayin!

On the positive side, in May 2014 about 14 US Democratic Senators introduced the "STOP CORPORATE INVERSIONS ACT of 2014", led by Michigan US Senator Carl Levin.  Also, Levin's brother introduced similar companion legislation in the US House.

And in late July 2014, US Senators Carl Levin from Michigan and Dick Durbin from Illinois and US House of Representative members Rosa DeLauro from progressive New Haven, Connecticut where Yale is based and Lloyd Doggett from progressive Austin, Texas where the University of Texas is based introduced the "No  Federal Contracts for Corporate Deserters Act", which focuses on Corporate Inversions.

But still, US Congressional Republicans and even some Democrats, all controlled by large US Corporations and their lobbyists, have elected to not pursue this legislation, which would prevent or at least substantially curtail these unpatriotic actions of some large US Corporations which are so substantially detrimental to the finances of both the US Federal Government and the US State Governments.

If there were a properly explained poll taken on whether the massive tax benefits of Corporate Inversions should be allowed for US Federal Income Tax and US State Income Tax purposes, I am certain that more than 90% of US citizens would say that they should not be allowed.  Just this one issue tells you why the country has such a low approval rating of the US Congress, where so many of them.....nearly all Republicans and even some Democrats.....proclaim that they don't favor wealthy citizens and large Corporations over everyone else, but consistently vote otherwise.