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October 28, 2003
New Push for Corporate Tax Cuts Gives Special Treatment to MultinationalsPresident Bush has promoted his tax plans in the past by promoting their fairness and that they "[don't] give special treatment to special interests."1 But as Congress considers legislation to staunch the bleeding of U.S. manufacturing jobs, the Bush Administration has been silent over proposed legislation that heavily favors multinational companies over U.S.-based manufacturers. Congress has been working on new legislation to prop up American manufacturing in response to the 2.5 million manufacturing jobs that have been lost since 2001.2 The legislation Congress is promoting would cut corporate taxes by $142 billion over the next ten years, in part by expanding who qualifies as a manufacturer. Industries now covered include agriculture, food processing, construction, architectural and engineering. One issue involves whether the proposed changes will actually serve the purpose of saving the U.S. manufacturing sector and encouraging corporate investment in the United States. This is because corporate taxes are at their lowest level since the 1930s, except for one year during Ronald Reagan's first term.3 The second issue involves fairness to U.S.-based companies. One bill offered by Ways and Means committee chairman Bill Thomas, focuses on relief for multinational firms, including expansion of tax shelters at a value of almost $80 billion. Another bill, the bipartisan Crane-Rangel bill, does not favor offshore manufacturers. Bush's top tax official, Assistant Treasury Secretary for Tax Policy Pamela Olsen, has been very visible in pushing for new corporate tax cuts and loopholes, saying, "our tax rules are outmoded at best and punitive of U.S. economic interests at worst."4 But the Bush Administration is so far invisible in taking a strong stand for U.S.-based manufacturers and keeping Mr. Bush's pledge to stop special treatment. Because of the generous definition of manufacturing in the Thomas legislation, firms like Fluor and Halliburton, both of whom have won contracts for reconstruction in Iraq worth billions, will also benefit from the changes. Vice President Dick Cheney, who served as CEO of Halliburton from 1995 until six months before he took office, continues to receive a six-figure deferred annual salary.5 Cheney has downplayed his tenure at the firm, with no mention of his service at Halliburton, though his bio does mention his "distinguished career as a businessman."6 Sources:
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