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Progressive Politics in Minnesota, the Nation, and the World

About Poor Medtronic And That 35% Tax Rate

Category: Erik Paulsen
Posted: 06/19/14 01:42, Edited: 06/19/14 23:12

by Dave Mindeman

Rep. Erik Paulsen has come out in defense of Medtronic's new Irish address as a simple response to a very "unfair" US tax code. A tax code that "forces" Medtronic to find offshore accounts to hide their profits and extort the country that has given them the economic system and environment to make all those profits.

All this uproar is over a corporate tax rate of 35% - which Paulsen is quick to point out is one of the highest in the world.

Except no corporate entity EVER pays 35%.

These convoluted statements from Paulsen and his cohorts about what the US gets in taxes from corporations is never the actual truth. Lobbyists for all these "maligned" corporations have set up so many deductions, and loopholes, and special privileges into the tax code that corporations pay much less than individual taxpayers.

The "effective" tax rate (or the amount actually paid) for Medtronic is 18% of profits. That's half the rate that Paulsen claims Medtronic is trying to escape from. Of course that is still more than the Irish corporate rate of 12.5% but Medtronic won't get an "effective" rate in Ireland - they will pay in full.

USA Today reported an analysis in February of 2014 of corporate tax....

A surprising number of companies in the Standard & Poor's 500, 57, have found ways to pay effective tax rates of zero, according to a USA TODAY analysis of data from S&P Capital IQ.

Verizon paid ZERO. Metlife paid ZERO. Seagate paid ZERO. And News Corp (owner of Fox) paid ZERO.

And when we get into these tax discussions on the poor overtaxed corporation, we get these faux calls for overhauling the tax code. The fact is these corporations have paid good lobbyist money to get all of these tax loopholes in place. They don't want a simpler tax code - they want it to be as complicated and unreadable as possible.

Because that's the way they wrote it.

Republicans can talk a lot of about the "unfair" tax code, but the only ones it is unfair to is John Q. Public who makes up the difference when Exxon pays ZERO on their profits. And I guarantee you that the Republican talk is just that - TALK! Because they won't change anything about the US tax code unless the corporate lawyers give them the changes in writing.
comments (9) permalink

Tax Evader Medtronic Has Billions Offshore

Category: Erik Paulsen
Posted: 06/06/14 14:00

by Dave Mindeman

One of Erik Paulsen's big benefactors (Medtronic) has been one of the more vocal critics of Obamacare's excise tax on their medical device products.

You know the story. It is putting jobs in jeopardy, cuts back on research and development....yada, yada, yada.

Well, here is something else of interest.....

The Fridley-based medical device maker holds $20.5 billion overseas, just one notch below Wal-Mart Stores Inc. with $21.4 billion, according to a report released Thursday.....The authors (of the study) say they can't determine exactly how much of the money companies keep offshore is in tax-haven countries vs. other overseas locations where the companies have operations. However, there's evidence that a significant portion comes from the widespread use of accounting techniques to book profits outside the United States to avoid paying the 35 percent U.S. corporate income tax on it.

I have a very simple term for that....tax evasion.

Medtronic and corporations like them seem to believe that they shouldn't have to pay that much in taxes. It would be nice to have that option as a taxpayer, but the rest of us certainly don't.

Corporations like Medtronic think of themselves as "victims" of government abuse....and doggone it, they are NOT going to pay those taxes until they get a rate they want.

Meanwhile, billions of dollars (and I am shocked to use billions in this sentence) is left offshore...unused. And then Medtronic has the audacity to tell us that the Obamacare excise tax is hurting their research and development. Huh. Meanwhile 65% of $20 billion is available to them at any time. All they have to do is pay taxes. Imagine that - pay taxes.

I am tired of corporations and their Republican enablers trying to convince us about how abused they are on taxes. Meanwhile, the rest of us are stuck with making up the difference for what Medtronic is NOT paying on $20 billion in profits.

Maybe Erik Paulsen can explain it to us.
comments (1) permalink

Rep. Erik Paulsen Must Be Really Bad At His Job

Category: Erik Paulsen
Posted: 05/27/14 17:44, Edited: 05/27/14 17:45

by Dave Mindeman

You know, Congressman Erik Paulsen must be pretty bad at his job.

I have written many times about how I support keeping the Medical Device Tax and why I think it is a necessary funding mechanism in the ACA.

But Erik Paulsen is on the exact opposite side. He is the point guy - leading a charge to repeal the "onerous" (as he puts it) tax.

And what does Rep. Paulsen have on his side?

He has the powerful medical device lobby - and they have been very generous with him. He has near unanimous support of the Minnesota Congressional delegation - including both Democratic Senators. He has majority support in the US House and he is part of the majority party. And, in the Senate, he has Sen. Amy Klobuchar working for him.

Yet, the medical device tax survives.

I can't think of another situation where a Congressman has such an opportunity to get something done. Oh sure, President Obama has a veto threat lurking out there, but, so far, Paulsen's bill has never gotten even close to getting to that Oval Office desk.

Is Rep. Paulsen simply that ineffective? I don't know.

But the country and US health care is better off for Paulsen's "failure".
comments (0) permalink
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