It's pretty common knowledge that CNBC is a very pro-business cable TV show, excluding the fact that they also air the show "American Greed". In some ways it's odd, as their sister station (MSNBC) has people like Ed Schultz ranting against the big corporations. And that too is rather ironic, as both stations are owned by GE.
But either or, the media always tends to put their own slant on many issues - just as Fox News and CNN also does --- and especially when it comes to the topic of corporate taxation, because after all, they're all part of a large major US corporation. When MSNBC reported on GE's tax bill (which was ZERO), MSNBC had made the "full disclosure" that GE was their parent company.
Recently U.S. Senator Rob Portman (R-Ohio) went on CNBC's "The Squawk" with host Joe Kernen to discuss the need for an overhaul of the antiquated and complex tax code (the video is at YouTube and embedded in the page below).
Apple CEO Tim Cook had earlier testified before the Senate Subcommittee on Investigations regarding their complicated offshore tax structures and corporate taxes. On CNBC, Porter couldn't seem to do enough to spin his case on behalf of Apple and every other major US corporation.
Portman began by saying that the recent committee hearing was supposed to be about the tax loopholes and that it turned into a scandal about our tax code. And then he says our tax code is non-competitive and that "Apple is trying to do the best they can with a tax code that disadvantages them." (Notice in the video that during the interview, the Dow Jones ticker on the TV screen is recording record highs).
Portman went on to complain that these massive corporate conglomerates couldn't repatriate their overseas earnings and "invest where they wanted". These companies currently have over $2 trillion stashed in offshore banks right now because they don't want to pay US corporate taxes on their foreign earnings. (Later in the interview, Porter puts this number lower).
Then Portman complained that all these corporations are having a hard time dealing with a "huge tax compliance cost, which is a lot of lawyers and red tape" just to comply with the tax laws (but he doesn't also mention that these tax laws are also the very same laws that these corporations had lobbied Congress for in the first place).
Portman also says that these "US companies need an environment in which to succeed", ignoring the fact that all during the Great Recession they've been raking in record profits. (Do you see the DOW JONES ticker in the video?)
The CNBC host, Joe Kernen, says that Apple "isn't an evil company, you know the ones I'm talking about", referring to ExxonMobil and GE as the evil ones. "The liberals love this company [Apple] because they innovate...and make iPhones and iPads." Kernen also said that corporations were trying to hire people here [in the US] "so that they can pay taxes, but they [the corporations] can't, because of the tax code." I supposed Kernen never heard of the H-1B visa program or the offshoring of domestic jobs, because he neglected to wade into that swamp. (And he probably never read any of my posts about unemployment in America either.)
Senator Portman says he thinks that Apple pays more taxes than anyone else in America. But according to an analysis by Citizens for Tax Justice, Apple has paid almost no income taxes to any country on its $102 billion in offshore holdings. Between 2009 and 2012, Apple avoided paying US taxes on some $74 billion in income, an amount equal to the entire budget of Florida. But I think most Americans are already well aware of corporate tax "avoidance" in this country by now --- as well as the rigged tax code favoring the most wealthy.
Portman made an astonishing statement, saying Apple could hire more people and pay more in taxes if only we had a more competitive tax code. He said 60% of Apple's business is overseas, so Apple's workers in the US are supporting their global sales.
Joe Kernen said that Apple's un-repatriated taxes overseas will go to "supporting entitlements in other countries that they over-promised their people". He said it would be just so much more "efficient" if we brought apple's taxes back here. And Senator Portman says that instead of a "tax holiday" for repatriating overseas earnings, it should be a permanent tax cut for major US corporations (even though, as a percentage of GDP, they are already historically low.)
Then they both went on to complain about how many lawyers Apple had to hire (all over the world) and all the paperwork that Apple has when they file their tax returns. Portman said that Apple's tax return was "a stack of paper 2 feet high" --- which is a little less than Mitt Romney's tax return (which was 500 pages). Portman said Apple could "hire more innovators to stay on the cutting-edge, instead of hiring more tax lawyers." I suppose he's never heard of H-1B visas or offshoring either.
CNBC host Joe Kernen suggested that the corporate tax rate might need to be 20% or 25% to bring back the money from the offshore banks, but that they (the corporations) "would go where they could get 15 [percent]". But why not go to where you can get zero percent Joe? Senator Portman thinks that a 25% corporate tax rate (as in China) is the magic number for repatriating a corporation's overseas earnings --- but does he mean WITHOUT ANY TAX LOOPHOLES AT ALL? In other words, an "effective" tax rate of 25%? Portman said these companies "would rather borrow money to pay dividends" than pay the current 35% tax rate. (People such as Christy Walton of Walmart earns over $1 million a day in dividend income.)
But then Portman goes on to complain about the debt ceiling and our "unsustainable entitlement programs"...as though cutting taxes for large corporations was supposed to somehow fix this problem.
The GOP Math: "We need $3 to run the government, but we can only collect $2 in tax revenues from the IRS, so let's lower the tax to $1 and eliminate the IRS." Republicans like Senator Porter believes this tax policy will help fix economy, because it will mean having less to spend on government services --- such as Starve the Beast. It still amazes me that so many Republican voters keep voting against their own best interests and vote for people like Rob Portman.
And then comes a real bombshell: Joe Kernen said the reason corporations pay a lower "effective" corporate tax rate is because US corporations don't even attempt to bring back their overseas earnings. (Unleash the tax attorneys!) He say's "Of course their blended rates (combined US and foreign taxes) are much lower because 60% of their profits are from overseas. Kernen's economic theory and mathematical formulations has him believing that a corporate tax rate of 25% (rather than 35%) would be "revenue neutral" -- and that it could bring in even more money into the U.S. Treasury's coffers.
Then at one point, they both agreed on the usual ultimate lie: That the US corporations "effective" tax rate is still "above the average" (although, they usually falsely claim that it's the highest in the world.)
Then towards the very end of the interview, Joe Kernen just couldn't help but mention the IRS "scandal" --- because to people like CNBC host Joe Kernen and Republican Senator Rob Portman, collecting taxes from corporations like Apple (and CEOs like Tim Cook) to pay for public education, the building of bridges, and supporting Social Security --- is a bad thing, and that government and the IRS is the real evil in America.
That's why the IRS is too under-funded by Congress to investigate tax evaders, shell corporations and offshore bank accounts.