Clinton says GOP candidates undermining anti-terrorism efforts

10 Dec 2015 | Author: | No comments yet »

Clinton To Target ‘Inversions’ With Exit Tax.

WATERLOO, Iowa (AP) — Hillary Clinton accused Republicans of undermining American efforts to fight Islamic terrorism, saying Wednesday that the “hateful” campaign rhetoric of frontrunner Donald Trump and the rest of the GOP field is providing new material for Islamic State propaganda. “Instead of showing leadership some of the leaders in this campaign are resorting to really hateful rhetoric,” Clinton said at a town hall meeting. “Donald Trump, he does traffic in prejudice and paranoia. Democratic presidential candidate Hillary Rodham Clinton speaks at the Council on Foreign Relations in New York, Thursday, Nov. 19, 2015. (AP Photo/Seth Wenig) Democratic presidential hopeful Hillary Clinton unveiled plans Wednesday to crack down on companies that seek to dodge U.S. taxes by denouncing their U.S. citizenship and moving their headquarters overseas.WASHINGTON—Democratic presidential front-runner Hillary Clinton promised Wednesday to use executive authority, if needed, to act against corporate maneuvers that shift profits out of the U.S., calling them a trick used to get out of paying a fair share of taxes.

It’s not only shameful, it’s dangerous.” Trump’s proposal to block Muslims from entering the U.S. has prompted widespread condemnation from lawmakers of both parties and from leaders across the globe. Specifically, Clinton’s proposal, announced during Town Hall meetings in Iowa, would target a practice known as “earnings stripping,” in which companies that have shifted their tax addresses overseas in a tactic known as an “inversion” take advantage of various loopholes to reduce their tax burdens. “The maneuvers powerful corporations are using to game the system and leave everyday taxpayers holding the bag are just offensive,” Clinton said in a statement. In the largest inversion to date, pharmaceutical giant Pfizer (PFE) announced last month it will merge with Irish drug maker Allergan, with Pfizer relocating its corporate headquarters from New York to Dublin. “All told, inversions by Pfizer and other companies, plus related loopholes, will cost American taxpayers more than $80 billion in revenue over the next 10 years. Yes, Clinton did, as Cillizza remembers, suffer through a scandal, and she emerged with bruised polling numbers, at least when it came to perceptions of her honesty.

Treasury to end the loophole. “If you become successful in America,” said Clinton, “if you’ve benefited from American tax dollars and flourished because of all the things that make America great, you should pay what you owe just like everybody else,” she said. Clinton is spending this week detailing how she will address tax-avoiding “inversion” deals in which a company buys or merges with a foreign rival and relocates on paper to lower its U.S. tax bill. If the award was “worst summer in Washington,” I could see Clinton as a contestant, although Scott Walker and Matt Williams would be stronger choices.

Clinton’s proposal is the latest in a series of proposals she’s unveiling targeting so-called inversions, the corporate tax practice of exporting profits that’s become a source of bipartisan scrutiny. Clinton and her campaign have made clear they are viewing the real-life implications of inversion deals through the lens of the $160 billion plan by U.S. pharmaceutical maker Pfizer Inc to purchase smaller rival Allergan Plc and move its headquarters to Ireland. Under President Barack Obama, the Treasury Department has been studying potential rules against earnings stripping for more than a year but hasn’t taken action.

One year ago, Clinton was the leading candidate for the Democratic nomination, perhaps in the best position any non-incumbent has been in modern times. Congress to stop such deals by requiring the acquiring foreign entities to control at least a 50 percent stake in the combined company instead of the 20 percent under current law.

In an effort to avoid paying the higher tax rate, U.S. companies have increasingly sought so-called inversions, or mergers that allow them to relocate their headquarters in countries with lower tax rates. Elizabeth Warren and Vice President Joe Biden, were lurking around the edges of the contest, not exactly active candidates but not far from doing what candidates at that stage do. On Monday, her campaign confirmed she will suggest an “exit tax” on the untaxed earnings of corporations that use inversion deals to relocate overseas.

Though her mention of Trump’s name drew boos from the largely elderly crowd, the audience did not raise the issue of terrorism or the conflict in the Middle East. Instead, questioners focused largely on domestic issues, like climate change, health care and childcare costs — a reflection of the economic concerns that remain central in the Democratic primary battle.

She will on Wednesday discuss how she believes that she would have the executive authority as president to address earnings stripping, and encourage the U.S. The November announcement of a plan to merge drug-makers Pfizer and Allergan to create the world’s biggest pharmaceutical company reignited a fierce political debate over whether such deals should be permitted. Clinton and other Democrats, as well as some Republicans, have been critical of the Pfizer deal, and the policy announced this week represents her effort to combat such arrangements.

It was the Treasury’s second stab at discouraging inversions in the past year-and-a-half, since the practice became a hot-button political issue in Washington. In the closest similar case, Al Gore in 2000 had to defeat Bill Bradley, who was far more broadly acceptable to the party then than Sanders is now, mainly because most Democrats believe Sanders would be a disastrous general-election candidate. The regulations did not take on earnings stripping directly, but the department reserved the right to make any future regulation retroactive to that date. Under current rules, U.S. companies can reincorporate abroad if they acquire a foreign company and transfer more than 20 percent of their shares to foreign owners. Clinton’s campaign estimates that closing the “earnings stripping loophole” would raise $60 billion over 10 years that could be used to provide incentives for manufacturing, research and small business.

And her performance in the marathon session in front of that select committee quieted the whispers that her age might be an impediment in her campaign. A 2007 Treasury Department study found strong evidence of earnings stripping by inverted companies and no clear evidence by a broader set of foreign companies. The economy hasn’t boomed, and Barack Obama’s approval ratings remain mediocre, leaving the general election more or less a toss-up at this still early point.

A spokesman for the Republican National Committee, Michael Short, replied to the proposal by saying it doesn’t really address the problem. “Hillary Clinton’s entire proposal is inverted because it does nothing to solve the underlying problem of our outdated and uncompetitive tax code,” he said. The profits a U.S. company earns overseas are not taxed until they are brought back into the U.S., prompting many companies to hold cash and invest abroad to avoid the taxes.

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