Budget

The Road to Serfdom Logic in the Obama Budget's Plan to Go After Corporate Foreign Earnings

It'll eliminate tax loopholes that offer relief from America's oppressive rates

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The corporate tax "reform" proposed in President Obama's budget would make F.A. Hayek flip in his grave. The

Hayek
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budget makes a fetish out of going after the trillion dollars in foreign earnings. American companies don't bring this money home because they'd be slapped with a corporate tax rate that's the highest in the free world. Moreover, America is among a few OECD countries that taxes the foreign earnings of domestic companies.

But instead of simply cutting these rates, the administration has come up with a draconian scheme to make companies pay their "fair share" that is a perfect illustration of Hayek's road to serfdom logic. Under this scheme, the president would eliminate the "deferral loophole" that allows companies to stash cash abroad.

Instead, it'll impose a 14 percent surcharge on their existing foreign holdings, an illicit form of retroactive taxation that is meant to fund its noble public works projects and middle-class entitlements. Obama is also proposing a 19 percent tax on future foreign holdings of these companies. "The administration hopes that if companies have to pay a tax on foreign income regardless of where they park it, they will bring it back home," I note. "That wishful thinking will backfire."

Go here to find out why and what the administration will do when it does.

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  1. Under this scheme, the president would eliminate the “deferral loophole” that allows companies to stash cash abroad.

    It’s always a “loophole” with these people when money isn’t being robbed from people and given to someone else.

    With this in mind, I am going to demand we close that unfair loophole that allows all the money Paul Krugman and Robert Reich make go into their bank accounts instead of into mine. They’re clearly better off and more privileged than me, so it would be justice.

  2. I’m still waiting for the progs to provide some halfway coherent definition of that favorite term of theirs, “fair share”.

    1. Fair share: Any amount of wealth or income (all inclusive) above the current national average.

    2. 90% like in the 50’s but excepting the fact that no one paid that rate and there was no Medicaid and Medicare.

      1. The 90% rates were so successful, the Feds had to institute the AMT in the 60’s to go after a measly 155 people. Now people who make $80k combined get caught up in it since they conveniently “forgot” to index to inflation. Remind me again how I am voting against my own interests and protecting the evil 1% for being against the redistribution scheme of the month.

        1. Its pretty obvious – you aren’t in your mid-twenties, laden down with $50k of debt on an education that isn’t paying off, working a minimum wage job (because what the hell else is that sociology degree going to do for you), and watching all those dreams and plans for the future pass you by because of your naivety.

          None of that is *your* fault, its the fault of all those meanies who horde all that money instead of giving you a job commensurate with your worth as a human being!

          So, even though it was listening to the government that got you in this mess in the first place, you want the government to get you out of it.

          But for some reason the government’s response is always ‘Hey, you fucked up – you trusted us.’

    3. The rich haven’t paid their fair share by virtue of the fact that they’re rich. They will have paid their fair share when they aren’t rich anymore. Entertainers, politicians, and cronies are excepted of course. Only people who got rich by offering goods and services to willing buyers are the ones who got rich unfairly.

  3. Obama is like herpes. The gift that just keeps on giving.

    1. Except unlike herpes, we will be cured of Obama in just 23 more months.

      1. You think all of is policies will retire with him?

          1. No, no. I like optimism. Keep it up.

            1. … sucker!

      2. No, like herpes, that burning sensation will live on long after he’s gone from our lives.

      3. Just like we’re cured of Wilson’s policies, and FDR’s, and LBJ’s, and Bush II’s, and just about every other fuckin’ president.

      4. Best case scenario, in 23 months the cold sores will go away. But, just like herpes – they’re always ready for an outbreak.

  4. Everyone knows the ideal tax is one on foreigners living abroad.

    1. Time for your Pax Americana Tax. Pay up or we send in the drones.

    2. +1 Tribute

      1. “And Caesar Lumenartifex decreed that all the world should be taxed…”

  5. Can Obama please explain why he wants to favor foreign companies over US ones? Why should Siemens get a better tax deal than GE? Why Toyota should get it better than Ford? Why Novartis should get better than Merck? Lenovo over Dell?

    1. Everyone together now: BFYTW.

      1. I’m not sure why the R’s don’t take up the “Obama favors foreign corporations” angle though. It has the benefit of being absolutely true.

        1. because R’s are not known as the stupid party for nothing. Like the Dem version of never letting a crisis go to waste, the GOP version is never miss a chance to waste an opportunity.

        2. For the same reason the Republicans supported exit taxes for expatriots;
          1) Patriotism: they can’t stand people leaving and turning their back on ‘murca

          2) Greed: politicians want money – and will tac anything that will give them money (if they can get away with it).

          Some version of this idea will be implemented in a bipartisan (ie stupid and evil) way. And when it fails, they will embrace PIGS style exit controls on capital for corporations.

  6. Who cares about Obama’s tax proposals? They’re not going to pass, they’re not even going to make it to a floor vote. Nobody – including lefties – who wants something that can actually pass would dream this pile of horseshit up; the clown is cranking out budgets like he’s some congressman in a solid-blue district.

    Which is kind of what Obama is, politically. This guy’s presidency is unique in when it’s gone, it’s gone. No old hands of his will remain in Washington, no careers were made which give Obama a line to the establishment later on; all his confidantes have nowhere to go except his coattails – I mean, who is going to hire Valerie Jarrett et al for anything after 2016? Contrast that with the Clintons and their empire-building, or Bushie artifacts like Rove who are political powers in their own right.

    With no intrinsic powerbase or friends in Washington, or even the Democratic party, Obama only has his base, embodied in OFA, and he will take it with him when he leaves. This budget (and all the Carbontology) is proof it is that crowd he serves, and serves alone. A schism is coming to the Donkeys after 2016: Obamacrats vs. everyone else.

    1. That picture of the future sounds rosy indeed. But then I’m faced with the demons of visions of Obama on the phone with Liz Warren…and they’re talking, planning, sketching out a campaign. Would Warren be the Medvedev to Obama’s Putin? You bet your sweet ass she would.

      1. The Socialist Squaw is a Donkey/Jackass imitation of a Michelle Bachmann or Rick Santorum – a clown who can win rabid morons and make trouble for the establishment at the caucus level; but political dogshit on a national level, even among her own party.

        1. a clown who can win rabid morons and make trouble for the establishment at the caucus level; but political dogshit on a national level, even among her own party.

          (And damn me for bringing this up, but…)

          You know who else they said that about concerning the success of their political ambitions?

          1. The Praetorian Guard when they elevated Claudius?

            1. The world could always use more Derek Jacobi.

        2. a clown who can win rabid morons and make trouble for the establishment at the caucus level; but political dogshit on a national level, even among her own party.

          But, how does that differ from “some congressman in a solid-blue district”?

      2. GAH!!!

        Damn you, HM , for that foul and terrible vision of the future! I shall have claw mine eyes out to avoid seeing it.

        1. Gotta drink for a reason.

    2. The main reason we should care is that these proposals are not meant to be real policies that stand a chance of being enacted, rather they are designed to set the framework for the political discussion in 2016 and beyond. By seizing a very populist initiative, President Obama has set the tone for debate, forcing Republicans to respond and face him on his turf. It’s another way to paint those who disagree with him, including Libertarians, as stooges of big business, against the little guy, etc. By so doing, he makes it more likely that initiatives will be proposed that are more of a compromise toward his goals.

      The problem here is that Republicans have put forward very few ideas that aren’t some version of “Democrats bad”. They want to repeal Obamacare, but have no idea what to do after that. They’d like to repeal Democratic spending initiatives, but have no plan whatsoever to balance the budget (with a few exceptions), let alone pay down debt. That’s made them constantly argue from the defensive, which isn’t a winning strategy.

      This has been a major reason why libertarian policies often are not taken seriously. “Freedom” sounds great (and is), but often there is little thought put toward what happens when that freedom has negative consequences (as in the current measles outbreak). Consequently, when those who aren’t convinced raise questions, the libertarian response can seem like “it’s freedom, what more could you want?” to an outside observer, which isn’t convincing.

      1. Astute post.

      2. there is little thought put toward what happens when that freedom has negative consequences (as in the current measles outbreak)

        except that very few people, and most of them are on the loony left, are stridently anti-vaccine. Freedom comes with responsibilities and your exercise of it ends when it infringes on mine.

        1. I think you are getting bogged down in the specifics and missing the larger picture.

          Freedom only looks simple at the 100,000 foot level. For example, we say a person has a right to defend their property. That sounds nice and clear cut. Then some wag says “like shooting trespassers?” “Yes”

          “What if it’s a kid trespassing?”

          “Yes”

          “He’s lost and he’s five years old.”

          “I wouldn’t shoot a five year old trespasser!”

          “But do you have a right to?”

          It can be a hard sell. And often we are saying that we don’t know what the right answer is – but that wrong answers are wrong.

          Of course the claim that Libertarians rarely think stuff through is generally bollocks – in my experience we are far more likely to overanalyze stuff than underanalyze them. And given that the Republican politicians are generally pandering to the mob, and libertarians are notorious for refusing to pander to popular ideas that violate our principles, I think the parallels Contrarian is pointing out is less meaningful than at first blush.

          1. again, rights come with responsibilities. It’s not that complicated. People have free will and a conscience. At some point, you have to treat adults like adults.

        2. Choosing not to take vaccines does not infringe upon your liberty. To think otherwise, is just nonsense.

    3. Obama is suggesting he will stay in DC after his term is over:

      http://www.usatoday.com/story/…..a/3781077/

      1. Good. He was talking about moving to CA, and was even house shopping in a neighborhood I was interested in.

  7. Hey you guys I have found the perfect job as a full time student, it has changed my life around! If you are self motivated and social media savvy then this is ideal for you. The sky is the limit, you get exactly how much work you put into to it.
    Click on this link to get started and see for yourself????.
    ?????????????????????? http://www.netpay20.com

    1. stripper? Work at night and snort cocaine.

  8. Hey you guys I have found the perfect job as a full time student, it has changed my life around! If you are self motivated and social media savvy then this is ideal for you. The sky is the limit, you get exactly how much work you put into to it.
    Click on this link to get started and see for yourself????.
    ?????????????????????? http://www.netpay20.com

  9. Fair share: an unspecified amount of taxes the rich and corporations should pay that is higher than the current rate; subject to change when rates rise.

  10. Sounds like all international companies that are based in the USA are drawing up plans to move their incorporation off-shore to avoid this tax if it happens.

    1. Progressives are incapable of seeing beyond:

      If a then b.

      They totally miss:

      If b then c & d & f & g & etc

      So there are never any unintended consequences of progressive action. Only evil conservative counter-actions.

      1. It would be interesting to play a prog in chess, because you’re right, they certainly do not think more than one move ahead. They’d probably be trivially easy to beat.

        1. Prog: I shall sacrifice my queen.

          Epi: Uh, checkmate!

          1. No, no, even better:

            Prog: I shall sacrifice my king.

            Me: Sure, if you want…checkmate!

            1. Prog: Check your privilege.

          2. You idiot!

            Checkmate only occurs after the dominos fall like a house of cards!

        2. As I’ve mentioned before, Progs only know how to play pigeon chess. No matter how good you are at the game, the pigeon is just going to knock over all the pieces, shit on the board, and finally strut around the table with a smug, self-satisfied look on its face. Look at the end result of any, any serious attempt at debate with the likes of Tony, Jackass Hole, american sociopath, et al. Pigeon chess: the only winning move is not to play.

          1. I…I laughed.

            *notes “pigeon chess”*

            1. Still a better option than Warty chess.

          2. the only winning move is not to play

            Instantly reminded me of:

            https://www.youtube.com/watch?v=MpmGXeAtWUw

      2. You give them too much credit.

        They only see “I intend a to result in b” and refuse to see “oh shit, a actually resulted in c.”

      3. Progressives are incapable of seeing beyond:

        If a then b.

        They totally miss:

        If b then c & d & f & g & etc

        You just summed up lefty thinking on global warming.

        +1

        1. On everything

        2. Thinking? They don’t think beyond rationalizing what they feel.

        3. Their global warming thinking is better summed up as post hoc ergo prompter hoc.

      4. Actually, most of the times, progressive logic states: If b after, then a before. Post hoc ergo prompter hoc gets pretty annoying pretty fast.

      5. Whereas libertarians are all like “a, then who gives a fuck.”

        1. Begause not hitting = not caring, right Tony?

          1. “You don’t wanna beat me or screw me? What kind of marriage is this?!? Bring a book.”

        2. Tony arrives. It’s like sitting around reading a good book when the dog farts.

          1. I disagree with Tony usually, but it seems a better analogy would be sitting around with your friends sniffing each other’s farts and the dog walks in and farts. I mean, I guess I’m a hopeless contrarian but a bunch people sitting around agreeing with one another seems the most boring way to spend a conversation.

            1. Well, it’s hard to beat the pigeon chess analogy.

          2. Yeah, but most people don’t spend the next hour trying to argue the dog out of farting quite so nosily.

            1. Heh, that is funny.

              But look at this thread: when no prog like Tony is around people literally make up prog voices and then people argue against them. But when an actual prog comes on to give the real thing everyone won’t have it. It’s hilarious.

              1. If there no Tony we’d have to invent him!

          3. You know what’s worse than dog farts? Cat farts. One of our cats is gassy, and holy shit it’s disgusting. It can clear a room. Never had a gassy cat before, and I hope I never do again. Ugh. Makes dog farts smell like roses.

            1. I’ve had cats since I was a kid and never had a farty one. I hope my streak continues.

              I did have one that would burp and play it off as a meow.

              1. This cat is a mutant anyway. He’s deaf, has no tail (which means he walks in a knock-knee fashion to stay balanced), and his head looks small in proportion to the rest of his body. And he’s gassy. SBD style. You don’t hear it, but whoah do you smell it. Disgusting. The worst part is he likes to sleep on the pillow above your head. Until he cuts one. Then he gets a flying lesson.

                1. Maybe Gassy Cat needs to be Outdoor Gassy Cat?

                  1. Not with a heavily trafficked road thirty feet from the front door. I like my kitties alive, not pancaked.

            2. I just adopted two and they both are sick. What they are producing – in all states of matter – is just revolting.

              1. They’re excreting *plasma*?

        3. Or maybe “a, then individuals can give as many fucks as they want.”

        4. Whereas libertarians are all like “a, then who gives a fuck.”

          In a way, yes. It would be more accurate to say that we accept the reality that we can’t minutely control the outcomes of human interaction. For example, the idea that a president–even with the help of Top Men–can possibly run an economy and arrange the results you desire is a utopian fantasy.

  11. When will they just drop the pretense, gather them up in a square, hang them, and distribute it all to the proletariat (err, commissars of the proletariat)?

    1. It’s only a matter of time. One thing sure about history is that it repeats itself, over and over and over…

      1. Ugh. The more time a spend reading history the more I am terrified of the future.

        1. Human nature has not changes a bit. It’s only a matter of time before the ugly side manifests itself again, only with modern toys. It will be bloody.

          1. I agree 100%.

            The Greeks were utterly horrible to everyone around them, including each other. And yet how often is classical Greece held up as a turning point in human history?

            20th Century Europe was probably the absolutely worse place to live in the entirety of human history. Despite this we are constantly bombarded with admonitions from progtards to be more ‘civilized’ like Europe.

            Idiots, one and all.

            1. 20th Century Europe was probably the absolutely worse place to live in the entirety of human history

              No… it wasn’t.

            2. I think that’s a bit much. In terms of technological advance, we have overcome a lot of external factors that create human misery. But as everyone is pointing out, our capacity (and desire) to hurt and inflict misery on other humans hasn’t changed that much. We’re a hundred thousand year old computers running on supposedly ‘enlightened’ modern day software; it really shouldn’t come as a surprise when we use our new toys to engage in barbaric activities.

  12. Fucking fools. That money would be a hell of an economic stimulus if it came back to the US.

    1. It’s not an economic stimulus unless the government is doling it out. Do you think corporations will spend their own money more efficiently and productively than when the government spends money that isn’t theirs? Come on! Corporations put profits before people! They’re not going to stimulate anything except their bank accounts! Government spends money wisely because it doesn’t belong to them! They put people before profits! Aaaauuuggghhhh!

      1. This is what they actually believe.

  13. The “loophole” [scare quotes] that allows people to posess money that isn’t earned at government jobs MUST be closed.

  14. Interestingly Dalmia gets much less grief when promoting the rights of capital to move freely than she does when promoting the same with labor.

    1. Generally, money doesn’t talk with a funny accent and celebrate weird holidays.

      1. Money also doesn’t demand money from people at the point of a gun.

        1. Neither do immigrants uniformly or over time. Asian immigrants recently went GOP and yesterday’s Irish went for Reagan.

          1. Going GOP isnt an endorsement.

    2. she gets much less grief when not attempting to say that open borders and the welfare state can co-exist.

      1. And legalized drugs and a welfare state can’t exist

        1. I’ll take nonsensical analogies for $800, Alex.

      2. Since I’ve already explained to you that immigrants are a net benefit to the US welfare state, you’re gonna have to come up with another excuse for being unlibertarian on this issue.

        1. nations have borders, Tony. It’s not a new concept. And, as usual, I can count you to do the retarded thing of conflating legal and illegal immigration. There is nothing libertarian about a welfare state and few libertarians argue with the original premise.

          1. Tony has never argued in good faith so it really isn’t all that surprising.

          2. Even illegal immigrants. They are younger than the general population on average and pay a lot of the same taxes. They are a net benefit. You don’t get to keep using this excuse. “Nations have borders” is question begging. Why is the free flow of people bad?

            1. Tony, the free flow of people is good – as is the free flow of capital.

              So, if you want to move to St. Petersburg, you should be able to do so without having to obtain permission from either the State Department or the Russian Federal Migration Service.

              And, if you make it big in the Venice of the North, you should not have to hand anything over to your boy Obama’s tax looters.

      3. open borders and the welfare state can co-exist.

        I’m bemused by the persistence of this weird idea that welfare states are at all sustainable.

        They only last a few centuries at most before they kill their host economy and collapse.

        The modern welfare state concept is only 1.3 centuries old – and is now in an unrecoverable state of crisis. Why should we give up a very basic freedom, the freedom to pick who we associate with, the freedom of picking where we live, the freedom of picking whom we do business with to preserve that witch is unsaveable.

        1. because there are far more politicians decided to saving the unsaveable than to worrying about your freedoms, basic or otherwise.

          1. Should we sacrifice freedom of speech to save the welfare state, wareagle?

            Should we sacrifice your right to life to save it?

            Should we put the state in charge of your reproduction to preserve it? After all does it really matter if the useless mouth was born to a citizen or swam across a river?

            The fact that so many people who claim to be for freedom reject open borders because they fear the welfare state will crater as a consequence of it is baffling. It’s like hearing libertarians argue for jacking up taxes to funnel money to Al Gore’s pockets: utter madness!

            1. wow, is that some tortured logic. When has free speech meant money taken from you at gunpoint, other than never? And where is that right to freely go into someone’s backyard to be found in teh Constitution?

              Borders are one of the characteristics of nations. Every country has them, most far more difficult to cross than ours. The welfare state’s existence makes open borders untenable. You cannot have both. And I’m not particularly in favor of open borders. It’s not a theme park, it’s a country.

              1. When has free speech meant money taken from you at gunpoint, other than never?

                Since people could vote for politicians to give them free shit?

                And where is that right to freely go into someone’s backyard to be found in teh Constitution?

                Whence did than non-sequitur come from? Are you drunk?

                Borders are one of the characteristics of nations. Every country has them, most far more difficult to cross than ours.

                Ah yes, the “mommy, everyone else is doing it” argument. God was I glad when my kids outgrew it.

                The welfare state’s existence makes open borders untenable.

                Why? Untenable to whom? By what mechanism?

                And I’m not particularly in favor of open borders. It’s not a theme park, it’s a country.

                OK. Unless you’re east of the Greenwich timezone, it’s waaaay to early to be this drunk.

        2. “They only last a few centuries at most before they kill their host economy and collapse.”

          A few centuries? What? The European welfare states are dying horribly right this instant, and most of them have been around between 30 and 50 years.

          It doesn’t take centuries for this to unravel. A few decades is more than enough.

          1. I was being generous. The Roman state took a couple of centuries to kill itself.

    3. On the other hand, when discussing capital, Dalmia doesn’t tend to overstate her position. I agree with a much more open immigration system. But, Dalmia sometimes just says shit that can’t be supported on the topic. She’s more cautious on capital. And that makes for better argument.

      1. Dalmia sometimes just says shit that can’t be supported on the topic.

        Yeah, I remember thoreau – back in the mid 2000’s – used to religiously point out examples of this in the comments of her articles. It was practically a sport with him.

        1. thoreau was a priss who could not stand to be beaten in debate.

  15. This isn’t “communism” in any meaningful political or structural sense.

    This is communism as practiced by two-year-olds. Any toy, shiny object, or similar attraction (unattended or not) is the subject of tearful woebegone cries of, “MINE MINE MINE!”

  16. “The more you tighten your grip, the more corporations that slip through your fingers”.

    Even the lefty European governments have created a corporate tax regime that does not give a tinker’s damn about their nation’s native corporations ability to compete in the global market. How can anyone operate so deliberately oblivious to the evident fact that businesses wiyh global reach don’t have to put up with this kind of mugging indefinitely?

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