Geithner report signed by President details tax cut success: Rich Google ally evades taxes.
By Jeffrey Lord on 12.11.12 @ 6:11AM
Geithner report signed by President details tax cut success: Rich Google ally evades taxes.
In a word, it's a scam.
President Obama has admitted -- in detailed print with his signature -- that the Bush tax cuts worked.
Even though he spent an entire campaign saying of the tax cuts: "That's what took us from surplus to deficit."
A hat tip here to the Hoover Institution's Paul Sperry.
Did you know that the 2012 Economic Report of the President -- the official government document on the economy published by the Obama Administration and signed personally by Obama himself -- admits the Bush tax cuts caused government revenue to goup, not down?
That's right.
You can find it right here, buried in a long, eye-glazing page of statistics on page 413 at very end of a deeply unpublicized but legally required official White House report. The stats were compiled by Obama's own Secretary Timothy Geithner's Department of the Treasury. With Barack Obama literally signing his name in approval of the contents.
Which is to say, President Obama himself -- whose signature is on the report's cover letter -- knows full well that for all the "tax the millionaires and billionaires" rhetoric he dispenses, that rhetoric is factually, say again factually, simply untrue. As he himself documents.
Worse, one of his major supporters -- Google's Eric Schmidt -- is a flagrant example of how a U.S. corporate leader willfully and deliberately flouts U.S. tax law to escape paying the very "taxes for the rich" Obama used as the rocket fuel of his recent election victory.
First, what might be called the Obama Scam.
Yes, there he is in the front of the report -- pages three through five, with his handwritten signature big and bold -- using all the Obama class warfare rhetoric America has come to know and half of America to hate.
Like this:
We can either settle for a country where a shrinking number of people do very well while a growing number of Americans barely get by, or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules.
Some, however, still advocate going back to the same economic policies that stacked the deck against middle-class Americans for way too many years.
But in the back of the report?
In the back of the report -- right there in the literally small, fine cold black print -- are the Geithner approved numbers that make the hard data hidden all the way at the back of the report directly contradict all the Obama rhetoric at the front of the report.
Not only that, the numbers, required to be a factual recitation of America's economic history, reach back to the Kennedy years. Which means it includes the tax receipt numbers for the administrations of two tax cutting Democrats and two Republicans --JFK, Reagan, Clinton and Bush 43.
As seen in this chart, provided by Paul Sperry in Investor's Business Daily, with all the figures coming from Geithner's Treasury Department, in every single instance when taxes were cut --government receipts went up.
Which is to say, when taxes on the rich go up, the American government gets starved for cash.
How does this happen?
Let's put aside the proved common sense Reaganomics here… that lower taxes creates more jobs and more economic growth. Time after time after time, as thoroughly documented by Obama's Treasury Department, rising income dwarfed the decline in tax rates…and why wouldn't it, with more people having jobs?
Instead let's look at how "the rich" avoid taxes precisely because they are terrified of the policies of somebody like Barack Obama. And let's use an interesting example of the game at work --interesting because it involves a famous company headed by a man who is an equally famous Obama supporter.
One of the names mentioned for a possible Cabinet job in the second Obama term is Google's Chairman and former CEO Eric Schmidt. That's right, Google. The Internet search engine company.
Mr. Schmidt was a major Obama contributor and supporter of the Democrats in 2012 as he was in 2008. Google's political action committee gave $2.1 million to Democrats and over $700,000 to Obama in 2012.
So, a Google exec for Team Obama?
Not so fast.
Obama supporter Schmidt and Google are prime examples of how "the rich" go out of their way to escape paying high taxes. A regularity in America because people like Barack Obama are always just a handful of votes away from controlling U.S. tax policy.
Google, in fact, is terrified of Barack Obama and what he intends to do to "the rich." And since Mr. Schmidt is both ex-CEO and current Google Chairman, it is abundantly clear by his actions on behalf of Google and how he comes about his own personal wealth what he really thinks of the "tax the rich" business. The "rich" defined here as, well, Google. Headed up by that very rich champion of all things Obama, Mr. Schmidt.
Let's skip over to Bloomberg's Businessweek back in October of 2010 for their description of exactly what Mr. Schmidt is doing to make good on his candidate's "tax the rich" policies.
The headline on the story by reporter Jesse Drucker?
The Tax Haven That's Saving Google Billions
Writes Drucker:
The heart of Google's (GOOG) international operations is a silvery glass office building in central Dublin, a block from the city's Grand Canal. In 2009 the office, which houses roughly 2,000 Google employees, was credited with 88 percent of the search juggernaut's $12.5 billion in sales outside the U.S. Most of the profits, however, went to the tax haven of Bermuda.
To reduce its overseas tax bill, Google uses a complicated legal structure that has saved it $3.1 billion since 2007 and boosted last year's overall earnings by 26 percent….
In Bermuda there's no corporate income tax at all. Google's profits travel to the island's white sands via a convoluted route known to tax lawyers as the "Double Irish" and the "Dutch Sandwich." In Google's case, it generally works like this: When a company in Europe, the Middle East, or Africa purchases a search ad through Google, it sends the money to Google Ireland. The Irish government taxes corporate profits at 12.5 percent, but Google mostly escapes that tax because its earnings don't stay in the Dublin office, which reported a pretax profit of less than 1 percent of revenues in 2008.
Irish law makes it difficult for Google to send the money directly to Bermuda without incurring a large tax hit, so the payment makes a brief detour through the Netherlands, since Ireland doesn't tax certain payments to companies in other European Union states. Once the money is in the Netherlands, Google can take advantage of generous Dutch tax laws. Its subsidiary there, Google Netherlands Holdings, is just a shell (it has no employees) and passes on about 99.8 percent of what it collects to Bermuda. (The subsidiary managed in Bermuda is technically an Irish company, hence the "Double Irish" nickname.)"
Got it?
When Eric Schmidt hears Obama -- Schmidt's guy -- talk about "tax the rich" -- he just laughs, sends out for a "Double Irish" with a side of the "Dutch Sandwich." Then gives Obama millions from his Irish-Dutch-Bahamian laundry to pump out the laughable "tax the rich" rhetoric for the gullible -- millions Schmidt earned by laundering Google's profits through distinctly non-American taxpaying turf like Ireland, the Netherlands and Bermuda.
And the billionaire Eric Schmidt, who gets his billions from this game, laughs all the way to the bank.
Which is to say, Eric Schmidt and Google are the poster children for the Obama Scam.
Knowing full well that the Bush tax cuts… the Clinton tax cuts, the Reagan tax cuts and the JFK tax cuts… all worked -- and must be legally noticed in the Economic Report of the President -- the fact of this repeated success is buried at the back of the book in the small print.
While in the front of the book Obama goes inveighing against the rich.
In other words, this whole "tax the rich" business is nothing but a cynical game. An ideological scam. And if you don't believe this, look at how the left got itself worked up over at theHuffington Post back in the fall campaign when the issue was Mitt Romney's off-shore investments. Wrotea huffy HuffPo:
But by parking money in countries with tiny tax rates -- thus putting it beyond the reach of the American government -- wealthy businesses and individuals cost the federal government roughly $100 billion every year, according to a 2011 report from the California Public Interest Research Group. That's money that doesn't make it into the federal government's hands, even though it would probably come in useful -- again, given the trillion-dollar-plus national deficit.
Oh they eventually -- that would mean once -- managed to burp out the name "Google." But outrage? Calling out Obamateer Eric Schmidt as they called out Mitt Romney? Are you kidding? Which raises the interesting question: Where are all of lefty Arianna Huffington's millions parked?
Remember this moment from the 2008 campaign in a debate between Obama and Hillary Clinton? The subject was increasing the capital gains tax, and there was this exchange between Obama and moderator Charlie Gibson of ABC:
MR. GIBSON: And in each instance, when the (capital gains tax) rate dropped, revenues from the tax increased. The government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down. So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?
SENATOR OBAMA: Well, Charlie, what I've said is that I would look at raising the capital gains tax for purposes of fairness.
In other words, this President knows raising taxes will defund the U.S. government. As his Google crony Eric Schmidt has already demonstrated even when the "Bush tax cuts" were in full flower, running for cover in the Bahamas. As he effectively demonstrated with Charlie Gibson. The Obama Scam isn't about the money -- it's about the phony ideology that props up the scam.
When Republicans get through negotiating with themselves over the fiscal cliff, they may want to have a hearing or two to discuss the findings of the Obama Economic Report.
In which Barack Obama signs off on the historical fact that the Bush tax cuts -- and the economic growth tax cuts of Presidents Kennedy, Reagan and Clinton before that -- worked.
And when they're done with that?
Perhaps a chat with Google's Eric Schmidt would be in order.
