Sunday, September 25, 2011

#hackgate: #Murdoch tax dodging and money laundering are federal crimes BUT not for the likes of Murdoch !

f you had only paid a 6% tax rate over a 4-year period, accumulated $7 billion in offshore profits not subject to US taxes, had over 150 accounts in tax-haven countries like the Cayman Islands and Bermuda, and used the money from your tax dodging to buy another company, you'd be wanted for tax evasion and money laundering. But for Rupert Murdoch's News Corp, that's business as usual.

The Australian media mogul, currently under scrutiny for News of the World's alleged phone tapping of terror victims for tabloid fodder, has largely expanded his empire with the help of a rigged tax code, written by lobbyists on the payroll of corporate tax dodgers like News Corp. In the last five years, most of the $27 million spent on lobbying by News Corp was for tax legislation.

The thousands of loopholes in our lobbyist-written tax code allowed Murdoch's company to cut their corporate tax rate to 6%, meaning News Corp paid just $324 million in taxes on $5.4 billion in worldwide profits in the years leading up to his $5 billion Dow Jones buyout. The Bancroft family would still be in control of the Wall Street Journal if it weren't for Murdoch's expertise in tax dodging.

Comparatively, corporate tax rates in the countries where News Corp operates - Australia, America and the UK - are 36%, 35%, and 30% respectively. In 2010, Murdoch's media empire exploited the tax loopholes lobbied for to pay just an 8.5% tax rate in the US on $2.9 billion in profits.

If News Corp paid the standard 35% US corporate tax rate like Costco, CVS Caremark and USAA Bank already do, the US Treasury would gain an extra $1 billion in revenue. That $1 billion could have refurbished Amtrak, or provided NPR with federal grants for approximately 50 years. The GOP's proposed $737 million in cuts to legal services for the poor and Planned Parenthood could be reversed if News Corp paid its taxes in full. News Corp's unpaid taxes could even correct the revenue shortfall for the entire state of Kentucky.

Though tax dodging and money laundering are federal crimes for individuals, corporations are free to engage in such activities because they wrote the tax laws. While we decry corporate tax dodging and budget cuts, none of these painful cuts would have to happen if Congress simply outlawed offshore tax-haven abuse.,,,read more