Political MoJo

The revelation that Apple used a web of baroque tax strategies to legally pay little to no taxes on tens of billions of dollars it earned overseas has re-ignited the debate over reforming the US tax code. But the non-partisan Center on Budget and Policy Priorities (CBPP) warned this week against proposals pushed by Apple and other large multinational corporations that would reduce taxes on offshore profits in order to encourage companies to bring that money back home.

Offshore profits are currently taxed at the same rate as onshore profits: 35 percent. Big US corporations have lobbied aggressively for the United States to shift to what is called a territorial tax system, in which foreign profits would be subject to low or no US taxes. The idea was a cornerstone of former Republican presidential candidate Mitt Romney’s economic platform last year. Now, Apple CEO Tim Cook is calling for a single-digit tax rate on overseas profits, as well as a reduction of the overall US corporate tax rate to the mid-20s.

Chuck Marr, the director of federal tax policy at the CBPP, explains that such a system would only make overseas profit-making more attractive—and that would weaken the US economy:

Multinational companies like Apple currently have a strong incentive to defer US corporate taxes by shifting and keeping profits overseas… [A] territorial system would create greater incentives for those companies to invest and book profits overseas rather than at home—and that, in turn, risks reducing wages at home by encouraging investment to flow overseas, increasing budget deficits by draining revenues from the corporate income tax, or raising taxes on smaller companies and domestic businesses to offset the revenue loss.

Democrats and trade unions agree, arguing that the United States should move in the other direction and tax foreign profits in the years they are made. They contend this would stem the corporate practice of deferring tax payments until the cash is brought back to the United States.

"We are dismantling vital government services because we don’t have revenue to support them," Damon Silvers, the policy director of the AFL-CIO told the Financial Times earlier this week. "And we have one of the most profitable corporations in the world [Apple] stashing $100 billion in [low-tax] jurisdictions."

Other high-tech companies are increasingly shifting profit-making overseas. The revelations about Apple's shenanigans—which apparently are legal—have drawn attention to similar behavior by many high-tech firms, including Google, HP, and Microsoft. "These [tax] incentives are creating unfair advantages for multinationals and draining much-needed tax revenue," says Marr. "The president and Congress should resist the lobbying campaign and instead focus on reducing the incentive to shift profits and operations overseas."

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If Rep. Ed Markey wins the special election to become Massachusetts' junior US senator next month, it'll have at least one unintended consequence: A potentially ugly fight between two progressive Democrats for Markey's seat as the top Democrat on the House Natural Resources Committee. After Oregon Rep. Peter DeFazio launched his candidacy by getting 20 prominent congressmen—including Georgia Rep. John Lewis and two former chairs of the committee—to sign onto a letter on his behalf, Rep. Raul Grijalva (D-Ariz.) is pushing back, winning the endorsement, on Thursday, of the Congressional Hispanic Caucus.

The battle-lines are familiar, if not not entirely related to the actual responsibilities of the Natural Resources Committee: immigration reform and the Keystone XL pipeline. "DeFazio actually has a very anti-Democratic record on immigration," argues Grijalva spokesman Adam Sarvana. As proof, his office is sending around a fact-sheet highlighting a vote DeFazio cast in 2012 that would have authorized the Keystone XL pipeline as part of a larger transportation package—in contrast to DeFazio's otherwise outspoken criticism of the project. Sarvana is also touting support DeFazio received from the anti-reform outfit Numbers USA. (The group does not endorse candidates but has praised DeFazio's backing of universal electronic citizenship checks as a condition of employment.)

In a statement provided to Mother Jones, DeFazio, who is still considered the front-runner for the job, dismissed the Keystone vote as a procedural oddity: "I just helped lead the fight in two committees and on the floor against the Keystone Pipeline. In 2012, I voted for a transportation bill designed to bypass Tea Party obstructionist and get a much needed transportation bill to conference. As a conferee, I had assurances from Senator Barbara Boxer the Keystone provision would be stripped out of the final bill."

Markey's job isn't open just yet—the special election isn't until June and recent polls have shown a tight race. But the Democrat has never trailed, and his possible successors aren't waiting around for clarity.

Here's the CHC letter backing Grijalva:

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Boy Scouts and their families deliver signatures protesting the ban. GLAAD

Today, on a muggy afternoon in Grapevine, Texas, members of the Boy Scouts of America's National Council voted 61-38 percent to stop discriminating against kids in the program on the basis of sexual orientation, overturning a national ban on gay Scouts that the organization has enforced for decades. The BSA will continue barring gay adults from serving as scoutmasters and volunteers, meaning that teenagers who come out during their time with the program could be booted after they turn 18. The decision is seen as a compromise between church groups that partner with the Scouts and those eager to see the program fully end its discrimination against gays.

"No youth may be denied membership in the Boy Scouts of America on the basis of sexual orientation or preference alone," states the new resolution, acknowledging that "[y]outh are still developing, learning about themselves and who they are, developing their sense of right and wrong, and understanding their duty to God to live a moral life."

"It's an incomplete step, but still a step in the right direction," Zach Wahls, an Eagle Scout raised by two lesbian mothers, and founder of Scouts for Equality, tells Mother Jones. His organization, along with Scouts, parents, and volunteers who support overturning the ban, have been rallying in Texas for days, across from the Gaylord Texan Resort & Convention Center, where more than 1,400 BSA voting members from across the United States cast their votes this afternoon. Scouts in uniform faced off against about two dozen protesters supporting than ban—and "a couple local guys driving by in trucks, saying anti-gay stuff," Wahls says.

Controversy over the ban picked up last fall, when major backers like the Intel Foundation and UPS stopped funding the program because of its discriminatory policy. In January, the BSA said it would vote on the issue. The following month, President Obama said he supported overturning the ban, and celebrities like Carly Rae Jespen and Dr. Phil followed suit. There have been over 1.8 million signatures submitted through Change.org in favor of overturning the ban, according to Rich Ferraro, vice president of communications at GLAAD, a gay right group, in contrast to 19,000 signatures in favor of it, delivered by the Alliance Defending Freedom, a Christian organization.

The Boy Scouts, which was founded in 1910 with an oath promising that Scouts would be "morally straight," have a long history of discriminating against gay members. In 1980, an Eagle Scout and aspiring Scout leader was kicked out for attending his prom with a male date. In June 2000, the US Supreme Court affirmed in a 5-4 decision that the Boy Scouts could continue barring gay Scout leaders. And as recently as April, 2012, an Ohio mom and den leader named Jennifer Tyrrell was forced out of the organization for being gay.

The new policy, which kicks in January 1, makes it so that member troops can no longer discriminate against gay youth. But anyone who is gay and over 18 years old still won't be allowed to be a Scout leader or volunteer. (The Boy Scouts' coed Venturing program, aimed at young adults, will allow gay members until they are 21.) This means that gay Scouts like 16-year-old Pascal Tessier can continue to participate in the program without fear of being kicked out, and will have the opportunity to earn the prestigious rank of Eagle Scout like his older brother has. But under the new policy, he would still be banned from the program when he turns 18.

When Mother Jones asked BSA whether or not it would eventually consider voting on the ban on gay adult members, a spokesperson said: "This is not about a step or progression…It is the option that did not, in some way, prevent kids who sincerely want to be a part of Scouting from experiencing this life-changing program and to remain true to the long-standing virtues of Scouting."

Tyrrell, the mom ousted for being gay and still unwelcome under the new policy, said in a press release, "I'm so proud of how far we've come, but until there's a place for everyone in Scouting, my work will continue."

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In recent years, conservative and liberal reaction to President Barack Obama's national security policies has often converged. Conservatives note that Obama has continued (or expanded) many of the Bush-Cheney policies and methods—drones, indefinite detention, military commissions, use of the state secrets privilege—and this, they proclaim, proves that the Bush-Cheney regime was not excessive or unlawful. Liberals, pointing to Obama's decisions in these areas, complain that the fellow who once campaigned against the excesses of the Bush-Cheney years has gone over to the dark side. A Justice Department white paper leaked in February explaining the administration's justification for targeted killing abroad of US citizens suspected of terrorism embodied the sort of executive power overreach associated with Obama's predecessor. And the Obama administration's fierce pursuit of national security leaks—which led the Justice Department to collect secretly information on the communications of the Associated Press and James Rosen of Fox News—reinforces the view that Obama has taken a step or two toward an imperial presidency.

White House aides rankle at any comparison to Bush and Cheney. They dutifully note that in his first days in office, Obama ended the use of torture (a.k.a. enhanced interrogation techniques) and declared his intention to shut down Guantanamo. (Gitmo remains open, but that's mainly because congressional Republicans and Democrats thwarted the White House effort to develop a high-security facility in the United States to house the detainees.) And the Obama-ites contend they have reformed some of the Bush-Cheney policies, such as the use of military commissions, to justify maintaining these practices. Also, they are not reluctant to add that Obama did end the war in Iraq and is downsizing the war in Afghanistan (at a faster pace than then-Secretary of State Hillary Clinton and then-CIA chief David Petraeus urged in 2011). But much of this defense has tended to get lost as the administration has fired off drone strikes without acknowledging the individual attacks and has, following in the path of previous administrations, resisted certain congressional oversight efforts.

[Read more]

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