GOP Congressman Offers Praise For US-UnCut Effort: CitiGroup’s Corporate Tax Dodging ‘Broke The Law’
"GOP Congressman Offers Praise For US-UnCut Effort: CitiGroup’s Corporate Tax Dodging ‘Broke The Law’"
Over the weekend, Americans all over the country staged demonstrations demanding that corporations pay their fair share in taxes. As ThinkProgress’ Zaid Jilani reported, many of America’s largest and most profitable corporations, like ExxonMobil, CitiGroup Bank of America, have managed to avoid paying any corporate taxes for most quarters in recent years. As corporations pay out record bonuses and compile billions in untaxed profits, corrupt politicians are trying to force regular Americans to give up benefits and social programs to pay down the deficit.
At the summit, ThinkProgress approached two conservative Republicans, Rep. Trent Franks (R-AZ) and Rep. Jeff Flake (R-AZ), to talk about corporate tax dodgers as well as the burgeoning “Main Street Movement“/US-UnCut efforts (US-UnCut is modeled after the UK group demanding British tax dodging corporations pay their fair share). Asked how he feels about large corporations skipping tax payments, Franks was at first incredulous, telling us that they do pay taxes but simply “pass it along” to consumers. Reminded that firms like Bank of America and CitiGroup have earned profits and avoided paying taxes, Franks finally responded sternly: “Well, then they broke the law”:
FANG: A lot of liberals are hosting what CBS News has called you know a left-wing alternative to the Tea Party this weekend, demonstrations all over the country. And one of their key complaints is that corporations aren’t paying their fair share. And they give examples like, in 2009, ExxonMobil, Bank of America, CitiGroup, GE, none of these corporations paid a dime in corporate income taxes. Do you think it’s fair for these corporations not to pay income taxes? […] But they’re using offshore bank accounts as loopholes–
FRANKS: Those things can be addressed. But the bottom line is, corporate income taxes, they’re taxes on the people, ultimately.
FANG: But they’re not paying any of these taxes.
FRANKS: But what I’m saying is to raise corporate taxes or increase corporate taxes, won’t hurt the corporations, they’ll just pass it along. […]
FANG: CitiGroup had one of its most profitable years ever in the last two years and they didn’t–
FRANKS: And you’re saying they didn’t pay any taxes on the profit?
FANG: Yes, in 2009. We don’t know about 2010.
FRANKS: Well, then they broke the law.
Similarly, we asked Rep. Jeff Flake (R-AZ) if very profitable corporations like Bank of America, which paid nothing in corporate income taxes in 2009, were “paying their fair share.” Flake responded, “people’s definitions of fair share is different.” Flake laughed in disbelief, and finally responded, “I’d have to look at your figures.” (see video above)
Many corporation have seized upon various loopholes to avoid paying taxes. Google, for instance, uses a variety of foreign subsidiaries as pass through corporations. In the case of CitiGroup, the IRS offered the company an exception to long-standing tax rules in 2009 because CitiGroup was still owned by taxpayer because of TARP. Even after CitiGroup sold its taxpayer-owned shares, it continued dodging corporate taxes. A GAO study found that CitiGroup maintains 427 subsidiaries in tax havens like Aruba and the Bahamas.