RUSH: I have a little bit of what President Obama’s talking about and, as usual, it’s hypocrisy on parade here. The president is talking about how most Americans work hard and play by the rules, and they need to know that big corporations are not gaming the tax system. He’s talking about corporate inversions, which is not hard to understand. The US has the highest corporate taxes in the world, 35%, and Obama’s out there talking about the unintended consequences of this being real. And he said, “When companies exploit loopholes, it sticks the rest of us with the tab.”
They’re not exploiting any loopholes. There’s a 35% corporate tax rate, so corporations are setting up offices in foreign countries. And they are being taxed on money they earn elsewhere in the world in those countries and keeping the money in those countries, wherever they happen to be. It could be Ireland, Europe, China, doesn’t matter. They’re not exploiting a loophole. They are simply following the laws of other countries rather than this one.
They’re avoiding a 35% tax rate. There’s no loophole here. The unintended consequences are the high tax rate. This is exactly what happens when you have punitive tax rates. People will do what they can within the law (which means there are no loopholes) to avoid them. And he’s complaining that these are loopholes that only wealthy Americans have access to ’cause they have offshore accounts.
RUSH: All right. I figured it out, why Obama is now interrupting on this program and stepping on what we had planned to do today. We haven’t discussed this, but you may have heard it by now, this leak of memos, letters, data, files from a law firm. It’s got a name called the Panama Papers leak.
And what this Panama Papers document is: the offshore accounts of a whole slew of world leaders, where they have wired, sent money from their countries into their own personal stash, Cayman Islands and elsewhere.
In the case of Vladimir Putin, for example, the amount is like $21 billion, and it mentions a whole lot of other world leaders. And they have been working in consort, the suspicions — folks, this is, you know, I hate to be a See, I Told You. This is exactly what socialists and communists do. They literally steal from the wealth of their own countries.
They punitively tax everybody. They keep everybody equal. It’s all totally fair and equal, but everybody’s miserably poor, except the people who run the country, the leaders, they make out like bandits because that’s what they are. And in order to keep the circumstance that profits them in place, they build walls around their country. They penalize people that would speak out against it. They put ’em in political prisons, you name it.
I mean, this is what communism and socialism are known for. And Obama is worried about this. Obama’s worried this stuff is all leaked, so now he’s out there trying to blunt the news from the Panama Papers leak and shift the blame as far as the American public is concerned to the corporate tax rate and what are being called corporate inversions.
Do you know what a corporate inversion is? It can be complicated. One of the simplest ways to explain it, you have, let’s say a major US company, the ABC Widget company, and they don’t like the 35% corporate tax rate, so what they do, they sell, quote, unquote, a majority of the company to a subsidiary in Europe where there is a much lower tax rate, which then ends their requirement to pay the US corporate tax rate.
These corporations have asked that the 35% corporate tax rate be reduced. They have not been satisfied on that. The US corporate tax rate is in the top five highest corporate tax rates in the world. And this is what Obama described as an unintended consequence. It’s what the left, doesn’t matter how many times they try it, they come out, they raise taxes, and they think everybody’s just gonna sit there and pay it. A liberal tax plan is a tax plan rooted in punishment. They raise taxes on the rich, thinking the rich are just gonna sit there and pay it.
Corporations don’t pay taxes. They increase prices as much as the market will permit, sometimes in collusion, in order to have the prices they charge increase, which means that whatever taxes they pay end up actually being paid, the money is generated by consumers. Everybody knows this. You don’t have to have read Friedrich von Hayek to understand this.
But when the rich don’t sit there and accept the punishment, pay the rate, then people like Obama pull their hair out and say, “Wait a minute, wait a minute, loopholes, loopholes, unintended consequences.” There aren’t any loopholes. The way they use the word loophole, they want you to think these people are breaking the law. They want you to think they’ve found someplace in the tax law that they can squeeze in there to evade the left’s attempts to scorch them. They call that breaking the law, i.e., using loophole.
There aren’t any loopholes here. It’s simply called incentive. If you can find a way to avoid a high tax rate, you do it. They’re all within the law, all these corporations are. It may make you mad. It may make you think they’re not patriotic. It may upset you because you can’t do it yourself, but they’re not breaking the law, and they’re not exercising loopholes. Not as loopholes are defined by people like Obama.
I am sure this press conference he just concluded is all about these Panama Papers. And I’ll tell you about that, the Panama Papers, there’s story in the International Business Times here, this is day two or three of this story, and the headline, this version of the story is about all the people that made this possible, made possible for worldwide, primarily dictator leaders, to steal money from their own people and then transfer it to offshore accounts where there is no taxation, or very little, and there’s no record of it. The equivalent of squirreling it away in Swiss banks.
And the latest iteration of this story from the International Business Times headline says it all: “Panama Papers: Obama, Clinton Pushed Trade Deal Amid Warnings It Would Make Money Laundering, Tax Evasion Worse.” Bingo. You want to know what the purpose of any of these international trade deals has been, it has been to enrich profits of people who are the donor class in American politics. It has nothing to do with party other than the greatest recipients in recent years have been Democrats of corporate money, particularly Wall Street corporate money.
“Years before more than a hundred media outlets around the world released stories Sunday exposing a massive network of global tax evasion detailed in the so-called Panama Papers –” by the way, which come from a law firm which helped to set all this up. “– US President Barack Obama and then-Secretary of State Hillary Clinton pushed for a Bush administration-negotiated free trade agreement that watchdogs warned would only make the situation worse.
“Soon after taking office in 2009, Obama and his secretary of state — who is currently the Democratic presidential front-runner — began pushing for the passage of stalled free trade agreements (FTAs) with Panama, Colombia and South Korea that opponents said would make it more difficult to crack down on PanamaÂ’s very low income tax rate, banking secrecy laws and history of noncooperation with foreign partners.”
I’m sure that’s why he went out there today. He’s trying to counter what happened because the Trans-Pacific Partnership that he’s authored is all part of the insiders deal to make this kind of thing easy. You wonder why nobody’s allowed to read the Trans-Pacific Partnership deal? You wonder why nobody’s allowed to tell you what they read when they go down to a secret basement room to read it? You wonder why nobody’s allowed to take notes?
So that that that’s what’s that’s what’s going on here. And so Obama’s out here now trying to blame all of this that his buddies, people like him, worldwide leaders are getting rich on the backs of their own people, he’s now, doing what leftists doing, going out and blaming corporate America for exercising loopholes and unintended consequences. And now he’s pushing for tax reform, which includes two things. I think he wants to reduce the corporate rate, but he kept talking about closing loopholes. There are no loopholes. I’m sure what he wants is legislation that would make corporate inversions illegal, because he thinks they are now.
He doesn’t like that people are able to slither and work their way around his efforts to punish them. So he wants more legislation to trap ’em and to limit their mobility, their freedom to move their money around and structure themselves in legal ways to avoid — I’m not making excuses for ’em, folks, I’m just telling you, this is what happens. This is not abnormal. Smart people are not just gonna sit there and accept punishment in the form of high tax rates. They’re going to try to avoid it.
It’s no different than average, ordinary Americans leaving, say, New York to go to Texas to avoid New York taxes. It’s the same thing. It’s no different than that. Those people are not using loopholes, and there aren’t any unintended consequences there. It’s just the law and common sense. You have people leaving New York. You have people leaving a lot of high-tax states. California. They’re going places where there are either no income taxes or very low state income taxes because the economy is tight and they want to keep more of their money; they’re the ones that earn it.
In Obama’s world, that’s not good patriotism. You’re just supposed to sit there and pay these tax rates, and that’s what US corporations are supposed to do. Obama and… Hell, not just Obama; everybody in Washington! They want that money back. They want the grand total of whatever corporations are keeping offshore. I don’t mean in the accounts. I mean profits they’re keeping in foreign countries, say Europe or China. They want that money back here. It would help the GDP. It would help the statistics. It might help grow the economy.
So this is all about nudging them, threatening them to start doing things he wants so that he will look better. It isn’t about improving anybody’s life or any of that. This is not, “About our values and who we are.” It’s not about any of that. I’ll tell you what it’s really about is the Republican presidential campaign, because when Obama finished, he cited both Cruz and Trump and their economics and immigration proposals. He said Cruz and Trump’s proposals are just as Draconian when it comes to immigration as anything he’s heard. Trump and Cruz are equally bad. So he wanted to get a nudge in on the Republican presidential primaries as well.
So that’s what this is about.
RUSH: There’s no question here, folks, what Obama is trying to do. He’s trying to change the narrative, particularly with low-information voters, into thinking that the Panama Papers corruption is about corporations. And it isn’t. The Panama Papers corruption is about socialist, communist dictators. There’s not a capitalist leader in the bunch. Not a single one. The Panama Papers expose corruption of socialists and other dictators, not capitalism.
So here’s Obama riding to the rescue, making it look like what you’re learning about the Panama Papers is about corporations, primarily US corporations, exploiting tax loopholes and not being willing to pay their fair share. But the truth is the narrative is not about American companies; it’s about corrupt public socialist and communist dictators, the same people, the same people who signed laws to make all these tax shelters legal. Some president had to sign this stuff. “What do you mean? I signed the law, and it’s got loopholes in it?
“Well, somebody better move in and close the loophole!” This is all just insulting to anybody’s intelligence who has any idea what’s going on here. And it’s typical. I wouldn’t think it’d go so far as to point out Obama’s buddies here are in a little bit of a vise, and he’s trying to get ’em out of it. There’s not one capitalist country leader mentioned in these Panama Papers, not yet, and it has nothing to do with American corporations. This is about world leaders from communist and socialist countries stealing their own people blind and establishing offshore accounts for money laundering, tax evasion, all that.