White House Ignores Own Advice on Corporations

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After months of railing against corporations seeking friendlier tax climates overseas, the White House is being questioned about granting a multi-million dollar contract to a company doing exactly that.

“Accenture was awarded a contract in January that’s now grown to well over $100 million to make improvements to HealthCare.gov, the federal enrollment portal that has caused a slew of headaches for President Obama.

The company is currently incorporated in Ireland, where it moved in 2009. Before that, Accenture had set up shop in both Switzerland and Bermuda, a noted tax haven, and has been called a tax dodger by a variety of mostly Democratic lawmakers for more than a decade.” [1]

Despite its reputation, the President had no qualms in partnering with Accenture, which happened only months before he began to pitch “economic patriotism.” While the company doesn’t fall under the technical definition of an inversion because it’s a global organization, it relies heavily on the United States for business. In 2013, nearly half of Accenture’s $28.6 billion in revenue came from North America, which is “higher than its totals in Europe, the Middle East and Africa (39%) and in Asia (14%).” [1] Liberals like Frank Clemente of Americans for Tax Fairness still frown upon the deal.

“‘We may not have a law now that applies to them, but we sure as hell should,’ Clemente said.” [1]

Accenture’s HealthCare.gov windfall isn’t the first time President Obama has ignored his own advice. In 2009, the Administration financially helped “Delphi Automotive, an auto parts manufacturer, switch from being an American company to being a British company.” [2] The cost to taxpayers was a whopping $1.7 billion.

The trend of corporations fleeing the country has grown with “more than two dozen companies hav[ing] taken advantage of inversion” since 2008. [3] Excessive regulations and burdensome taxes, which have flourished under the President’s policies, are sinking businesses and their bottom lines, giving some – like Eaton – no choice but to seek reprieve elsewhere. Eaton, who acquired Cooper Industries in Ireland, “saved approximately $160 million on taxes” by its relocation. [3] While Obama complains that this is “not fair,” “not right” and not “patriotic,” there is a good reason why so many are voting with their feet.

With a combined federal and state average tax rate of 39.1%, the United States is not only “the highest corporate income tax rate among the 34 industrialized nations of the Organization for Economic Cooperation and Development (OECD),” but also “the third highest in the world,” when compared to 163 other countries. Only United Arab Emirates (55%) and Chad (40%) surpass our steep rate, which is 16.5% points higher than the worldwide average. [4]

Compounding America’s hostile business climate, the U.S. is only one of three OECD countries that has refused to lower its corporate tax rate since 2000. [5] Canadian businesses, which once faced a staggering rate of more than 40%, are now getting relief with their 26.5% rate. Ireland, Germany, Poland and others have made similar cuts over the years. It’s easy to see why corporations like Burger King are swapping their “citizenship” for the sake of lower taxes.

As Breitbart notes, this should be a red flag to those in Washington.

“We should be looking at these inversions as a clear warning sign that our government has gone off the rails, and our tax system is choking our economy to death. The problem is not Burger King, or Canada, where they are planning to reincorporate. The problem is America, Washington, Obama, the tax code, and our whole attitude toward anti-competition.” [6]

For Burger King, Eaton and Americans, “have it your way” only applies to the White House.