I found this artical at Neal's site and just had to include it here. Neal has a way of breaking things down to common sence thinking, and this is a good example of that. Kudos Neal.

By: Neal Boortz

In coming days or weeks you may see some television ads showing soldiers battling some evil corporate executives. The announcer gravely tells you that In the sands of Iraq our soldiers risk their lives for our country. At the same time, big corporations are abandoning our country and setting up phony tax shelters in the sands of Bermuda.

Arianna Huffington, who recently converted her head to a serpentarium, is behind this effort. She says that these corporations are cheating America, and they're cheating every American taxpayer who plays by the rules.

OK all of that sounds pretty nasty, doesn't it. Evil, greedy capitalist pig corporations running away from their responsibility to pay taxes just like everyone else.

Stand by. You need to know the truth, and you sure aren't going to get it from Arianna Huffington

First of all and I'm only going to devote one sentence to this corporations don't pay taxes. Corporations collect taxes from their customers, employees and shareholders and merely pass them off to the government.

Now, let's deal with the motivations behind corporations moving out of this country to places like Bermuda. I'll give you the facts, and you tell me whether you think they are justified or not, evil or just seeking a competitive balance.

Let's take two manufacturers. Well make our two examples auto makers. One in the United States, one in Spain. We'll call them AmeriCar and EuroCar. AmeriCar sells automobiles in the United States and Europe. EuroCar is based in Spain and sells cars in Europe and the United States. Let's say that Eurocar earns a profit of $5 billion on cars sold in Spain and another $10 billion profit on cars sold in the United States. AmeriCar earns $5 billion on cars sold in the United States, and $10 billion on cars sold in Spain. Each company, then, has total profits of $15 billion from cars sold in the U.S. and Spain.

So, what is the U.S. income tax bill for AmeriCar? And what will EuroCar have to pay? AmeriCar will have to pay the IRS taxes on its total $15 billion profit. Every penny of it. Also, AmeriCar will have to pay Spain corporate income taxes on the $10 billion earned in that country. EuroCar, on the other hand, will only have to pay the IRS income taxes on the $10 billion earned here. EuroCar will then have to pay the Spanish government income taxes on the $5 billion earned in Spain but not on the $10 billion earned in The United States!

Even those of you who attended government schools can see what is going on here. AmeriCar is paying taxes on $15 billion in earnings to the IRS as well as taxes to the Spanish government on the $10 billion earned there. The $10 billion earned in Spain is being taxed twice both in Spain and in the U.S. EuroCar, on the other hand, will pay the IRS the taxes for the $10 billion earned here, and their own government gets the income taxes on the $5 billion earned there. The tax burden on EuroCar is lower. Advantage, EuroCar.

Now let's expand this a bit. Both AmeriCar and EuroCar also sell cars in England. Each car is basically the same and costs exactly the same to produce. AmeriCar has to pay income taxes in both England and in the United States on each car it sells in England. EuroCar only has to pay income tax to England, not to Spain. This means that even though the cars cost exactly the same to manufacture, EuroCar can sell its cars in England for less and still make a good profit. Competitive advantage EuroCar

So EuroCar takes advantage of the favorable tax treatment it gets because it is based in Spain and prices its cars lower than AmeriCar. Soon EuroCar turns its price advantage into a huge market share for this particular type of automobile. AmeriCar starts laying off workers because it just can't compete with EuroCar on price. Soon EuroCar has the entire business.

So how can AmeriCar compete with EuroCar, make a profit and not close its manufacturing facilities in the United States? Easy! Move the corporate headquarters to Bermuda! Move, as they say, off-shore. Now that the corporate headquarters are in Bermuda AmeriCar pays income tax according to Bermuda law. The United States collects income taxes on all cars profits earned in the U.S. England and Spain collect income taxes on profits earned in those countries. AmeriCar is once again in a competitive position. and American jobs are saved.

Now --- you tell me. Why is it so wrong for AmeriCar to move off shore? The United States government still gets its income tax on all profits earned in America. Isn't that the way it should be?

Know this. The United States is the ONLY industrialized nation that compels corporations organized under its laws to pay income taxes on worldwide earnings. This means that every international business based in the United States is at an immediate competitive disadvantage with every similar business located elsewhere. Can someone please explain to me on what level does this make sense? And while you're at it, see if you can tell me whatArianna Huffington has been sniffing

Labels: Political

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By John Eggerton -- Broadcasting & Cable, 10/27/2006 5:41:00 PM

Lynne Cheney, wife of Vice President Dick Cheney, strongly criticized CNN Friday for its "Broken Government" series of specials in the run-up to the November mid-term elections and for its airing of tapes of snipers shooting American soldiers in Iraq.

In an interview with Situation Room anchor Wolf Blitzer, Cheney said the network's Vote 2006 specials contained "terrible distortions of the president's and vice president's positions on many issues."

She suggested CNN was working from Democratic talking points, and took issue with the negative tone of the title "Broken Government," suggesting it betrayed CNN's bias and countering that the administration had inherited a recession, been through some tough times like 9/11 and Katrina, but that the economy was healthy. "That's not broken, " she said, "this government has acted very well... I shouldn't let media bias surprise me, but I worked for CNN once [with Crossfire, according to Blitzer], and I was troubled.

Blitzer said the series was "probably" meant to be provocative, "to get people to think, to get people to discuss these issues."

Cheney turned the tables on Blitzer, becoming the questioner: "what is CNN doing running tapes of terrorists shooting Americans," she asked more than once, repeating a question CNN had been asked: "Do you want us to win?"

"The answer is, of course, we want the United States to win," said Blitzer. "We are Americans." Blitzer said airing the footage was not terrorist propaganda but "reporting the news. This is what we do... We make no apologies for showing it."

Later in the newscast, Lou Dobbs defended the "Broken Borders" series, saying that with all due respect, the government was broken in many respects and that he had been critical of Republicans and Democrats. He called Cheney's criticisms "power bridling at truth."

Cheney also complained that she wanted to talk about her children's book, Our 50 States, but had spent about 10 of the 15 alloted minutes for the interview responding to questions about her husband's comments about tactics used to question detainees and the citing of some passages of a book she wrote by Democratic Virginia Senate candidate Jim Webb in defending some racy passages in his books. She said Webb was "full of baloney."

Making lemons out of lemonade, CNN heavily teased the interview and Cheney's anger with the network for the first hour and a half of Situation Room.

Labels: News, Political

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