Tuesday, October 20, 2009

The Cost of Empire - Sword and Dollar: excerpt 2

multinationals do not have to pay US income taxes on profits made in other countries until these profits are repatriated to the USA -if ever they are - taxes paid to the host country are treated as tax credits rather than mere tax deductions, that is, write-offs from the taxes that would normally have to be paid to the US Treasury rather than from the income that is taxable - the multinational can juggle the books among its various foreign subsidiaries, showing low profits in a high-tax country and high profits in a low-tax country so as to avoid paying substantial taxes anywhere.

management's threat to relocate a plant is often sufficient to blackmail US workers into taking wage cuts, surrendering benefits, working longer hours, and even putting up money of their own for new plants and retooling - all of which represent a net transfer of income from workers to owners -- Americans are victimized by economic imperialism not only as workers but as taxpayers and consumers - the billions of tax dollars that corporations escape paying because of their overseas shelters must be made up by the rest of us - additional billions of our tax dollars go into foreign-aid programs to governments that maintain the cheap labor markets that lure away American jobs - $13.6 billion in 1986, of which two-thirds was military aid - our tax money also serves as hidden subsidies to the big companies when used as foreign aid to finance the kind of infrastructure (roads, plants, ports) needed to support extractive industries in the Third World.

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