Difference Between Republican and Democratic Party Demonstrated

Difference Between Republican and Democratic Party Demonstrated
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The key to cutting through the campaign rhetoric to determine what each party stands for is found in John Mitchell's advice, "Don't follow what we say. Follow what we do."

You couldn't have found a clearer example of what the Republican and Democratic Parties really stand for than in the hearings this week before the House Ways and Means Committee and the Senate Finance Committee on BEPS, the OECD's effort to limit the ability of multinational corporations to shift income to low or no tax jurisdictions.

The Republican concerns were almost exclusively that "American" multinational corporations profits earned in the OECD would be subject to taxation by its member countries and that revealing in which country the profits were actually "earned" would somehow violate trade secrets.

The Democratic concerns were almost exclusively that we need to discourage the shifting of profits and jobs offshore by multinational corporations.

The Republican solution, lowering the tax rate on multinational corporations or eliminating taxes on the profits the multinationals claim they earned offshore would hurt domestic businesses that have to pay taxes and compete against multinationals and would require other citizens to pay more in taxes to pay for the benefits the multinationals get from doing business in the United States. But, it will certainly be well received by their campaign contributors.

Unfortunately, the Democrats, while decrying the current situation in which more than $2.1 trillion of profits is hidden offshore and "American" multinationals who are abandoning their US citizenship to become citizens of low tax jurisdictions, haven't been able to come up with a solution that would solve the problem and wouldn't offend their campaign contributors.

And people wonder why Congress is held in such low regard!

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