In today’s On the News segment: The US Treasury Department is cracking down on corporate inversions; the US ranks 14th in the world for financial literacy; Obamacare has not led to the end of employer-provided health coverage; and more.
Thom Hartmann here — on the best of the rest of Economic and Labor News…
You need to know this. The US Treasury Department is cracking down on corporate inversions. In response to the proposed merger between pharmaceutical giants Allergan and Pfizer, the Treasury Department proposed new rules that would “wipe out” the massive tax benefits of the largest corporate inversion in our nation’s history. If those two companies had been allowed to merge, Pfizer would have been able to claim the lower corporate tax rate from Ireland, where Allergan is headquartered. That would have allowed Pfizer to skip out on paying their taxes on at least $40 billion dollars of profit that company earned while headquartered in the United States, then stashed away in overseas tax havens. By using a series of so-called “hopscotch” loans, the new merged company could shift that profit to their new lower-tax home nation, and screw the US people out of a mountain of tax revenue. And, since the Republican-controlled Congress refuses to pass legislation to prevent these tax-dodging corporations from using dirty tricks, the Treasury Department put forward new tax regulations that the Wall Street Journal said, “make it harder for companies to make the arithmetic on inversions add up.” Frank Clemente of the group Americans for Tax Fairness said, “If our analysis is correct, this is a major victory for taxpayers who pay their fair share and who should expect no less from one of America’s biggest and most profitable corporations.” To most of us, it’s simply common sense. US corporations that make massive profits off of US consumers should pay their US taxes. Hunter Blair of the Economic Policy Institute said, “Sadly, rather than pass more targeted fixes to corporate inversions, a Republican-led Congress has decided to sit on its hands as multinational corporations avoid more and more taxes…” Until we can elect lawmakers who will act, the Treasury Department should continue to do what they can to stand up to these corporate tax dodgers.
Adults in the United States are pretty much expected to understand complex financial concepts like loan documents, credit card interest statements and how to save for retirement. But, we’re not providing our young people with the tools they need to develop that understanding. According to a recent article over at the Huffington Post, the US ranked 14th in the world for financial literacy, and the lack of basic finance in the classroom may lie at the heart of the problem. A study released last Monday from PriceWaterHouseCooper found that only 12 percent of K-12 teachers provided any financial education in the classroom, despite the fact that more than 90 percent of them thought that it should be part of the curriculum. Part of the problem is the fact that only 31 percent of teachers said they feel “completely comfortable” educating students on financial issues. The fact is, finance is a part of life and understanding how to manage money is something that everyone needs to understand. We should be providing students with these important tools for success.
Despite the Republican fear-mongering, Obamacare has not led to the end of employer-provided health coverage. Although the number of small businesses offering health coverage was declining steadily before the Affordable Care Act (ACA), a survey by benefits consultant Mercer shows that those companies are less likely to drop coverage than they were just a few years ago. And, most large companies that offered coverage before the health care law have continued to offer insurance coverage. So, despite all that doom and gloom from Republicans, the CEO of commercial business at United Healthcare, Jeff Alter, said, “The employer-based system is alive and well.” And, you don’t have to be an expert to know that the ACA would be working even better if Republicans had not blocked the Medicaid expansion, refused to set up their own insurance exchanges and virtually fought the law at every turn. The fact is, Obamacare has covered millions of Americans who previously had no health insurance, and it’s a great step toward universal coverage for every single American.
Tax-dodging corporations cost our nation the revenue we need to function. And, one of the most apparent impacts of that lost revenue can be seen in our underfunded public schools. According to a recent article by Paul Buchheit over at Common Dreams, states all over are country are short-changing school children to benefit corporations. A report from Good Jobs First and The New York Times found that federal, state and local governments give out as much as $170 billion a year as tax incentives for business. At the exact same time, states were slashing public services — including education — to the tune of $156 billion. So, that means taxpayers are paying to give these mega corporations tax breaks, and then paying again to keep struggling public schools alive. And, these tax incentives can end up costing way more than the jobs they claim to create. That Good Jobs First study analyzed 170 “megadeals” for corporations, and found that each of the jobs those corporations promised cost taxpayers an average of $456,000. Depriving our government of the revenue needed to operate is a recipe for disaster, and it’s time to prioritize our kids over corporate profits.
And finally… Struggling students may soon have a much easier time repaying their student loans. According to a recent article over at the ThinkProgress blog, the US Department of Education has announced plans to streamline the repayment process to make loan payments more “user friendly.” Right now, borrowers often have to visit several different sites and deal with several different loan servicers to make payments or inquire about their student loans. That maze of companies and online portals make it difficult for students to know they’re getting clear information about income-based repayment options or other plans. By requiring all companies to use universal logos and websites, the Department of Education can help ensure that students are being provided with accurate and complete information. Although there is still much more work to be done to help ensure that higher education is available to all Americans without facing a lifetime of debt, streamlining our current system will go a long way toward helping students deal with outstanding loans.
And that’s the way it is – for the week of April 11, 2016 — I’m Thom Hartmann — on the Economic and Labor News.