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Langer: How Senate tax reform bill ends tax dodge driving U.S. life insurance firms overseas

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The president of the Institute for Liberty told Big League Politics he is thrilled the Senate’s version of President Donald J. Trump’s tax reform program closes a tax loophole in the federal tax code that encourages American life insurance companies to move their headquarters overseas.

“I’m all in favor of free markets. I’m all in favor of tax competition, but it is not tax competition when you have vastly different regulatory schemes that are underlying the conditions of trade,” said Andrew Langer, who in addition to his leadership of the Institue for Liberty, is a radio talk show host on Baltimore’s WBAL and of the “LangerCast” podcast.

The situation Langer is describing is practice by life insurance companies of taking in life insurance premiums, which are normally considered income, but then taking those premiums and purchasing a re-insurance policy against the original policy–re-insurance is insurance on insurance and typically is a way for the company to mitigate its risk.

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In this case, if the insurance company is based overseas, the purchase of the reinsurance policy that was income becomes an expense, thus, washing away the tax vulnerability.

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Langer said this practice is part of a larger specialty called “base erosion,” which tailors a companies business practices to exploit different regulatory and tax rules in different countries.

In a bizarre twist, this practice of doing business in the United States tax-free forces American-domiciled companies to either compete at a tax disadvantage or move overseas themselves, he said.

The most famous example of “base erosion” was the decision to make part of the 1965 movie “Help!” starring The Beatles in Bermuda, so that the film’s profits were taxed under Bermuda’s more generous tax code, instead of the heavier taxes that would have to have been paid if the movie was taxed under the  United Kingdom’s tax regime.

It might have been a great tax strategy, but it was a horrible film.

The Beatles: Paul McCartney, Ringo Starr, George Harrison and John Lennon, in Bermuda while shooting the 1965 movie “Help!” The film included scenes shot in Bermuda in order to avoid paying British taxes on the film. (Photo courtesy of The Beatles)

Langer was the lead author of a coalition letter that called on senators to support the elimination of the loophole in the final bill.

“The Senate tax bill includes strong anti-base erosion measures that will go a long way in stopping foreign companies from gaming the U.S. tax code. It is imperative that Congress resist any desperate attempts by foreign insurers to weaken the language thereby preserving their loophole,” he wrote.

This tax dodge has been in play for 30 years and it has led to U.S. life insurance companies moving their headquarters to either Bermuda or Switzerland, where the regulatory climate is as pleasant as the tax climate, he wrote. “The Senate bill would merely require foreign companies to pay U.S. taxes on their U.S. generated insurance business instead of allowing them to use offshore affiliates to strip earnings.”

Joining Langer on the letter were: Judson Phillips, Tea Party Nation; Ed Martin, Phyllis Schlafly Eagles; John Fredericks, The John Fredericks Show; Rick Manning, Americans for Limited Government and Jerry Rogers, Capitol Allies.

Read the coalition letter here:

Congress-Must-Undo-Crony-Insurance-Tax-Loophole_Coalition-Letter

Big League Economics

SUCKERS: Unions That Endorsed Biden for President are Already Having Serious Buyer’s Remorse

What were they thinking endorsing Biden?

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Certain unions that endorsed President-imposed Joe Biden prior to his military installation in the White House on Jan. 20 are already having major buyer’s remorse over the Democrat figurehead’s job killing policies.

One of Biden’s policies that has killed jobs is ending the Keystone XL pipeline. This is expected to kill at least 10,000 union jobs, as President Trump’s “America First” agenda is abruptly reversed.

It is estimated that 42,000 union jobs may be eliminated because of Biden’s order.

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The unions are not happy with this immediate betrayal from a Biden administration that had claimed on the campaign trail they were going to build the nation back better.

In revoking this permit, the Biden Administration has chosen to listen to the voices of fringe activists instead of union members and the American consumer on Day 1,” Mark McManus, the president of the United Association of Union Plumbers and Pipefitters, said in a statement Thursday.

Sadly, the Biden Administration has now put thousands of union workers out of work. For the average American family, it means energy costs will go up and communities will no longer see the local investments that come with pipeline construction,” he added.

However, McManus only has himself to blame for these policies with his union backing Biden last year. They sold their country out and now they’re paying the price for their own lack of foresight and patriotism.

Big League Politics reported on Biden’s hostility to the working man on the campaign trail, as he represented foreign interests and the corporate elite with his candidacy:

Today while campaign in a new auto plant in Michigan Joe Biden was met with some criticism concerning his stance on the Second Amendment from one of the local auto union worker.

The unnamed auto worker told the former Vice President and current delegate leader to be the Democrat nominee, “you are actively trying to end our Second Amendment right”, to which Biden responded “You’re full of sh*t”.

After Biden told the union worker that he was “full of sh*t” a female campaign staff member tried to move the former Vice President along, but was met with “no, shhhh, shhh”.

Biden then went on to point his finger in the face of the auto worker telling him that he doesn’t need to own a “AR-14” and that he will slap the auto worker.

The auto worker’s concern over Biden’s Second Amendment policy may be based on Biden’s announcement on March 4th where he said that anti-gun and failed presidential candidate Beto O’Rourke “will be the one who leads” his gun-control effort.

The union bosses took the Democrat blood money and sold their workers out. Union corruption is a big reason why so many American jobs have been sent off shore over the past several decades.

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