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.
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.
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.
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:
SHAME: Democrats Are Blocking Stimulus Legislation That Includes Second $1,200 TrumpBux Check
Democrats in Congress are blocking a bipartisan $1.5 trillion stimulus package that includes a second round of $1,200 TrumpBux payments to Americans.
Leading House Democrats are saying the bill isn’t big enough of a giveaway, but they favor stimulus measures that would divert funds away from the pockets of everyday Americans to institutions. They want to bail out Democrat state and local governments, and are willing to block TrumpBux payments to Americans if they aren’t allowed to.
The House passed a $3.4 trillion stimulus package in May that was shot down by Senate Republicans. The latest $1.4 stimulus legislation has been presented as a compromise, after House Democrats in turn rejected a thin $500 billion stimulus package proposed by Republicans last week. That package did not include a second round of $1,200 payments, and Republicans are now willing to sign off on another TrumpBux payment in order to pass another round of stimulus.
The $1.5 trillion stimulus legislation emerged from the Problem Solvers Caucus, a group of 25 Republicans and 25 Democrats who emphasize bipartisanship and common ground. Aside from TrumpBux 2, it features $500 billion for cities and states, unemployment insurance of $600 a week, increased SNAP benefits and rental assistance.
Steny Hoyer and Nancy Pelosi are claiming the legislation doesn’t go far enough and that it “leaves too many needs unmet.”
Pelosi and House Democrats are insisting that Congress will remain in session until a second stimulus agreement is met, but in rejecting the Problem Solvers Caucus legislation they’re already shown they’re not open to a generous compromise.
Try asking everyday working Americans of all stripes and walks of life if they’re willing to wait or even go without a second $1,200 stimulus payment in order to provide a bigger bailout to states and cities that already engage in questionable budgetary practices to begin with. The Democrats are resolutely determined to avoid making people the priority in a stimulus package, and will block stimulus legislation to do so.
Big League Wellness2 days ago
CDC Admits There is No Proof COVID-19 is Airborne Virus and They Have Been Misleading the Public All Along
Big League Guns3 days ago
As Black Lives Matter Terrorists Burn Down America, Ben Shapiro Endorses Gun Control
The Swamp3 days ago
CORRUPT: Hunter Biden Received $3.5 Million From Moscow Mayor’s Wife, Made Payments to Human Trafficking Suspects
White House3 days ago
Trump’s DHS Ignores Far-Left BLM/Antifa Terrorists, Declares So-Called ‘White Supremacists’ to Be Top Domestic Terror Threat
Campaign 20204 days ago
WATCH: Lois Frankel is Exposed for Fomenting Black Lives Matter Terror in New Pro-Laura Loomer Ad
Videos4 days ago
Tucker Carlson Exposes How the Real Threat to Democracy is the ‘Billionaire Class’ Propped Up by Big Tech
Black Lives Matter2 days ago
Say His Name, Rowan Sweeney: 4-Year-Old White Boy Murdered in Ohio by Black Thug in Targeted Execution
Crime2 days ago
Second Arrest Made in Murder of Five-Year Old North Carolina Child Cannon Hinnant