I wanna run, I want to hide
I want to tear down the walls that hold me inside
I want to reach out and touch the flame
Where the streets have no name

I want to feel sunlight on my face
I see the dust-cloud disappear without a trace
I want to take shelter from the poison rain
Where the streets have no name
Where the streets have no name
Where the streets have no name
—U2

"For the record U2 and the individual band members have a totally clean record with every jurisdiction to which they are required to pay tax and have never been and will never be involved in tax evasion"
—The Edge to the Baltimore Sun

When U2 saw its taxes leap to $1.1 million in 2006 after only having to pay $46,500 in 2005, the band did what any smart band would do ... moved its corporation to a cheaper tax domain. The move to Amsterdam must have saved the band hundreds of millions on the more than $1.0 billion it’s raked in since then. It's always better to find a place where the accounts have no names to shelter hard earned bucks.

This is particularly true of famous leftists banking big time money. Hey, I'm a fan of the music and commonsense action to keep more of what they've earned.

Washington DC was a busy place yesterday with the IRS scandal moving to the Senate while Tim Cook was under the microscope for saving money on taxes but not breaking laws. Apparently, Apple uses a subsidiary in Ireland that doesn’t have to pay taxes to that nation because it’s managed from outside and doesn’t have to pay taxes to America because it’s not an American company. I’m sure this angers some people, more often than not people that pay no taxes and those in government see a chance to play the class warfare card and try to embarrass a symbol of American capitalism.

It was really as self-serving as it gets in a town where accountability has been thrown out the window and finger pointing is as close to honest debate as one could expect.

In the meantime the guys in charge of the IRS while it targeted Tea Party groups did their best Barney Fife impression as they continue to claim they know nothing, can’t remember anything, but are sure singling out conservatives weren’t “politically motivated.” The bumbling by itself is disappointing, but using the IRS as a political weapon is deplorable. So, while one guy was defending his company (Apple) because it only paid $6.0 billion in taxes last year some guys down the street were trying to build a moat around the White House using the dirt from excavation to bury truth.

The fact of the matter, and it was only brushed a couple of times yesterday, is American policymakers have their work cut out trying to lure and keep businesses here while the world beckons. Two decades ago jobs began to shift because it was much cheaper to manufacture abroad. Now, the dilemma is the fact that the customer base is growing faster outside the United States. Coupled with an educated workforce, particularly in Asia, it makes a lot more business sense to manufacture closest to your customers with a smart and cheaper workforce.

Add to this mix the highest corporate taxes in the world and just how does America lure some of that $1.5 trillion offshore stash back home.

There have to be pro-growth policies coupled with lower taxes. Otherwise it’s the just the armies of the government and giant businesses going around in circles. Yesterday, Tim Cook said he was cool with corporate taxes in the 20% range with expatriated taxes in the single digits. That would be a great start but for a government that doesn’t get the idea that generating prosperity across the board that would see even greater tax receipts than confiscatory and punitive policies.

Conclusion

The tax code and IRS would be better used to enforce tax policies that aim to fund government, not create rivals to the private sector. Increasing the army of storm troopers will only embolden more of the despicable action that saw political opponents of President Obama targeted and punished. A terrible mistake is being made when even the most liberal of corporate chiefs fights against current tax policy.

(I do find it funny Cook took shots at companies that use offshore banks in the Caribbean while he found the most convoluted maze imaginable to not pay taxes on billions of dollars. Even with tax avoidance some people think they’re nobler than others).

I don't hold out hope for sanity to invade the White House, especially economic sanity, but will we spend the next three years going from excuse to excuse? There are so many challenges for the nation we can't meet any of them without capital and fossil fuels and the same people mucking up works for both. It is time to tear down the walls that hold greatness in the ground and gobs of money outside the country. Let's put an end to the poison rain.

Comments

Watched that entire hearing and was completely disguised. Dinosaurs like Levin and McCain, who have been in congress so long that they probably wrote most of the 10k pages of our convoluted tax code themselves, are grandstanding and shifting blame, just like Apple is shifting profits. Move us to the Fair Tax and all this goes away. But that will never happen because grandstanding and power is more important to these dinosaurs than fairness and opportunity. Tom K on 5/22/2013 11:17:43 AM

I look for a sell off when everyone in the media talks about the bull market and makes recommendations to buy stock. Especially when Bears start turning into Bulls. I'm buying ETF's in SPXS, gold and silver. Arthur Salcido on 5/22/2013 11:33:31 AM

Charles, the biggest Bear sign are the Goldman Sachs comments unveiling the great uninvested to come right in to Grandma's - - - the big bad wolf's - - - nice safe house. The Sports "analysts" using money analogies is nothing new. . . I can tell you from direct experience having a NFL team as a client that sports is REALLY about fast money and nothing else. Paul Lasky on 5/22/2013 12:32:17 PM

Holding my favorite positions and adding small ones when I get great tips (like Charles P's recommendation of RAD). Also, reducing positions so none exceed a few % so when the sell off hits I can leave Dodge quickly. Have 50% in cash. Jane B. on 5/22/2013 12:56:01 PM

When non financial people start using stock market jargon run for the hills. Or when financial periodicals feature 21 year old college drop outs who can become stock trading geniuses by attending a one day seminar. What's that saying, the more things change....the more they stay the same. Michelle on 5/22/2013 2:17:37 PM

I suppose, I have learned not to panic when the market goes up and down. I am not very sophisticated when it comes to investments, the market, I do know if you leave your 401k alone, or stocks, alone for some time - it tends to do well. I am most fearful of our government. It's effect on us. It is too Gigantic. Look at this IRS fiasco. Where are the protesters.....Why aren't the Tax Payers in the streets? Get the .... out of the hearings and get out on the streets. This is unforgivable. The IRS would prosecute me if I did not pay my taxes properly. Get these overpaid blow hards out of a job. I'll work there for half!!! Anyway, I still believe this is the greatest country in the world and can be even better. This President is aloof and beholdin to no one. His agenda is clear. I think he is going to blow it.. big time! Thanks for reading, M. Simms California Mindy Simm on 5/22/2013 3:23:45 PM

Hi Charles, "Scandals"?? Something I would like to share with you, is that I object to the use of the word "Scandal", being used by many news sources, to describe the allegations against the IRS, State Dept, Justice Dept, & Obama administration re: the Targeting of Conservatives, the Benghazi attack & surveillance of the AP & Fox reporter. It sounded wrong to me, & when I looked it up, I confirmed that "Scandal" is a word more properly used to describe wrongdoing of a "Moral" nature. Whereas, each of these issues are investigations of possible actual crimes by our government against it's own people. The use of the word tends to diminish their seriousness... treating them like sleazy tabloid stuff. I think this is evidence that many have succumbed to the idea that we don't expect our elected officials & govt. workers to abide by the law... and this is a dangerous path to be on! We are supposed to be able to rely on our govt. to ENFORCE the law, not act like they are above it. Thx! Laurel Laurel Di Tomaso on 5/22/2013 3:25:14 PM

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