CBS Anti-Tax Haven Segment Omits Reason for Their Purpose: High U.S. Taxes

Perhaps CBS was looking for a way to channel populist anger away from Barack Obama’s mortgage bailout plan and toward against bailed out banks. Why else would a reporter detail how so-called “tax havens” help financial institutions avoid some taxes, without explaining how high those taxes are.

A report by CBS correspondent Sharyl Attkisson on the Feb. 23 “CBS Evening News” took a look at how these tax havens work – in locations outside the jurisdiction of the federal government, making them not liable for U.S. taxes.

“They’re exotic and far-away places, known to tourists for coral reefs and sandy beaches, but known to the business world as tax havens with strict bank secrecy and privacy laws, where U.S. companies can pay fewer taxes and help wealthy customers avoid taxes too,” Attkisson said. “And guess who’s turned up in a new government report about tax havens – 11 giant recipients of your bailout tax dollars.”

 Attkisson named the large bailed out Wall Street firms with offshore operations, calling their tax savings a “cost” to U.S. taxpayers. But Attkisson might have noted that, in the present circumstances, the money a firm doesn’t pay in taxes is money it doesn’t need from tax payers.

“Together they’ve collected more than $227 billion, from Citigroup to Morgan Stanley,” Attkisson said. “Even as they benefit from the tax money, they operate hundreds of subsidiaries in places widely known for helping people evade taxes. Although proponents say most business and tax havens are perfectly legal and legitimate, it’s estimated tax havens cost U.S. taxpayers $100 billion a year in lost revenue.”

Attkisson singled out the Cayman Islands, “where there’s no income tax, no corporate tax, no capital-gains tax.” However, she neglected to point out how high those taxes are in the United States. The United States has the second highest corporate tax rate in the world and a capital-gains tax rate that President Barack Obama had threatened to hike during his presidential campaign.

However, Attkisson couldn’t avoid reporting that business is still awfully good in these “tax havens.”

“Whatever the case, the next time you’re reminded the U.S. economy is in shambles, remember there are places where business is still booming, where some bailed out companies are getting your tax dollars and maybe helping others pay less,” Attkisson said.

While Attkisson’s report was undoubtedly designed to outrage, viewers could take away another, more productive lesson: that the place with struggling economy – the United States, could learn from the Cayman Islands with their low taxes and “booming” business. Bottom line: Low taxes attract investment.