By Pat Oglesby:
I worked for the Joint Congressional Committee on Taxation in Washington, D.C., during a time of loophole closing and base broadening — the Tax Reform Act of 1986. Multinational corporations were beating the system then — moving profits to tax havens to escape tax, to name the top problem. Congress cracked down on the worst abuses, but the multinationals are back at it worse than ever — making a mockery of the tax system. Sound tax policy, I think, would take away U.S. corporations’ “deferral” incentive to operate abroad – and to their ability to claim, via income shifting and transfer pricing, more income came from abroad than they really have. And sound policy would tighten our rules to tax or prevent runaway (expatriating) (“Benedict Arnold”) corporations – past, present, and future. For instance, we could impose worldwide unitary taxation by formula on all multinationals like many states did before the Federal Government stopped them.
But rules of international taxation are so arcane that few can grasp them. An informed democracy would not put up with the puny arguments of the multinationals, like this one: Tax subsidies for a Singaporean subsidiary might cause it to buy stuff, made by American workers, from its U.S. parent corporation. Yes, that argument has a tiny grain of truth, but if you want to encourage jobs, it’s hard to think of a less effective plan. In any event, we Americans put up with the multinationals paying little or no income tax, as do people in the rest of the world. All I can do is laugh. But hey, corporations “been good to me” insofar as I have invested in corporate shares. And thanks to market forces, many of us are living high, with material comfort undreamt of by the wealthiest rulers of yesteryear — from window screens to refrigeration to anesthesia. Make that comfort and luxury: We shall have music wherever we go – and information. Corporations, globalism, and free market capitalism are coming through materialistically — for some of us.
Having renounced the delusion that I could help arrange for the multinationals (or other inordinately wealthy “persons,” natural or Citizens United-certified) to pay what seems a fair amount toward keeping the Republic going, I’ve turned to a new target. Maybe commerce in marijuana is simple enough that shedding light on the revenue options will be useful. (Monopoly is an appealing model, but a tax and regulate model is carrying the day in the USA, thanks to ongoing Federal Prohibition.) It’s strange to put marijuana in the same category as PCP and heroin. Legalization, for those who want it, requires finding a middle ground, and tax is a tool you can adjust and tinker with to get there.
Even if international taxation is beyond us, the people of the United States of America have a chance to figure out marijuana legalization and taxation. Unlike multinationals, ganjapreneurs may not yet dominate the discussion of how the body politic should treat their commercial operations.
Regulatory capture happened long ago with multinationals and international taxation. I’m not saying it hasn’t happened yet for marijuana in Colorado and Washington, with marijuana taxes far below the levels of European cigarette taxes, but as a tax technician, I feel like I can do more good in the tiny pond of marijuana taxation than in the seven seas against the enormously powerful multinationals. Wise men who understand international taxation better than I ever will have seen their wisdom fall on deaf ears. Luke 16:31.
So marijuana taxation is the focus of my thinking these days.