Opinion

David Cay Johnston

Budget cuts that raise costs

David Cay Johnston
Aug 30, 2011 13:43 UTC

By David Cay Johnston
The opinions expressed are his own.

The Obama administration’s support for killing off the U.S. Statistical Abstract underscores what’s wrong with Washington’s approach to cutting the budget. This nearly thousand-page compendium of official data is in its 130th and evidently last edition since 1878. It is published online and in print.

Taxpayers will save the $2.9 million it costs in a year to compile the data from a multitude of government, academic, nonprofit and industry websites.

But how much time will be wasted hunting for data without this ready reference? How much will state and local taxpayers pay for the extra time reference desk librarians need to answer questions? How many questions will go unanswered? And what of the Statistical Abstract’s value in quickly and efficiently pointing to other sources for a deeper look that spares researchers having to hunt through the vast array of government and private websites?

Corporations, entrepreneurs, researchers and state and local taxpayers will pay much more than what the federal government saves.

It’s a perfect example of what’s wrong with Washington’s approach. The conventional wisdom, a dogma for some, is that federal spending must be cut because government costs more than we can afford.

Wiping out Wisconsin taxes

David Cay Johnston
Aug 26, 2011 21:45 UTC

By David Cay Johnston
The author is a Reuters columnist. The opinions expressed are his own.

The heirs of the SC Johnson fortune, the richest family in Wisconsin with four multi-billionaires according to Forbes, paid not a penny of Wisconsin corporate income tax on profits from their global household products business and two smaller companies from 2000 through 2008, public records show.

The smaller companies made more than $400 million in Wisconsin profit. Indications are the much larger household products firm, which is privately held and does not disclose its profits, netted more than a billion dollars, and possibly many billions.

America is GE’s tax haven

David Cay Johnston
Aug 23, 2011 15:35 UTC

By David Cay Johnston
The author is a Reuters columnist. The opinions expressed are his own.

Washington politicians say high corporate tax rates are driving U.S. companies to invest offshore where tax rates are lower. But that is not General Electric’s experience.

GE’s disclosures show that over the last decade it paid much lower tax rates in America than offshore, just the opposite of the Washington political mantra. Even more puzzling, the U.S. corporate giant chooses to take more of its profits in other lands despite the higher tax rates there.

Macau big for casinos, taxman

David Cay Johnston
Aug 16, 2011 16:34 UTC

By David Cay Johnston
The author is a Reuters columnist. The opinions expressed are his own.

The Lisboa, the oldest casino in this thriving gambling city, features a polished black marble floor flecked with what looks like glittering gold. While all gamblers eventually find only fool’s gold, like the glittering pyrite in the marble floor, government is mining real gold from the casinos here.

Macau, a special administrative region of China, is raking in 8 billion patacas (US$1 billion) a month this year in casino taxes.

Tax gateways to India

David Cay Johnston
Aug 9, 2011 15:19 UTC

By David Cay Johnston
The author is a Reuters columnist. The opinions expressed are his own.

The equatorial island nations of Mauritius and Singapore are competing for the role of preferred gateway for foreign investments into India and other Asian countries.

Think of it as a triangle, not of love, but of lucre.

Companies and rich investors use gateway countries so they can earn profits in such places as India, China and Indonesia.  Favorable tax treaties let them send dividends and other payments to such places as Mauritius and Singapore while paying little or no tax. The United States can even provide such benefits under some of its tax treaties.

Think Singapore is a “low-tax” haven? Think again

Aug 8, 2011 15:54 UTC

In this recent video, David Cay Johnston examines the notion, often heard from U.S. politicians, that Singapore is a model of low taxation:

Forget taxes, it’s wages that plague Americans

David Cay Johnston
Aug 6, 2011 15:01 UTC

By David Cay Johnston
All opinions expressed are his own.

Here is how much economic progress America has made in the 21st Century: the average taxpayer’s 2009 income was at the same level as 1997.

Average 2009 income was $54,283, just $18 more than in 1997 when you adjust for inflation, not that anyone would notice a difference of $1.50 a month in their pocket.

And compared to 2007, the last peak year of the economy, average income fell a painful $8,588 or 13.7 percent in real terms. Having $716 less each month is something most people would notice.

Fact-free fiscal farce

David Cay Johnston
Aug 2, 2011 14:02 UTC

By David Cay Johnston

The author is a Reuters columnist. The opinions expressed are his own.

The Washington debate over whether to voluntarily default on the U.S. government’s obligations revealed a serious political ailment in Congress: mass economic amnesia.

Just 11 years ago, Republicans insisted budget surpluses were bad for the economy, while Democrats told us surpluses would make the economy flourish. Al Gore said pay off the federal debt; George W. Bush said cut taxes so people would have more money.

During the Bush years Democrats decried the red-ink budgets, while Republicans assured us that no real harm would come from a $5 trillion borrow-and-spend spree.

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