[Congressional Record (Bound Edition), Volume 149 (2003), Part 1]
[Senate]
[Pages 467-468]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         CORPORATE TAX DODGERS

  Mr. DAYTON. Mr. President, the President announced a tax proposal 
last week. I call it ``Leave No Millionaire Behind.'' He expressed his 
concern about the double taxation of corporate profits in America. I 
wish he would devote equal concern about the nontaxation of corporate 
profits in this country. It is estimated that now less than half of 
corporate profits are taxed at all. Through various tax and accounting 
gimmicks, some of the very profitable companies in this country not 
only have no tax liability whatsoever, they receive multimillion-dollar 
refunds from the American taxpayer.
  Take CSX, for example, a company headed by the President's nominee 
for Secretary of Treasury, Mr. John Snow. For the last 4 years, CSX 
reported U.S. profits of $934 billion. It paid, in American taxes, 
zero. It received rebates, in fact, from the American Treasury of $164 
billion.
  Let me repeat that. CSX earned $934 billion in profits on its 
American operations, paid zero taxes to the American Treasury, and 
received a $164 billion refund from the American taxpayer.
  I would say that is ``compassionate conservatism,'' but it is 
certainly not double taxation. It is no taxation. And it is a big 
winner, increasingly so, on Wall Street. It is a reason that corporate 
income tax in this country has been a declining share of the Federal 
tax revenues over the last decades.
  In 1960, corporate taxes amounted to 23 percent of Federal revenues. 
In 1970, that dropped to 18 percent; in 1980, 14 percent; last year, 
10.5 percent. In other words, the corporate income tax share of Federal 
Government revenue is one-half of what it was 40 years ago.
  There used to be an ethic in this country that business, being an 
integral part of the communities in which they operated, drew their 
lifeblood from the people of this country and from its democratic and 
capitalist structures, and that they had an obligation to give 
something back. But no longer.
  The modern version of John Kennedy's inaugural refrain, ``Ask not 
what your country can do for you; ask what you can do for your 
country,'' has become, in corporate America, ``Ask what your country 
can do for you and what you can avoid doing for your country.''
  One of the most obvious and disgraceful tax avoidance schemes is the 
growing practice of some American companies of setting up sham 
corporate headquarters offshore in places such as Bermuda or the Cayman 
Islands. These tax-free havens permit the total avoidance of taxes for 
foreign operations and, in some cases, from domestic operations as 
well.
  It is bad enough that profitable U.S. corporations can essentially 
renounce their U.S. corporate citizenship, but some of them continue to 
secure very large and lucrative contracts with our Federal Government, 
some even in the areas of national defense and homeland security. 
Evidently, they see nothing wrong with profiting off the U.S. 
Government and then avoiding paying taxes, even on those profits to 
support our very own Government.
  One partner in Ernst & Young said recently: ``A lot of companies feel 
that the improvement in earnings is powerful enough so that maybe the 
patriotism issue should take a back seat.''
  That is why last summer my colleague, Senator Paul Wellstone, amended 
the 2002 Defense appropriations bill to bar such corporate tax dodgers 
from being awarded Government defense contracts. Then he successfully 
amended the homeland security bill to bar those companies from getting 
contracts with the new Department of Homeland Security. Both amendments 
passed on the Senate floor by voice votes, seemingly unanimously.
  However, after the November election, after Paul's tragic death, the 
final version of the homeland security bill gutted the Wellstone 
amendment. Whereas Paul's amendment permitted only the President to 
grant a waiver upon certification to the Congress that would be 
necessary for national security, the corporate callboys snuck in 
language that allowed the Secretary of Homeland Security to grant 
waivers for national security or for economic benefits.
  Who could argue that tax-free Government contracts are not to 
someone's economic benefit? It seems if that corporate someone is big 
enough and rich enough to know who to call in Washington, and to pay 
$1,000 an hour for what is euphemistically here called ``Government 
relations,'' there is no doubt that the waiver would be granted. In 
other words, Paul Wellstone's legacy is going to be obliterated by 
waves of waivers, which is why we need more Paul Wellstones in 
Washington.
  So, last week, to honor Paul's memory, to try to reclaim part of his 
legacy, I introduced the Senator Paul

[[Page 468]]

Wellstone Corporate Patriotism Act that reinstates the Wellstone 
amendment to the Homeland Security Act. It says that corporations that 
have renounced their American citizenship and moved offshore to avoid 
paying taxes to the U.S. Government will not get business contracts 
with the U.S. Government, at least not with homeland security projects.
  It is the least we can do for Paul Wellstone. It is the least we 
should do for ourselves because most U.S. companies, like most American 
citizens, are law abiding, patriotic, and responsible. Nobody likes 
paying taxes. Americans have been anti taxes since the colonial days, 
since the Boston Tea Party, since the rallying cry of, ``Taxation 
without representation is tyranny.''
  Taxes are necessary for this country's survival, however. We have 
increased military spending by 23 percent in the last 2 years on a 
bipartisan basis, which the President requested. We have evidence that 
new efforts in homeland security will cost an additional $37 billion. 
Operation Enduring Freedom in Afghanistan, the military buildup in the 
neighborhood of Iraq--all of these depend upon Americans paying taxes 
and everyone paying their fair share of taxes. When someone avoids 
paying their fair share, everyone else pays a higher unfair share. We 
need to reestablish an ethic in this country that tax avoidance is 
unpatriotic, un-American; tax avoidance is selfish, greedy, and an 
insult to this Nation.
  Tax exemption, especially for the wealthy, whether they be dividends 
or estates--those tax exemptions not based on the inability to pay for 
social benefits such as charitable negotiation are betrayals of our 
democracy. They betray the American promise of better lives for 
everyone by all of us working together, by joining together, by 
pledging together, as our forefathers did, our lives, our fortunes, and 
our sacred honor.
  This country won't work if we don't work together. This country won't 
thrive if the richest citizens avoid paying taxes and profitable 
companies put profits before patriotism. More is never enough. It is 
time for the American elite to say they have enough--more than enough. 
I urge you, don't break America with your selfishness or your greed. 
Pay your fair share for America. Do so willingly, proudly, and 
patriotically. I say to the corporate expatriots of America, come home.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Utah is recognized.
  Mr. BENNETT. Mr. President, are we in a period of morning business?
  The PRESIDING OFFICER. Yes.
  Mr. BENNETT. What is the time limit?
  The PRESIDING OFFICER. Ten minutes.
  Mr. BENNETT. I ask unanimous consent that I be allowed to speak for 
20 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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