Awash In Record Profits, Corporations Shift Even More To Offshore Tax Havens

Even as American corporations are raking in record profits, the largest among them are shifting larger amounts of money away from the United States and into offshore tax havens that allow them to pad their bottom lines even more, according to multiple analyses of legal filings made since the beginning of 2013.

The Wall Street Journal found that the 60 largest companies moved $166 billion offshore in 2012, shielding 40 percent of their earnings from American taxes and costing the U.S. billions in lost revenue:

The amount of money at stake is significant, particularly when the U.S. budget deficit is high on the political agenda. Just 19 of the 60 companies in the Journal’s survey disclose the tax hit they could face if they brought the money back to their U.S. parent. Those companies say they might have to pay $98 billion in additional tax—more than the $85 billion in automatic-spending cuts triggered this month after the White House and Congress couldn’t agree on an alternative.

A similar analysis from Bloomberg found that 83 of the largest American companies moved $183 billion overseas in 2012, bringing the total offshore to $1.46 trillion for those 83 companies alone. Most of the companies, like Apple, Microsoft, and Yahoo, have set up subsidiaries in low-tax countries like Bermuda, Ireland, and the Cayman Islands specifically to receive tax benefits. That has ramifications for states, which lost $42 billion in revenue to corporate tax dodging in the last three years alone, and taxpayers and small businesses, who often have to pick up the tab.

And while the debate over corporate tax reform has flared again in Washington, the favorite reform of Republicans and corporate lobbying groups would only exacerbate the problem, making it easier for corporations to push even more money overseas at the expense of revenue and investment that could be made in the United States.

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In Shift, NY Times Embraces 'Moral Dimension' Provided by Bishops -- at Least for Expanding Obama-Care

Friday's lead New York Times story celebrated "G.O.P. Governors Providing a Lift For Health Law." The most notable convert: Florida Gov. Rick Scott, who reversed his position this week and announced his support for expanding Medicaid.

The Times' Abby Goodnough and Robert Pear credited Scott for the embrace of Obama-care (via "proponents" who "say that doing so will not only save lives, but also create jobs and stimulate the economy") and also found a convenient "moral dimension" in the call by Catholic bishops to expand the Medicaid program, a dimension the paper never found when the Church was opposing the Obama-care requirement that religion institutions provide contraception coverage.

Under pressure from the health care industry and consumer advocates, seven Republican governors are cautiously moving to expand Medicaid, giving an unexpected boost to President Obama’s plan to insure some 30 million more Americans.

The Supreme Court ruled last year that expanding Medicaid to include many more low-income people was an option under the new federal health care law, not a requirement, tossing the decision to the states and touching off battles in many capitols.

The federal government will pay the entire cost of covering newly eligible beneficiaries from 2014 to 2016, and 90 percent or more later. But many Republican governors and lawmakers immediately questioned whether that commitment would last, and whether increased spending on Medicaid makes sense, given the size of the federal budget deficit. Some flatly declared they would not consider it.

In Florida, where Gov. Rick Scott reversed his position and on Wednesday announced his support for expanding Medicaid, proponents say that doing so will not only save lives, but also create jobs and stimulate the economy. Similar arguments have swayed the Republican governors of Arizona, Michigan, Nevada, New Mexico, North Dakota and Ohio, who in recent months have announced their intention to expand Medicaid.

A left-wing supporter of Obama-care was merely titled a "consumer group."

The shift has delighted supporters of the law.

“I think this means the dominoes are falling,” said Ronald F. Pollack, the executive director of Families USA, a consumer group. “The message is, ‘Even though I may not have supported and even strongly opposed the Affordable Care Act, it would be harmful to the citizens of my state if I didn’t opt into taking these very substantial federal dollars to help people who truly need it.’ ”

And the Times conveniently discovered how the Roman Catholic bishops "have added a moral dimension to the campaign" in support of Medicaid expansion.

Religious leaders have added a moral dimension to the campaign in some states. The Roman Catholic bishops of Salt Lake City and Little Rock, Ark., for example, have urged state officials to expand Medicaid.

Oddly, the paper only finds that "moral dimension" when the bishops come out in favor of liberal causes, not when the "moral dimension" involves rejecting the administration's requirement that religion institutions provide contraception coverage.

The last use of the term in a story on Catholic bishops used it in the context of the bishops pushing left-wing issues like "economic inequality" -- "Bishops Open 'Religious Liberty' Drive" on November 15, 2011 (Note the suspicion-arousing quote marks.) Religion reporter Laurie Goodstein even took care to differentiate the "moral dimension" of left-wing causes from the Church's apparently less-admirable traditional opposition to abortion and homosexuality.

The bishops are struggling to reclaim the role they played in the 1980s and into the ’90s as a nationally recognized voice on the moral dimension of public policy issues like economic inequality, workers’ rights, immigration and nuclear weapons proliferation. Since then, however, they have reordered their priorities, with abortion and homosexuality eclipsing poverty and economic injustice.

Clay Waters is the director of Times Watch, an MRC project tracking the New York Times. Click here to follow Clay Waters on Twitter.

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States Worry About Rate Shock During Shift To New Health Law

Health and Human Services Secretary Kathleen Sebelius and Illinois Gov. Pat Quinn announce conditional federal approval of the state's plan for a health insurance exchange under the new healthcare law. Even states that back the law are worried about an initial rate jump in some premiums. (Scott Olson / Getty Images / February 18, 2013)

WASHINGTON — Less than a year before Americans will be required to have insurance under President Obama's healthcare law, many of its backers are growing increasingly anxious that premiums could jump, driven up by the legislation itself.

Higher premiums could undermine a core promise of the Affordable Care Act: to make basic health protections available to all Americans for the first time. Major rate increases also threaten to cause a backlash just as the law is supposed to deliver many key benefits Obama promised when he signed it in 2010.

"The single biggest issue we face now is affordability," said Jill Zorn, senior program officer at the Universal Health Care Foundation of Connecticut, a consumer advocacy group that championed the new law.

Administration officials have consistently downplayed the specter of rate increases and other disruptions as millions of Americans move into overhauled insurance markets in 2014. They cite provisions in the law that they say will hold down premiums, including new competitive markets they believe will make insurers offer competitive rates.

Exactly how high the premiums may go won't be known until later this year. But already, officials in states that support the law have sounded warnings that some people — mostly those who are young and do not receive coverage through their work — may see considerably higher prices than expected.

That is because of new requirements in the law aimed at making insurance more comprehensive and more affordable for older, sicker consumers.

Insurance regulators in California, which has enthusiastically embraced the law, cautioned the Obama administration in a recent letter about "rate and market disruption."

Oregon's insurance commissioner, another supporter of the law, said new regulations could push up premiums for young customers by as much as 30% next year. He urged administration officials to slow enactment of the new rules.

A leading advocate for consumers in their 20s, Young Invincibles, sounded a similar caution, suggesting in a letter to administration officials that additional steps may be needed to protect young people from rising premiums. Young Invincibles mobilized in 2010 to help pass the healthcare law.

And regulators in Massachusetts, which was the model for Obama's law, recently warned that although many residents and small businesses in the state "will see premium decreases next year, a significant number will see extreme premium increases."

The law does include many new protections for consumers. Even those now sounding alarms emphasize the importance of those provisions, including guaranteed coverage for Americans with preexisting medical conditions.

"For most people, this will be a dramatic improvement," Zorn said.

The new law also is designed to make insurance more affordable for many consumers. Millions of Americans who make less than four times the federal poverty level — or about $92,000 for a family of four — will qualify for federal subsidies to offset the cost of their premiums if they don't get insurance through employers.

But these new protections and benefits — largely intended for Americans who do not get health coverage through their employers — also threaten to drive up costs.

Next year, there will be new limits on how much insurers can charge older consumers. Insurers will be banned from charging more to women or people with illnesses.

The industry will have to offer plans that cover a new basic set of benefits, including prescription drugs, mental health, pediatric dental care and other services. And insurers will be prohibited from placing annual or lifetime limits on coverage.

The nonpartisan Congressional Budget Office estimates that insurance premiums for those who buy coverage on their own probably will be 10% to 13% higher in 2016, in large part because health plans will be much more comprehensive. Many consumers will probably pay less, however, because of the subsidies available in the law.

The healthcare law also includes a new tax and new fees on insurance companies that the industry says it will pass on to consumers.

The provision that will prevent insurance companies from charging older consumers more than three times what they charge young consumers has generated particular concern among regulators. In many states, insurers now can charge five times as much or more to people in their 50s and 60s.

The requirement was a top priority of the influential AARP. It is designed to make insurance more affordable to a group that often most needs insurance. But as rates come down for older people, they may increase for consumers in their 20s, regulators worry.

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