President's Column - The gift that keeps on giving

The assault on the American taxpayer by Corporate America seems endless. Congress in its infinite wisdom has granted huge tax breaks to corporations just because they are. In addition, the Corporation who operates off shore obtains even bigger tax breaks. Now, to add insult to injury, The World Trade Organization ruled that the European Union could impose $4 billion in trade sanctions against the United States. This is a figure 20 times higher than any sanction in the past---because of the tax breaks given to U. S. Corporations operating abroad.

This cost, if paid, would be passed on to the taxpayer. The "foreign sales corporations" systems lets companies with a foreign presence, such as Boeing CO. and Microsoft Corp., to exempt between 15 percent and 30 percent of their export income from U.S. taxes. By doing that, the price of their goods are lowered and more competitive than foreign rivals.

Last year, the WTO ruled that it constituted an illegal subsidy. The tax break, coupled with a second benefit, not challenged by the European Union, is expected to save u. S. companies an estimated $4.8 billion this year. An WTO arbitrator ruled that the European Union was entitled to impose as much as $4 billion a year in trade sanctions, to make up for European business lost because of the U. S. law. Washington had claimed the figure should be less than $1 billion.

A question would arise - Does the United States make the same such claims for foreign corporations that operate in America? The irony of this corporate giveaway is that it appears that the American taxpayers pays for the original tax break and then would have to pay the European union monies for the lost business in their market by the companies which gave the tax breaks to and for. This is truly a gift that keeps on giving, and giving ... and giving...