One of the great (so far) untold stories about the battle for the Senate involves Schumer's very explicit threat to Bernie Sanders to not interfere in primaries against his hand-picked candidates in 4 key states. The threat was loss of a good Senate committee chairmanship in 2017 if Bernie did anything to help progressives against Schumer's Wall Street-friendly picks in Pennsylvania, Florida and Ohio. I saw polling yesterday-- that apparently was also seen by a Huff Po writer last night-- showing that Joe Sestak would be beating Toomey by a higher margin right now if he were the nominee instead of Schumercrat, Katie McGinty, who's in a neck-and-neck race with the odious Pat Toomey. Travis Marketing found that with McGinty ahead of Toomey 46-45%, Sestak would be ahead 48-44% right now. I don't know if Grayson would be beating Rubio now had Schumer not spent millions in Florida on Patrick Murphy's behalf (only to abandon the state as soon as Grayson was "safely" knocked out of the race and I don't know if PG Sittenfeld would be doing better than the flailing and failing Schumercrat Ted Strickland, whose campaign not got off the ground against another GOP boob, Rob Portman. I know for certain that Grayson and Sittenfeld would have run far better and more robust campaigns than either Murphy or Strickland.Over a year ago, Jon Schwarz, writing for The Intercept pointed out a confluence of interests between Schumer and Portman to screw domestic business and regular Americans. "In today’s bitter, poisonous political environment," noted Schwarz, "there’s still one place where Democratic and Republican leaders find common ground: an abiding devotion to multinational corporations." He went on to explain the then just-proposed plan to give "corporations something they’ve always wanted: a so-called 'territorial' tax system in the U.S."
A territorial tax system would only tax U.S.-based multinationals on their profits earned within the United States-- which sounds like it makes sense, except that it’s incredibly easy for big corporations to use financial trickery to sell to a big market like the U.S. but say their profits were earned in another country. Another country that always happens to have a much lower tax rate than here. For instance, in 2010 U.S.-based multinationals claimed that so much of their profits were earned in Bermuda that these profits were 1578 percent the size of Bermuda’s economy.According to the current law, though, U.S.-based corporations are taxed on those profits at U.S. rates if they ever bring these profits back home. So they just leave them overseas-- right now they have about $2.1 trillion stashed in other countries.The Schumer-Portman plan would impose a tax on corporate profits purportedly earned in other countries whether they came back to the U.S. or not. But it would do so at a far lower rate than the current standard corporate tax rate of 35 percent-- President Obama has proposed 14 percent, and while Schumer and Portman haven’t come up with a specific number, Portman says 14 percent is much too high.The obvious consequence if the Schumer-Portman scheme becomes law is that businesses based solely within the U.S. would be at a permanent disadvantage. Multinationals could earn profits in the U.S., get their armies of lawyers and accountants to make these profits appear to have been “earned” in the Cayman Islands, and get taxed at the overseas profit rate. Meanwhile, purely domestic companies would either have to pay the higher domestic rate, or turn into multinationals themselves.There is a much simpler, fairer, more efficient way to run the tax system for international corporations, called “formulary apportionment.” With formulary apportionment, it wouldn’t matter how many subsidiaries and departments corporations had scattered all over the globe, and which “earned” their profits where. Instead, a formula (based on a combination of a corporation’s sales, payroll and capital stock) would determine what proportion of the corporation “belonged” to each country. Then the corporation’s overall profits would be allocated according to that proportion, and the corporation would pay that country’s tax rate on that proportion.This would be good for the U.S. overall, given that we’re a huge market that accounts for a large proportion of most multinationals’ sales. It would be good for domestic business, making it possible to raise the same amount of revenue at a lower corporate tax rate. And it would make companies compete based on who made the better product, not who has the better lawyers and accountants. But it would make it far more difficult for multinational corporations to play governments off each other and evade taxes, so don’t look for it anytime soon.
A Democratic campaign staffer told me this week that this was why Schumer was so rough with Bernie about the Ohio race and why he was adamant that a tough candidate like Sittenfeld be given no oxygen against a weak and doddering Strickland who would have zero chance to beat Portman. Portman has spent $21,341,755 to Strickland's $9,537,702. (As of October 19's FEC reporting deadline Portman had $5,144,370 cash left and Strickland had just a tenth of that, $598,658.) Another $28 million has been spent of behalf of Portman by the NRSC and right-wing allies. The DSCC and it's allies have spent far less than half of that on Strickland and gave up on his race almost instantly after he won the primary against Sittenfeld. The RealClearPolitics polling average shows Portman beating Strickland with a 15.6 point spread, 50.3% to 34.7%. The most recent poll, by Quinnipiac last week, is even worse for Strickland, who Portman is beating 56-38%, an 18 point margin.Maybe the DSCC-- and especially Chuck Schumer-- should get out of the primary business and concentrate on defeating Republicans, not progressive Democrats. This kind of tape drives Schumer insane... and the Democratic Party is made to suffer because of that insanity.