By Lucy Komisar
Feb 8, 2009
At a time when New York State’s budget is reeling from Wall Street tax losses — Wall Street pays 20 to 30 percent of revenues — you’d think Governor David Paterson would want to recoup all the evaded taxes he could get. That doesn’t seem to be the case when it comes to corporations that launder their profits offshore.
Paterson refused to deal with the issue and instead answered a question I hadn‘t asked. I wonder why. Does that mean he won’t go after corporate tax evaders? Here is the exchange from the Council‘s transcript.
QUESTIONER: Lucy Komisar. I’m a journalist.
There was just a GAO report done, at the request of Senator Levin, that showed that some hundred or more companies, including many of the ones that had gotten bailouts, had a large number of offshore subsidiaries. And we know that a main reason for offshore subsidiaries is to cheat on U.S. taxes.
What are you doing to make sure that the companies in New York are not using offshore subsidiaries to cheat on taxes, now that we so desperately need the money?
PATERSON: Well, I think, this is where we have to be very careful about the original bailout package, the $700 billion, which really vested all control in the Department of the Treasury, not even subject to perusal by the Justice Department.
This had to be a negotiation, because it really is egregious. And what we were doing was, in a sense, what they did in Japan, which was buying up the bad debt of all the banks and financial institutions, not changing any management and allowing them to fritter away resources in reckless schemes that often hurt the American taxpayer.
That has kind of been changed. Ever since Prime Minister Brown decided to recapitalize the financial institutions in Great Britain, it seems to have dawned on the United States. And now with the new administration, we are trying hopefully to be careful. But I think that’s why the president reacted so viscerally to this idea of these firms getting bailout money and then the heads of these firms taking bonuses.
It’s outrageous. Even the company that I referred to before, that New York State helped, the first thing they did, when they got money from the federal government is, they went on a retreat.
I mean, just the goal, just the — you just have to wonder, what is going on in the minds of people who, knowing that we have 2 million Americans who have lost their houses, over the last couple of years, and over 2.5 million Americans who have lost their jobs last year, feel comfortable using resources in the manner that they have?
It is an absolute outrage. And so obviously on the state level, we don’t have direct participation in the bailouts of these companies that the General Accounting Office reported on. But certainly in terms of the stimulus money, we’re going to be very careful as to where it goes.
As a matter of fact, the administration did not want to give block grants to the states, because they weren’t sure what we would do with them.
We don’t have the best reputation for financial management.
But at the same time, there was a desire to put money into resources that would respond immediately. And that’s why the negotiating whether it would be 90 days, 180 days — I think they will settle at about 120 days — for what the shovel-ready projects are. Because now everybody with a shovel says they’re shovel-ready. The reality is, what we need are projects that are ready to go, because I think that there is a psychological stimulus that goes with the economic stimulus. If people see other people going back to work, then I think we will address the fear that so many Americans rightly have at this time.