SCHULTZ: Welcome back to THE ED SHOW.
We've talked about economic fairness on this show. And thanks to the
re-election of President Obama, tax rates on the top 1 percent finally went
back to the Clinton rates of 39.6 percent.
Now, Senator Bernie Sanders of Vermont is taking action to bring
fairness to huge corporations not paying their fair share.
This is what the election was about.
The story always starts with the vulture chart, doesn`t it? Because
it shows huge income inequality between wage earners in the top 1 percent
over the past 30 years. There`s a huge difference.
Income disparity won`t be fixed overnight, but at least the top 1
percent are back to paying the Clinton tax rate since President Obama won
the fiscal cliff fight.
Now, the other part of this is the corporations. The effective
corporate tax rate has been declining for decades. About 25 percent of
large corporations paid no federal income taxes in at least one of the last
five years. Is that fair? Big question mark.
The effective tax rate for corporations is low because of loopholes
encouraging corporations to do what? Keep their profits offshore. Less
tax revenue for huge corporations hurts our economy. You want more
revenue? Here`s your bill.
It`s a matter of economic patriotism to ask corporations to pay their
fair share after they`re making their money on our soil. This is the
picture of the Ugland House. You know what it is? It`s a small office
building in the Cayman Islands which many companies use as their mailing
address, even though their operations are located primarily in the good old
United States of America.
This is yet another way to claim a tax break, and it`s a tax break
these corporations should never be getting in a fair society. So there`s a
lot of talk about more revenue. Every Democrat should be on board with
Let`s turn to Senator Bernie Sanders of Vermont.
Senator, great to have you with us tonight. Appreciate your time.
SEN. BERNIE SANDERS (I), VERMONT: Good to be with you, Ed.
SCHULTZ: Your bill tackles a number of issues, a number of problems.
Explain how the corporations are keeping profits offshore for us and how
it`s actually hurting the economy and what your bill would do to change all
SANDERS: Ed, the debate right now in Congress is whether or not we
cut Social Security, Medicare, Medicaid, and other enormously important
programs for the middle class. That`s what the Republicans want.
What some of us want is to say wait a second, as you've just
indicated, one out of four profitable corporations pays nothing in taxes.
Corporations in terms of their profits now, their rate is at 12 percent,
the lowest since 1972. Compared to Europe, our corporate contribution to
the tax revenue is the lowest of any major country on Earth.
So the question is how do we deal with that? And one way we deal with
that is we say that it is absurd for large corporations to be able to stash
huge amounts of money in countries like the Cayman Islands, which have a
zero tax rate.
They have no real presence there at all. All they have is a mailbox.
And that building that you just showed has 18,000 corporations.
It is a sham. It`s a farce. We've got to end that. Corporations
cannot put their profits there.
SCHULTZ: Senator, this is an election issue. This is what we just
had a big conversation in this country about.
In your bill, I understand, will raise $590 billion in revenue over
the next decade. And it does this without double taxation. Take us down
SANDERS: What it means right now is you have corporations who instead
of paying an American tax rate of 35 percent are paying zero. And then you
have an incredibly complex, manipulative system which allows them to deduct
the taxes that they pay in other low-tax countries like Ireland.
So what we are saying, if you`re an American corporation, if you`re
proud of being American, if you want to sell your products to America you
have to pay your fair share of taxes and cannot behind some -- cannot hide
behind some phony postal box in the Cayman Islands.
Furthermore, furthermore, this is a jobs issue, not just a tax issue.
SCHULTZ: Sure, it is.
SANDERS: Because what we`re doing is encouraging corporations to move
their manufacturing plants, their offices to other countries where the tax
rates are much lower.
SCHULTZ: Well, you know, when President Obama says we need more
revenue, I mean, this is the remedy. This is what this is all about. And
this is what you have introduced.
I`m glad you've done it. And it really is -- I think it warrants the
support openly of the White House.
I mean, how else are you going to get more revenue into the Treasury?
Other than this avenue?
SANDERS: Well, what concerns me, Ed, is -- you asked the right
question. What the White House is saying, yes, we want tax reform, we want
to look at these issues, but we want to do it in a deficit-neutral way so
that we will lower tax rates and eliminate these loopholes. To my mind
just this one piece of legislation, which I think is a sensible piece of
legislation, support I believe by the vast majority of the people in this
country, could bring in all by itself close to $600 billion in a 10-year
The choice as Americans that we face -- do you cut programs that the
middle class and working people desperately need or do you ask finally
large corporations who have gotten away with murder for years to start
paying their fair share?
SCHULTZ: You know, even if we weren`t looking at cuts at the big
three, this is still terribly wrong. There`s still no fairness in this
game whatsoever. And they have lobbyists have gamed this all the way to
the floor of the Senate. And there`s no question that it needs to be
changed. And if this election was about change and if it`s about fairness
for the middle class, I would expect every progressive group and every
Democrat and the president to get on board big-time on this.
Senator Sanders --
SANDERS: You`re absolutely right. I would only add that revenue
today at 15.7 percent of GDP is the lowest that it`s been in 60 years. We
need revenue. This is one way to do it.
SCHULTZ: Senator Sanders, good to have you with us tonight. Thanks
SANDERS: Thank you.