President Barack Obama has come out strongly against corporations moving their addresses overseas in an attempt to pay lower taxes – while several of his own donors saved money by employing this very tactic, known as “inversion.” Yet, ABC, CBS and NBC have completely ignored that hypocrisy since the president addressed the issue on July 24.
White House Deputy Press Secretary Eric Schultz told Bloomberg News that even though Obama called such tactics “unpatriotic,” the president would keep cash from donors benefiting from tax inversion.
(video after break)
Inversions are a tactic where companies move their corporate residence to countries with lower tax rates, including locations in Europe, Bermuda and the Cayman Islands, in order to avoid high U.S. corporate taxes – the highest among industrialized nations. This results in less overall tax revenue from corporations, while the businesses themselves can still conduct most of their operations in America.
Obama said in a video statement that companies who practiced inversions were “totally wrong,” and called for Congress to “embrace economic patriotism that says ‘let’s rise or fall together,’ as one nation, and as one people.” Obama also called on corporations to engage in “economic patriotism.”
Although the network he works for ignored the story, ABC correspondent, Jonathan Karl, asked Schultz why the president wouldn’t return contributions from these donors in an Aug. 13, press conference. Karl wanted an answer because “these guys are profiting off the very practice that the president has condemned and wants to see stopped.” Schultz replied that he “would understand the skepticism more if we weren’t doing something to tackle the problem.”
The networks have rarely talked about tax inversions. But when they did, the broadcast news programs said nothing about Obama’s donors utilizing inversions. MRC’s Business and Media Institute looked at all mentions of “tax” on the morning and evening news shows of ABC, CBS and NBC, from the time Obama mentioned inversions on July 24, through the morning of Aug. 20, to see which stories were about inversions.
While CBS “This Morning” covered inversions twice, once on July 25 and once on Aug. 7, in both cases the network failed to mention Obama’s donors. ABC and NBC did not report on the issue at all.
Even in the media, some argued that the reason companies are using tax inversions is the high corporate tax rate. USA Today called on the U.S. to lower corporate taxes in an Aug. 14, editorial. “On one hand, who can blame them?” the editorial asked. “The U.S. rate is the highest in the developed world, and it’s legal to keep the company headquarters and most of the business in the USA but move the corporate address abroad by jumping through some regulatory hoops.”
But not everyone in the media shared that opinion.
On CBS “This Morning” Aug. 7, Mellody Hobson, a prominent Obama donor and wife of Star Wars creator George Lucas, dismissed the idea that high taxes were to blame for the practice, arguing that “you can lower the tax rate, and there’s still going to be another country with a lower rate.”
Obama called Hobson one of his “earliest supporters,” at a White House event in Nov. 2013. That was not mentioned at all during the CBS broadcast that Hobson was an Obama donor.