Obama’s Tax Evaders of the Year

President Obama will kick off the new year the same way that he kicked off the old year: by demanding that the wealthy pay their “fair share” in taxes. But while millions of small-business owners, struggling entrepreneurs, inventors and investors brace for a double whammy of fiscal cliff tax hikes and new Obamacare taxes, the class-warrior in chief’s richest pals are getting a pass.

It’s a Golden Pass for liberal millionaires and billionaires who support higher Obama taxes for everyone but themselves. Meet the Democratic tax evaders of the year.

— Google. The left-wing Internet giant provided Silicon Valley’s biggest campaign finance boost to Obama, with individual employee donations supporting the tax-hiking candidate by a ratio of more than 31-to-1. Google rank-and-file workers pitched in some $800,000 to Obama. Google’s CEO Eric Schmidt, Google cofounder Sergey Brin, Chief Legal Officer and Senior Vice President David Drummond, and Google Vice President and Chief Internet Evangelist Vint Cerf are all vocal Obama supporters and top donors.

In December, Google’s Netherlands subsidiary disclosed in a tax filing that it had shifted nearly $10 billion in revenues to a Bermuda shell company. That’s “almost double the total from three years before,” according to Bloomberg News. In response to criticism, Google defended the scheme as a legal response to government incentives. “It’s called capitalism,” Schmidt snarked defiantly.

Wonder what all of Obama’s operatives and media lapdogs who bashed evil, selfish Republican offshore tax havens have to say about that? Cue crickets chirping.

— The Washington Post. Speaking of media lapdogs, this newspaper sanctimoniously supported Obama for president and singled out his support for “revenue (tax) increases.” Its endorsement editorial castigated Mitt Romney for embracing an America “in which an ever-greater share of the nation’s wealth resides with the nation’s wealthy, at a time when inequality already is growing.”

The privileged wealthy barons at The Washington Post, however, increased that inequality at the end of the year when they joined a growing number of companies who are giving 2013 dividends in 2012 to protect investors from paying higher Obama taxes on dividend income. It’s “proof positive,” my friend and guest-blogger Doug Powers noted, “that no matter what happens in the negotiations, the country is definitely going off the irony cliff.”

Bonus irony: The $70 million year-end dividend payment will be a windfall for other “higher taxes for thee, but not for me” Obama supporters, including donor Warren Buffett’s firm Berkshire Hathaway. According to The Associated Press, “Berkshire is its largest shareholder, with an estimated 1.7 million shares, which means it could get a roughly $17 million dividend payment.”

— Costco. The mega-retailer’s co-founder, Jim Sinegal, is a lifelong Democrat and top Obama fundraiser. He crusaded aggressively for Obamacare and sent out a campaign dispatch defending his candidate from criticism over his “you didn’t build that remarks.” But while Sinegal purported to speak for beleaguered small-business owners, his company was availing itself of rarified tax avoidance strategies. Like The Washington Post, the Costco board of directors voted to pay special $7 per share year-end dividends to avoid higher taxes. In addition, Costco will borrow $3.5 billion to finance the payout, according to The Wall Street Journal. Higher taxes, more debt. They built that.

— Facebook. The social networking giant’s founder, Mark Zuckerberg, told Obama in 2011 at a town hall forum that he was “cool” with paying higher taxes. But neither Zuckerberg nor his many Facebook execs are actually down with following through. Co-founder Eduardo Saverin renounced his American citizenship in a blindingly obvious bid to evade nearly $70 million in taxes. In addition, Zuckerberg and a half-dozen Facebook insiders are all skirting hefty estate and gift taxes on their family Facebook shares held in annuity trusts. According to Bloomberg News, the legal maneuver is called a “grantor-retained annuity trust, or GRAT,” and the total Facebook tax avoidance sum adds up to at least $200 million. A “cool” $200 million, that is.

— George Lucas. The billionaire Star Wars director called Obama a “hero” and parroted his candidate’s capitalism-bashing rhetoric in a January 2012 interview with PBS dinosaur Charlie Rose. “I do not believe that the rich should be able to buy the government,” Lucas lectured. He does, however, believe in shirking higher taxes the one-percenter way. In October, Lucas sold his film company to Disney for a whopping $4 billion in cash and stock to evade anticipated capital gains tax increases and Obamacare Medicare surtaxes on investment income.

— Andre “Dr. Dre” Young. Forbes magazine named this California gangsta rapper-turned-music industry mogul the highest-paid musician in the world in 2012. He raked in an estimated $100 million, mostly from sales of his Beats headphone company, along with concert revenue. Dre’s music electronics company was co-founded with Jimmy Iovine, who also founded Dre’s parent record label, Interscope Records. Interscope was funded by “progressive” billionaire Ted Field, heir to the Marshall Field retail empire and one of the nation’s biggest Democratic Party donors.

Dre boosted the careers of prominent Obama hip-hop cheerleaders Eminem and 50 Cent. But overseas, he’s rolling like a Romney supporter. The rap mogul is now using a County Cork, Ireland, tax haven to protect his global headphones empire subsidiaries and avoid high U.S. corporate tax rates. The Irish Examiner newspaper explained that the elaborate structuring “allows for money to be (channeled) between the separate companies in the form of royalty payments or (license) fees to artificially but legitimately reduce profits as a means of reducing tax liabilities.”

To paraphrase Dre and his Obama-endorsing rap partner Snoop Dogg: Ain’t nuthin’ but an E thang. Elitism. Exemptions. Evasion.

  • artlouis

    Early in my career as a business journalist, I learned that there is a huge difference between tax “evaders” and tax “avoiders.” The first group belongs in jail, the second group is just taking advantage of the law as written. None of the cases cited in this article appears to be tax evasion.

    The Dems were trying to make Romney out to be a tax cheat during the
    campaign, because he used various sophisticated legal ploys to “avoid” higher
    taxes. Let’s not play their game, Michelle.

    • sjangers

      With due respect, Art, I think this may be a legitimate application of a double standard by conservatives.

      When conservative politicians and public figures are involved in morals scandals, for example, they often pay a higher price than others for that sort of behavior. That’s because they have failed to measure up to the standards they have used for their own political gain (to enhance their personal image, at least). That seems fair.

      While I get your point about the distinction between tax evasion and tax avoidance, I don’t think it’s unreasonable to hold President Obama and his supporters to the higher standard they attempted to use against their political opponents when they fail to achieve these standards themselves.

      They’ve attempted to hold their political opponents up to public ridicule, hinting at criminality, when those people use legitimate means to reduce their tax burden. If you publically hold someone to such a standard, you, at the very least, should be expected to hold yourself to the same standard or suffer the consequences (perhaps those you’ve already set, or higher) for your failure.

      They certainly shouldn’t be charged as tax evaders, but they should suffer the same degree of public opprobrium as tax evaders because of the double standard they have been using for their own benefit.

      • artlouis

        sjangers,

        I see your point too, and it is persuasive. I wish Michelle had avoided the word “evaders” and argued exactly as you did. She left an opening for her critics on the Left.

      • http://www.facebook.com/walter.mattson.39 Walter Mattson

        I agree with most of your article except the 2nd paragraph. In it you claim that republicans should pay a higher price but why should they? After all Obama is the real pro here. In Burt’s article below he identifies Obama as saying one thing and the next thing he says the exact opposite without any criticism from the media. Thus it is the media which should be the real hypocrites since they perform their jobs by omission of any faults by the liberals.

  • Switchlight13

    Wonder how little multi millionaire Valerie Jarrett pays in taxes, after all, she’s running the country.