June Squeal Award: A Tax Loophole That Goes All the Way to China

The red ink the U.S. owes Red China is enough to make every American see red.

We are more than $1 trillion in debt to China, which is banking billions of dollars on the interest earned off of this debt.

But folks, it’s worse.

If the communist regime was treated the same as a U.S. citizen, it would be required to pay taxes on the dollars made off of the Treasury bonds our federal government sells to borrow money. But as a result of a three decades old treaty, China is exempt from paying taxes on these profits!

Think about that: We are borrowing money from China to pay China for lending us money, and sweetening the bargain with a tax loophole that literally goes all the way to China.

That makes no sense.

It is part of the mutually beneficial trade relationship between our two nations, which also opens China’s markets to the great agricultural products grown in Iowa.  But even with this preferential tax treatment and a lopsided $345 billion trade deficit, the communist regime continues cheating on our agreements.  

Squeal Award: Communist Party of China

That’s why I am giving my June 2020 Squeal Award to the Communist Party of China for not keeping their end of the deal while benefiting from a tax break bonanza potentially worth billions of dollars every year.

It is also why I am asking the Treasury Department to start calculating and disclosing to taxpayers the true price of our debt to China and other nations, including both the cost of the interest we pay and the revenues lost in a tax loophole. 

Do you have an example of government waste or inefficiencies that I should take a look at? Send me an email by clicking here.

Thank you!