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Pay Up, Corporate Tax Dodgers
We're chumps unless we force Congress to stop tax haven abuse.
Instead of cutting state and federal budgets, the United States should crack down on the corporate tax dodgers thumbing their noses at us.
Across the nation, states are making deep cuts that will wreck the quality of life for everyone to close budget gaps that total more than $100 billion.
But there's a more sensible option. Overseas tax havens enable companies to pretend their profits are earned in other countries like the Cayman Islands. Simply making that ruse illegal would bring home an estimated $100 billion a year.
The next time you read a story about some politician bemoaning that "there's no money" and "we have to make cuts," just point to artful tax dodgers in our midst.
They include some of the banks that trashed the economy but gladly took our tax dollars to stay alive after the economic meltdown. Bank of America. Wells Fargo. Citigroup.
Goldman Sachs took a $10 billion taxpayer bailout but then gamed its effective tax rate down to one percent through what its shakedown-artist executives call "changes in geographic earnings mix." Shame on them. Pay up.
See that FedEx delivery van go by on the roads you paid for? Pay up FedEx! Don't pretend you're not making billions in the U.S. Don't lie and tell us you made all those profits on some island with more palm trees than people. We know the demand for coconut delivery isn't that big.
These corporations are heavy users of our taxpayer funded public infrastructure and property rights protection systems. They use our regulated marketplace, call upon our law enforcement system and judiciary to remedy disputes. They're protected by U.S. police forces and firefighters. They enjoy all the privileges and benefits of tax-paying citizens. They just don't pay their fair share for them.
So, ExxonMobil: the next time your gas station erupts in flames, why don't you call the fire department on the Cayman Islands? Or when someone holds up the joint, how about calling the Luxembourg police, since that's where you claim your profits so you don't have to pay the taxes you owe Uncle Sam.
Hey, Pfizer. Without our remarkable taxpayer-funded system of patents and intellectual property rights protections, everyone and their brother would be making Viagra and undercutting your sales of little blue pills. Pay up!
Those of us who pay sales taxes and have income taxes withheld from our paychecks will bear the brunt of state and federal budget cuts in schools, public transportation, and recreational facilities. Our most vulnerable family members and neighbors will suffer thanks to cuts in mental health services, elder care, and Medicaid.
Oh yes, and children. Arizona is cutting health care for 47,000 children. California, New York, and Mississippi are cutting K-12 education funding. Hey, kids don't vote. Nor do they have corporate lobbyists. An estimated 900,000 jobs will be cut, including teachers, firefighters, police officers, and medical first responders.
Boeing, you want another contract for a taxpayer-funded military jet? Well, pay up! Pay up General Electric, Mattel, Dow Chemical, Hewlett-Packard, and Cisco. Yes, we know you pay some taxes. But look these children who are losing their health insurance and teaching aides in the eye. Tell them you're paying your fair share.
These global corporations will complain that forcing them to pay their fair share of taxes will "kill jobs." Let's be clear: the patriotic businesses that currently pay their taxes and have to compete against these tax dodgers are the employers we want. It undercuts U.S. jobs for domestic banks, retailers, and manufacturers to have to compete against companies that can game the tax system.
The next time you're waiting longer for a bus or train than you should, or someone you know can't get timely mental health or drug treatment services, remember the tax dodgers. The next time your car hits a pothole or your kid's teacher loses her job, remember the corporations that are using armies of accountants to lower their tax bills.
In a democracy, if we sit back and just grumble, we get what we deserve. We're chumps until we wake up and force our members of Congress to stop tax haven abuse.
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46 Comments so far
Show AllTo reiterate what others have suggested: Since our pals at the SCOTUS declared that corporations are people, it follows that the corporations should pay the same tax rates as people do. No more tax breaks for advertising, depreciation of equipment, lobbying fees, you get the idea.
Let the greedy-rich corporations pay the same taxes as you and I do.
Exactly. I don't understand how corporations can be humans, but don't have to pay taxes like the rest of us humans. Or how creating a legal entity to protect someone from liabilities makes a new human being. It doesn't, and it can't.
But that being what it is, I say we start taxing those corporations EXACTLY like they were people. Which means that they pay something other than making $18 BILLION in profits and getting a $133 million tax REFUND like Exxon did last year. Yeah, they pay a decent amount in taxes, but that is to the rest of the world, NOT us.
Tax them like they were humans. NO loopholes. If they are going to screw us then I think we should at least get SOMETHING out of it.
In 1970 corporations paid 29% of US income taxes. In 2009 they paid 6%.
Six months ago I would have told you that by 2020 corporations will pay 0% of US income tax.
After watching Obama' extend the Bush tax cuts, and hearing Obama's promise to "simplify" income tax filing and cut corporate taxes, you can bet your last nickle that corporations will pay no income taxes by the time Obama moves out of the white house (2017 at the latest, not 2020).
Should unions, who were also treated as "persons" under Citizens United, be taxed on the basis of dues received?
Sir, I believe unions are more in the nature of "employee advocates", therefore the dues paid to them are like insurance payments, not corporate earnings. The unions are not really separate entities or corporations, but are populated by the members who pay dues into them.
The U.S. Supreme Court in Citizens United treated both corporations and unions as "persons" entitled to first amendment protection in connection with electioneering advertisements. You have a point that dues are gross revenues, not net revenues, but that only goes to the base on which taxation might be levied.
INCOME TAX:
If a union embarks on a profit-seeking venture and profits from that activity, the union should pay income taxes.
PROPERTY TAX:
Although many states and cities in America give corporations property tax breaks on land and buildings they own, I have never heard of a state or city giving any union a property tax break on the land and buildings they own. When it comes to property taxes, unions pay more than corporations.
Hold on there,,, This is Amerika , you know if the rich corporations had
to pay taxes they would not be able to build industry and give us more great
jobs.. Hold on to that kool aid cup america you know that the Obomber knows
best..
SUPPORT THE EMPIRE SEND YOUR NEIGHBORS KIDS
These GOP corporations claim they are small businesses and get tax dollars!
You gotta watch one of Keith O's last great reports!
http://www.youtube.com/watch?v=boIdGIrPVVw
Excellent points. However, if corporate taxes are raised won't they just pass them on to the buyer or make up the difference by cutting workers? They should contribute a fair share but, realistically, I'm not sure how that's done.
One suggestion I read in an article or post yesterday was to institute a transaction tax for the stock market. With millions of shares changing hands a nominal fee could add up. People don't seem to miss the fees charged by pharmacy benefits administrators on each prescription claim so I don't see why a stock market transaction fee couldn't work the same way.
You can write into the tax code that these costs are NOT to be passed on to the customer, as had been done DECADES ago before Reagan screwed everything up. In fact, before Reagan, business paid 36% of ALL taxes paid in this country. Now, after the breaks, cuts and corruption in the system, they pay about 8%, and it's going DOWN.
But you know, if business were only keeping the jobs here and leaving wages at a decent level, we would have enough money to allow us to pay the increases, should business try to tack them onto prices. If we were still allowed to work for a decent, living wage, that wouldn't be NEAR the problem that business and their accumulated wealth are now. And don't kid yourself, the biggest problems that we have in this country now, are directly CAUSED by the rich and their accumulated wealth and undue power.
The fallacy that higher taxes will be passed on to buyers is the tripe the corporations and their co-conspirators in government want us to believe. In fact, the corporations (or any seller of goods) will have priced their products at the maximum that the market will allow. If taxes or any other expenses increase, the seller will either take less profit or stop producing the product together.
Your suggestion of a transactional tax on security is a wonderful idea. Now we need to replace the government with people who are not bought-off by the greedy-rich and their corporations.
Unfortunately many Americans that I know have expressed dismay that corporations will pass the cost of taxes on to the consumer.
I tell them that the cost of taxes is only passed on to those who chose to purchase a good or service from the respective corporation, whereas we all pay higher taxes to offset corporate tax breaks, irrespective of whether we ever buy anything from the corporations getting the breaks.
BOYCOTT is the only tool we have.
Dasani bottled water-made by Coke, bromated tap water
Hemlock, drunk in cups.
Transaction taxes do not directly affect the issuer; they nick those who buy and sell the issuer's shares, in the public markets or otherwise. A large proportion of the sellers and buyers are institutiona investors -- union pension funds, corporate pension funds, mutual funds and others that represent millions of small investors.
Transaction taxes, unless applied uniformly on a global basis, basically cause trading to shift to markets with no transaction taxes. When Sweden and Norway imposed a 1% transaction taxe on share trading -- in the 1970s, think -- the bulk of trading in Swedish and Norwegian stocks shifted to London, and has remained there ever since even though Sweden and Norway, realizing their mistake, later abolished the transaction taxes.
"When Sweden and Norway imposed a 1% transaction taxe on share trading -- in the 1970s, think -- the bulk of trading in Swedish and Norwegian stocks shifted to London,"
So, it might not generate the expected revenue but could have the ironic effect of sending Wall Street off-shore. That would be poetic justice.
Not going to happen. The rich split off some of their ill gotten gains and use it to fund the crooked pols that give them even more tax breaks and so on and so forth, you get the picture.
Now there's a really intellectual response supported by facts and analysis.
The question whether corporate taxation is progressive or regressive requires a complex analysis. See, e.g., http://www.csmonitor.com/Business/Tax-VOX/2010/0222/Is-the-corporate-tax-progressive.
:
"The heart of the progressivity question is the issue of corporate tax incidence. That is, who really pays the corporate tax? While a corporate officer may sign the check to the IRS, the money to pay the bill either comes from workers or capital owners (or both). Conventional wisdom among economists is that the corporate tax is regressive if it leads to lower wages and progressive if it leads to lower returns to capital."
A few things are clear: (i) to the extent the corporate tax is passed on to consumers in the form of higher prices (which will be likely if it is imposed on all competitors in a given economic sector), it will likely be regressive since, in the main, wealthy people spend a lower proportion of their incomes on goods and services than do non-wealthy people; the wealthy save and invest more; (ii) a high corporate tax is a disincentive to do business in the high-tax jurisdiction and as a result, incentivizes companies to become multinational and to move their operations and jobs to low-tax (and low wage) jurisdictions; but (iii) to the extent the corporate tax in fact diminishes shareholder wealth, it will be more progressive than regressive, but it will hurt pensioners, mutual fund shareholders and others as well and may actually hurt them more than the truly wealthy since they have less wealth to cushion the blow and the wealthy may be able to shelter their income from taxation in various ways.
Standard corpowhore garbage. The tax will come out of share price, since competition will ensure that prices cannot rise beyond a certain point. And this is perfectly reasonable. If you own shares, you have to pay the tax.
No. The company pays the tax, not the shareholders. Whether the tax diminishes shareholder equity or is passed along to consumers is a question of how the market in the goods and services the corporation sells works. If you reduce a company's expenses, it can afford to cut prices to increase sales (assuming the demand for its products or services is elastic, a cut in price should result in an increase in sales); the reverse is also true--if you increase a company's expenses, whether taxes or labor costs, it may well have to increase prices and if all its competitors are faced with the same taxes prices will likely rise to the point where revenues are maximized (bearing in mind that elasticity of demand will act as a brake on price increases).
Quit talking theory and rhetoric folks...just look at the last century of American history and you will find that adjusted for inflation wages were highest when corporate taxes were highest.
Evidence trumps theory and rhetoric !
Post hoc propter hoc?
Caterpillar Tractor...another example.
Exports to a "tax haven" country for a loss on its U.S. accounting books and the resells the goods exported from that "tax haven" country for a profit...disgusting!
Early Warning music
Les McCann and Eddied Harris - Compared to What
http://www.youtube.com/watch?v=MzvlivbptXk
Corporations are getting all the tax breaks in the world, they are not paying anywhere near their fair share and they are firing workers, off shoring their factories, hiring illegal aliens and hiring H1b visa people. The corporations have all kinds of tax abatements and sweetheart deals with the states but they still are paying crappy wages with no benefits and banning unions from their premises. On paper, US corporations supposedly are paying the highest tax rate in the world which is total BS. I thought the tax rates in western Europe were the highest. US corporations need to be heavily taxed and regulated; what are they going to do, move more factories to China? Ha, ha, ha, they do that any how, they will continue to move factories to China and other developing countries even if they pay no taxes whatsoever. Giving these giant multinational corporations tax breaks and tax havens has left this country in an economic meltdown and is impoverishing the working class. Trickle down doesn't work for working class people but is great for the super rich. Oh wait, I forget, the rich and the CEO class are more deserving than we ordinary mortals.
". Simply making that ruse illegal would bring home an estimated $100 billion a year."
A good start. What about the other $900 billion required to balance the budget?
Raise the tax rate on the upper tax brackets. Introduce a wealth tax on assets over 10 million , shut down the CIA and the DHS end the wars overseas and cut military spending to 100 billion a year.
Easy. This will leave a considerable surplus.
Absolute Rubbish. Canada is in the top 20 Military spenders in the World and has borders with only one nation.
The USA has NEVER PAID for our defense. Look at a map and tell me who a threat to invade.....Libya?
Nor does the USA "protect" Western Europe from anyone.
It a convenient pacifier for the ill informed who are being screwed up the backside by the MIC to believe such twaddle. It JINGOISM not supported by any FACTS.
". Look at a map and tell me who a threat to invade.....Libya?"
I don't know man, how about the northern part, when all that ice thaws Canada has about 15 real ships (frigates and destroyers) to patrol that. Plus, all the northern territories where it needs to conduct sovereignty patrols to actually keep those territories Canadian. Things in the real world as not as simple as they look from our living room.
The only country that is a threat to Invade is the United States of America. Canada and the rest of the WORLD could cut its military spending if it were not for the trillion plus a year the US spends.
Russia has problems holding on to its own vast territories without seeking more which is why it pulled out of East Europe and gave up on the Stans.
The only country to regularly violate the sovereignity of others over the past 50 years is the USA.
Not China..
Not Russia...
And there no other nation in the world that covets those territories.
The U.S. federal government does not have constitutional power to impose a tax on wealth. States and municipalities have broader power and impose taxes on, e.g., real estate and in some states boats and airplanes. The sixteenth amendment to the U.S. Constitution was designed to overrule a U.S. Supreme Court decision that the federal government could not tax income, and it does that, but it does not extend to taxing wealth. The "death" tax (i.e., estate tax) is a tax on wealth transfer, which has been equated to "income" for the recipients. The sixteenth amendment provides as follows:
"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."
See http://en.wikipedia.org/wiki/Sixteenth_Amendment_to_the_United_States_Constitution
Yes, yes, yes! This is what US Uncut is all about: see http://www.usuncut.org.
Bank of America was this week's target. Stay tuned; more will follow.
While we're at it, and talking about Boeing, why not cut Pentagon Inc. I mean a real cut, not one of those fake Gates cuts, which is no more than a tiny decrease of a planned increase. It's bottom line that counts: it goes up in spite of this so-called cut. (George Orwell, where are you?) See Andrew Becevich: http://www.tomdispatch.com/post/175347/tomgram%3A_andrew_bacevich,_pentagon,_inc./
Yes, yes, yes! This is what US Uncut is all about: see http://www.usuncut.org.
Bank of America was this week's target. Stay tuned; more will follow.
While we're at it, and talking about Boeing, why not cut Pentagon Inc. I mean a real cut, not one of those fake Gates cuts, which is no more than a tiny decrease of a planned increase. It's bottom line that counts: it goes up in spite of this so-called cut. (George Orwell, where are you?) See Andrew Becevich: http://www.tomdispatch.com/post/175347/tomgram%3A_andrew_bacevich,_pentagon,_inc./
Yes, yes, yes! This is what US Uncut is all about: see http://www.usuncut.org.
Bank of America was this week's target. Stay tuned; more will follow.
While we're at it, and talking about Boeing, why not cut Pentagon Inc. I mean a real cut, not one of those fake Gates cuts, which is no more than a tiny decrease of a planned increase. It's bottom line that counts: it goes up in spite of this so-called cut. (George Orwell, where are you?) See Andrew Becevich: http://www.tomdispatch.com/post/175347/tomgram%3A_andrew_bacevich,_pentagon,_inc./
Dear Hearts! Where-oh-where is a link for a petition? This thing would catch on like a house on fire and sweep the country. This is precisesly what I've been saying for years and years, and is one (of several) solutions that would aid our economy and ease our citizens' financial burdens. Besides, didn't the Supreme Court rule that corporations were "Persons"? Isn't corporate profit the same as our "taxable income"?
The Bankers run the economy for their own benefit. Lawyers create the cover by designing the ploys and tricks they use,then become legislators and judges to carry out the deception. Their lies and deceptions are hidden by thousands and thousands of pages of laws and regulations,written by them for them. The laws and regulations of the US contain so many words they could not be read in many many lifetimes. Do you really believe that they can't write a tax code that does not contain the so called loopholes that they use to enrich themselves and impoverish us? Do you really believe that it is constitutional for federal agencies or lobbyist's to write the laws or regulation than become part the UCC or USC? The government of the people by the people for the people as been taken from us over the last one hundred years little by little by lies and deception and hidden in thousands of unconstitutional laws and regulations. Every dollar of income tax collected is payed to the federal reserve bank a private corporation owned by the elite banking families of America and Europe to pay for interest on the US debt. How did it come to be that we all pay a tax to European bankers? Educate yourself. Research, President Wilson, Federal Reserve, The Bar, US bankruptcy, USC, UCC, CAFR, The American Law Institute. Knowledge is power. Turn off the TV, educate yourself before it's to late. The hyper-ambitious super greedy bankers cannot control their lust for wealth and power and will lead us all to our destruction!
How can poor little me actually have more cash in my wallet right now than the combined taxes to be paid this year by Bank of America, General Electric and who knows how many other mega-corporations?
Something is seriously wrong with this picture...that or I need to incorporate in the Cayman Islands like they do and pay nothing. Perhaps we should all form personal corporations there.
Has anyone who is posting here ever seen the tax return of any of the corporations that Collins is asking to "pay up?" Does anyone know for a fact that those corporations really don't pay taxes or is it just something that people have read about and that has thus become the truth? Be honest.
The chump author is the one calling for complaints/support toward congress, to enable the Treasury to collect offshore. Chump author, do you really think congress is going to majically changed their direction and somehow 'make a law' targeting business?
Don't hold your breath waiting for action.
Does the chump author know there is a Republican leader currently? The chump author better know that it is the executive branch that is responsible for investigation, collection, & prosecution for tax liabilities. So if the chump author thinks clamoring to congress will produce action, then therefore clamoring to the executive branch to do its job should also produce said action.
And I would ordinarily never use the author's name calling tactic of 'chump', except when said #$^%&* author actually tries to blame the citizenry for not being forceful enough.
Now down to reality in congress this year...the Republicans will have a show down on 'the federal debt limit' which is currently around 14 &1/2 trillion/ year...the Republicans will be expecting to raise said debt limit... that is the Republican direction. The Republicans & Democrats could care less about off shore stuff, THEY WANT TO INCREASE THE DEBT LIMIT. Just like congress did in a 'small way' in 2008 when congress opened The Treasury limit, to unlimited. During 2011 in another 'small way' congress will expect to 'fix' the debt limit. This will be suggested by the FSOC 'to avoid government default' as a primary excuse, The FSOC now tells congress what law to make, not the citizenry.
Think I'm full of it? try searching: republican debt limit
whocares;)
I love joethevoter's comment:
"How can poor little me actually have more cash in my wallet right now than the combined taxes to be paid this year by Bank of America, General Electric and who knows how many other mega-corporations?
"Something is seriously wrong with this picture...that or I need to incorporate in the Cayman Islands like they do and pay nothing. Perhaps we should all form personal corporations there."
I've thought about this idea for a few years. A couple of years ago I proposed this idea to a CPA---that I should incorporate myself as a 501(c)(3) or (2) legal entity of which I would be the titular Chair whatever the legal moniker. She discouraged the idea. I suspect it was a novel idea to her.
Then there is the question, Should I call myself a "for-profit" or a "non-profit" or a Foundation, or a Collective, etc.?
The idea of changing the legal basis of the individual to mirror the corporate model really is quite interesting. After all, if via the SCOTUS "Citizens United" decision, corporations have the Free Speech rights granted by the First Amendment to the people, then human beings ought likewise have the right to act as corporations, including all their rights granted over the years by the sacred Commerce Clause. Else humans are relegated to an inferior status, something never intended by the Founding Fathers, who never mentioned corporations.
Yes, we do engage in social networking, but this idea of incorporating the individual, as individual, somehow resonates. (Actually, many professionals come close to this in medical and dental and law practice, as in "Limited Liability Corporation.")
And note that such entities probably have more bankruptcy protection than ordinary working Americans with a mortgage. Which is underwater anyway...
Why should you have fewer rights than a fiction? Or, do you consider yourself a lesser fiction?
*****
And, oh, Horace, the City of London DOES impose a transactions tax... Meanwhile, your sometimes erudition on such issues amazes me given your nuttier postings. Playing Devil's Advocate, are we?
-30-
Vis-a-vis the "stamp" duty imposed in the U.K.: this is what gave rise to "contracts for differences", through which people routinely piggyback on the dealers' exemption from stamp and avoid paying the tax.