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Published on Monday, July 11, 2011 by CommonDreams.org
Corporate Tax Escapees and You
The all-consuming Washington, D.C. wrangling over debts and deficits, spending and taxing is excluding a large reality of how these financial problems can sensibly and fairly be addressed. These blinders in Congress and the White House come from fact-starved ideologies--mostly from the Republicans--and fear-fed meekness--mostly from the Democrats. Both are furiously dialing for commercial campaign cash.
Take the gigantic world of corporate tax avoidance. Ronald Reagan signed the Tax Reform Act of 1986 that was designed to increase corporate tax revenues by over 30 percent. Today, President Obama wants to diminish or delete some tax loopholes (technically called tax expenditures) for large corporations, but let most of the revenues be cancelled out by lowering the corporate tax rates. How the world changes.
Obama's mild approach is unacceptable to the big business lobbies and their Republican mascots in Congress.
They want more tax breaks so they can keep trillions of more dollars over the next decade.
Lost in this whirl of vast greed and political calculation are options, which if pursued with a sense of fairness for the people of the country, would go a long way in providing revenues for public works jobs--repairing America--which in turn would generate more consumer demand by these workers.
The ultra-accurate Citizens for Tax Justice (CTJ) publishes precise reports on the effective taxes paid by corporations that make an utter mockery of the 35 percent statutory tax rate for corporations (see CTJ.org).
On June 1, 2011, CTJ released a preview of its forthcoming study of Fortune 500 companies and "the taxes they paid--or failed to pay--over the 2008-2010 period." Judging by the preview, this report should silence those who say that the U.S. taxes corporations more than other industrialized nations.
What do you think the following profitable corporations paid in actual total federal income taxes in that period: American Electric Power, Boeing, Dupont, Exxon Mobil, FedEx, General Electric, Honeywell, International, IBM, United Technologies, Verizon Communications, Wells Fargo, and Yahoo? Nothing!
CTJ reports that "from 2008 through 2010, these 12 companies reported $171 billion in pretax U.S. profits. But as a group, their federal income taxes were negative: $2.5 billion."
CTJ documents that "not a single one of the companies paid anything close to the 35 percent statutory tax rate. In fact, the 'highest tax' company on our list, ExxonMobil, paid an effective three-year tax rate of only 14.2 percent...and over the past two years, Exxon Mobil's net tax on its $9.9 billion in U.S. pretax profits was a minuscule $39 million, an effective tax rate of 0.4 percent."
Next time you hear Republicans like Eric Cantor, John Boehner and Mitch McConnell repeat their statement that corporations are overtaxed and need a break, you can tell them that "had these 12 companies paid the full 35 percent corporate tax, their federal income taxes over the three years would have totaled $59.9 billion." CTJ director, Bob McIntyre noted that these 12 companies are "just the tip of an iceberg of widespread corporate tax avoidance."
Of course, most Americans suspect as much, even if they don't have the exact figures. A recent Gallup poll asked the public's opinion on where they stand on the tax cuts for the rich and the tax breaks for the corporations. By a 45% margin, they opposed tax cuts for the rich and by a 55% margin, they opposed tax cuts for corporations.
So what are Barack Obama and the Democrats waiting for? They have the undeniable facts and overwhelming public sentiment behind them. Why do they let Cantor, Boehner and McConnell continue to mouth falsehoods without rebuttals of the truth?
It's obvious. The Democrats want big time money from the executives and Political Action Committees of the Fortune 500. The Democrats are willing to let the Republicans fuzz the debate and dare to try and make Medicare and social security benefits absorb the sacrifices. Indeed last week, the Washington Post headlined Obama signaling to the Republicans that social security "is on the table."
Even the meek reporters should no longer fail to challenge the Republican's daily mantras.
Should you have any doubts that the corporate state is in firm control of your government, try this test: If you paid a single dollar in federal income tax in any of the years 2008, 2009 and 2010, you paid more than the giant General Electric (GE) company. In that period GE made $7.722 billion in U.S. profit, paid no taxes and received $4.737 billion from the IRS. As the New York Times reported on March 24, teams of GE tax lawyers and accountants are making sure they avoid taxes altogether, shifting the burden to you.
These big companies are laughing at us all the way to the taxpayer-bailed-out banks. They're even laughing at their own shareholder-owners. The non-financial companies are sitting on about $2 trillion. Inert dollars, producing nothing and earning minuscule interest are better deployed by enlarging the dividend payments to their shareholders. A mere 10% of that sum as dividend payments this year would pump $200 billion into an economy needing more consumer demand.
Reporters and columnists need to start addressing these topics at news conferences with members of Congress and White House staffers. The Washington press corps shouldn't behave like sheep!
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23 Comments so far
Show AllWhen are the super-rich going to save us?
Donchaknow?? All those tax breaks and loopholes, and the accompanying austerity measures against everyday Americans, will "trickle down" to the rest of us. Didn't you know that the rich and the huge corporations always take all that extra $$ and "invest it in the economy?"
Why wouldn't the "Washington press Corps behave like sheep" when most of them are paid by the very tax avoiding companies that you cited in your article, Ralph ?
Yesterday Obama proposed including tax reform in the debt ceiling deal, meaning that these corporate tax avoiders will get ever larger rebates from those of us who pay taxes. These corporate tax avoiders are not going to allow the reporters they own to jeopardize the opportunity for the deficit deal to add tax breaks for the uber wealthy while cutting Social Security, Medicare and other popular programs.
They're saving our children to be cheap field hands. The rest of us are being abandoned.
"When are the super-rich going to save us?"
Answer: In our fantasies. When Ralph's book came out - "Only the Surper Rich Can Save Us" - I was delighted. Obviously written tongue in cheek, Ralph seems to be saying: Forget the dim passengers on the duopoly's band wagon. I'll test the heart strings of the wealthy! Can't hurt.
Now Thomas Frank must write a new book entitled: What's the Matter With DC?
Starving retirees paid far more. This can only lead to a bloody revolution.
Obama's drones will make sure the "revolution" is stopped dead in its tracks.
It will never happen. 45 percent and 55 percent means that there are 55/45 percent of stupid people out there that don't want those taxes. Reading sites in the Great Land of Stupid People in Utah, they think those that don't pay their taxes need them to pay us. Try telling them that most of the people they are paying are not Americans and you get shouted down. Way too many people take $Lipballs and B$ck and $Savage at their word. Most people gladly pay tithes to the already rich churches.
You can't fix stupid.
Err, Joe notsocool. I understand that this reading comprehension thingie is tough for some, like you apparently. I will re-post the paragraph in question so you can read it slowly with moving lips. If you still don't get it ask an adult:
"Of course, most Americans suspect as much, even if they don't have the exact figures. A recent Gallup poll asked the public's opinion on where they stand on the tax cuts for the rich and the tax breaks for the corporations. By a 45% MARGIN, they opposed tax cuts for the rich and by a 55% MARGIN, they opposed tax cuts for corporations."
Caps added to help you out.
Hmmm, where do they get all that money? Do we just hand it over, no questions asked? And if it's not enough they borrow more and we pay for that too. This debt ceiling debate is just another parlor game. The players are the winners; the rest of us are the losers.There is only one IMHO exit strategy. Take your cards off the table and let them play with each other. Pretty scary for most. How will I play if I don't pay? My mortgage!? My health insurance!? My child's education!? Gotcha, gotcha, gotcha. It's like if there was a 9.3 earthquake we all run and hide in the nearest glass highrise. Alas
Dear tireless Ralph Nader who is a real public servant...
I have a question: Since the Federal Reserve (from which the money to run the government is borrowed) is a private corporation not a government bank, to whom, exactly, is the 'national debt' owed?
The US government issues bonds, called Treasury Bonds or T-Bills. Other countries buy these bonds with their surplus dollars. China has a bunch as does many, many other countries. Stiffing them would not go over well and that would be the end of the US dollar as the world's reserve currency driving the dollar down until it's on a par with something like the Indonesian Rupiah, which used to be between 9 and 10,000 to the dollar, now at 8,500.
Ralph, you are my president.
Hey CD,
Where is Hedges column from today? What's with the snuff?
-BProgress
Thanks, again, Ralph.
One thing that never gets added to the Republican success story is that they have been getting what they want for years by our engagement in all these wars. Republicans have already spent their share and they chose to spend it on war. No Democrat wants their taxes going towards war but that's where it's been going. It's never enough for the Republicans though. Now it's our turn. They are just bluffing the Democrats into thinking we have to grab more of our future security before they raise the debt ceiling. I bet that's bunkum. Obama should call their bluff. There is no way in the world Republicans have any intention of not raising the debt ceiling because they fully understand the catastrophic effects it would have on their living standards too (and that's all they care about folks!) They again are just playing chicken with the Democrats. Obama ought to tell them they have their wars, now keep their dirty hands off Social Security and Medicare as well as all the other programs they are licking their chops about. This could be Obama's Cuban Missile Crisis stand off of sorts. It would make the Republicans look dumb and for a change throw them for a loop, witnessing Obama have a tantrum instead of them. They just wouldn't know how to deal with it. Fun.
total tax revenue collected by u.s. government...
(source: congressional budget office... office of management and budget)...
fiscal year 2008... $2.5 trillion...
fiscal year 2009... $2.1 trillion...
fiscal year 2010... $2.16 trillion... of which...
... 42 % came from individual income taxes...
... 40 % came from social security/social insurance taxes...
... 9 % came from corporate taxes...
... plus other tax revenues including excise... estate... and gift taxes...
Thank you! Post this far and wide.
Someone table all the #s in the article and post them far and wide too.
The wishful thinking of the old guard is meaningless today. We're going down slow and "nothing" stops the harm that government spews. Corporate raiders are storming our cities and states with a relentless barage of lies and propaganda and the population is swallowing it whole. There is nothing to suggest that this trend will do anything but accelerate. Irrational behavior is now commonplace. The idea of mitigation is non-existant. Deception has moved from a political tact to an overwhelming reality. We are living a manufactured lie.
I heard on CSPAN a proposal from the Dems, for a bill similar to the Tax Reform Act of 1986 -- a fabulous reform that zeroed in on investment income (capital gains, interest, dividends) and "Passive Income" (rents, royalties, limited partnerships and all sorts of tax shelters), limited the Alt Min Tax and made a terrific increase in revenue from exactly the right people. I was a CPA all during that era and wrote software programs for Ernst & Young producing tax returns for those years. It was "the right stuff" and we need that now.
These are the same people who will have an "I don't understand" look on their faces as they are led to the gallows by hoards of starving, impoverished peasants.
That would be fine, but those hoards will more likely be crushed like the Palestinians.
Mr. Nader,
When our Constitution was adopted there were no political partys in the US. As things have turned out the Democrats and Republicans have had a joint monopoly on our politics for well over a century. This has not worked well for the people.
Many of the big campaign contributors are donating to the canditates of both major parties causing there to be very little difference between them. While they deny it, many congeresssmen vote in the best interest of their big campaign donors rather than the in the interest of "We the People." Every day the gap between the have's and the have-not's grows wider.
Over the years you have done a great service for our Country. I think the best thing you could do now is to become a spokesman for the effort to adopt a Constitutional Amendment that restricts campaign donors to being registered voters (no corporate donors, no pac donors, no union donors, no foreign donors), and that places a reasonable cap on the size a political contribution can be. If Congress must depend on the voters for its campaign money, the welfare of the people would be its main focus, rather than the donor whales like the big banks. Of course both major parties will resist an amendment similar to the one proposed because it would likely destroy the monopoly they now have, and the media will fight it because there will be less political money to spend on advertising.
Good luck Mr. Nader. You have done a lot. Keep it up.