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Forum Post: Corporatocracy and a Call for the Separation of Corporation and State

Posted 2 years ago on March 16, 2012, 7:06 p.m. EST by eyeopen (20) from Burkeville, VA
This content is user submitted and not an official statement

There is a growing awareness in America of the inordinate power of the giant trans-national corporations on our government. There is a sense that these corporations are beyond the rule of law, that their transgressions go unpunished, and that ordinary people are at their mercy. For the first time in decades, people are starting to get fed up and push back. And protests are erupting like brush fires. This past month there were protests against two of these corporations here in Charlottesville, VA and there are bound to be more. I am convinced that if people knew the facts, everyone would be out on the street. Of course, many people realize that corporations are affecting government policy through campaign finance, lobbying, and the phenomenon where industry executives become politicians and then return to industry in a rotating fashion. And then there is the American Legislative Exchange Council. Behind closed doors and without democratic input of the general population, this group writes laws for legislators. Through ALEC, as it is commonly known, global corporations and state politicians meet to try to rewrite state laws. So there are many ways, but are these wealthy corporate interests actively superseding our democracy? Let’s take a look at these two corporations and the facts surrounding them, and you be the judge.

                                          Verizon 2008-2010

• Verizon earned $33.4 billion in pre-tax U.S. income. • Verizon should have paid about $11.4 billion at the statutory federal tax rate of 35% during this three-year period. • Verizon has paid NO federal taxes in the last three years. • Verizon should have paid about $2.3 billion in corporate income taxes at the state level, but paid only $866 million (2.6 % of sum owed). • Verizon actually received $1 billion in rebates from the government, bring the effective tax rate to -2.9 %. • Verizon received a total of $14 billion in federal and state corporate tax subsidies. • Verizon received state and local subsidies in exchange for locating facilities and creating jobs; however, the total number of U. S. employees at Verizon has fallen by more than 20,000. • Verizon has demanded $1 billion in benefit concessions from workers, despite paying no taxes and raking in massive profits. • Verizon executive compensation rose 167% in this period. CEO Ivan Seidenberg received $18.2 million in total compensation in just one year. • Verizon spent $55 million on federal campaign contributions and lobbying, lobbying for over 110 bills in the House and Senate in one year alone. • Verizon has 94 current “revolving door” personnel. • The company has $1.2 billion it keeps offshore to avoid paying taxes.

                                       Bank of America 2007-2010

• BofA is the 9th largest company in the United States by total revenue. • BofA has taken over 13 other financial institutions since the 1990s. • BofA received $1.344 trillion in secret loans made by the Federal Reserve (2007-2010), according to the results of the recent Fed audit as demanded by congress. • BofA received $45 billion bailout from the TARP program (2008-2009). • BofA also got another $5.2 billion bailout with government funds for its deals with AIG (2008). • BofA has paid NO federal taxes for the past two years. • BofA actually received a $1.9 billion tax refund from the IRS, although it made $4.4 billion in profits (2010). • BofA paid $359 million in state and local taxes. • BofA’s net income fell to $4 billion from $14 billion (2008) but banker’s compensation stayed at $18 billion. The CEO’s total compensation was $10 million, while the average bank teller wage was $23,000, according to New York Attorney General’s Office. • BofA spent $14.5 million on political contributions and lobbying in one year (2008). • BofA has 12 current “revolving door” personnel. • BofA has 143 offshore subsidiaries in order to avoid paying taxes. Verizon and Bank of America are both on the corporate board for ALEC. They also share another notable distinction. Both of these behemoths spend millions on lobbying and campaign contributions every year—in fact, more than they pay in taxes. Apparently, that’s money well spent because actually, when you do the math, the returns are amazing. That is probably the most profitable investment these corporations can make. Did you know that one dollar is more than the combined federal income tax liability of Verizon, Bank of America, GE, ExxonMobil, and Citibank together? Even more unbelievable, instead of paying their taxes, they get hundreds of billions of dollars, from OUR taxes, every year through things like subsidies, tax loopholes, offshore tax havens, and rebates. In fact, a study by the Citizens for Tax Justice and the Institute on Taxation and Economic Policy, 70 of 280 S&P 500 companies investigated paid no taxes at all. And then there were the 30 companies that paid less than nothing. Yes, not only did they pay nothing, they received billions in rebates. What is even more shocking is that the two companies that faced protests here in Charlottesville are not extraordinary in any way. Verizon and Bank of America are just 2 of 70. This clearly means the entire system is gamed. Taken all together, there is a damning case for “corporatocracy”.
Corporate tax avoidance schemes are estimated to cost the federal government some $100 billion annually, according to a new study by the Institute for Policy Studies. They also create huge disparities in effective tax rates between big businesses and small. Small businesses pay an average of 27% in federal taxes, the report notes, while big businesses pay just 11% on average. In effect, small businesses are subsidizing big businesses. These giant corporations are literally leaching our economy. They may be too big to fail but we simply cannot afford to keep them. Our economy is collapsing under their weight. This situation is a direct result of the money they spend on our political process and it is affecting our country in ways too numerous to mention. Corporations must stop paying off our politicians and start paying taxes. Just as once it was necessary to make the separation between the power of the church and the power of the state, perhaps now it is time to call for the separation between corporation and state.



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[-] 5 points by bensdad (8977) 2 years ago

The key to EVERYTHING is to erase the rights of corporations to be people.
Most of us do not realize that there are NO laws establishing corporate personhood.
It was all done by brilliant corporate lawyers and activist judges - since 1886 !

Join the NYC OWS Corporations are not People and Money is not Speech Working Group

regular meetings Wednesdays 5:30-7:30PM @ 60 Wall St – The Attrium

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[-] 5 points by RoyerJ101 (18) from Flint, MI 2 years ago

The parts that are most frustrating - the privatization of our energy, the privatization of communications (phone, internet / WiFi), the privatization of our food, the privatization of our schools, the privatization of our capital, the privatization of our health care and the privatization of some municipalities water supply.

All are fundamental rights and should be controlled by democratic vote, not assets to be traded on Wall Street.

Furthermore, along with making huge profits from the privatization of our entitlements. Those very same corporations minimize their input in our countries infrastructure by "dodging" their fundamental tax obligations to the communities that are allowing them to profit.

Meanwhile, if communities had their own non-profit public banks, public internet service providers, public water & sewer services, single-payer (universal health care), and 100% public educational institutions - then a small group of people could not use Wall Street and trade our entitlements to further their cause. Instead, the entire community would have say in how their fundamental rights are distributed, not a group of shareholders and an executive branch.


[-] 4 points by geo (2638) from Concord, NC 2 years ago

I personally don't care how large a company's profit is, it is their right to make money. It is when that profit is used to influence government and negate my vote that they cross the line.

Outlaw special interest lobbying, put on term limits, create effective election reform... through a Constitutional Amendment if necessary.

[-] 3 points by eyeopen (20) from Burkeville, VA 2 years ago

There is a campaign growing around the country on the municipal level to pass resolutions demanding a constitutional amendment to specify that corporations are not people. Join one near you! You can find out more about the campaign at www.resolutionsweek.org.

[-] 2 points by hvncb (24) 2 years ago

You should be a little better informed. The so called 'STATE' (VA) and your supposedly 'UNITED STATES' are corporations....wake up!

[-] 1 points by eyeopen (20) from Burkeville, VA 2 years ago

I hear you : ) I agree. Now go wake everybody else up!

[-] 2 points by BearDickinson (118) from Ewing, VA 2 years ago

Robert Michels and the Iron Law of Oligarchy - administrators and politicians tend to become entrenched - losing sight of why they are there - to serve the will of the people. this is a 2 page research paper from Cornell. To me, this makes a case for TERM LIMITS. The prez is limited to two terms, why are the Senators not limited to 2 terms = 12 years and House of Reps - 3 terms or 6 years ? This would give the better Reps motivation to challenge for Senate seats, ya think ? http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1404&context=articles

[-] 2 points by BearDickinson (118) from Ewing, VA 2 years ago

Just the facts - awesome !

[-] 1 points by ThunderclapNewman (1083) from Nanty Glo, PA 2 years ago

The Citizens United decision is a ruse perpetrated on the most of us to enable the least of us to get a person sympathetic to their corporate agendae into elected office. Corporations get to "speak" TWICE - ONCE AS INDIVIDUALS AND THEN AGAIN AS CORPORATIONS. This HAS to end!

[-] 0 points by BlackSun (275) from Agua León, BC 2 years ago

So why doesn't Obama and his party do something about it?

[-] 4 points by eyeopen (20) from Burkeville, VA 2 years ago

This problem goes beyond the scope of one man. This is a problem the politicians will never take on. It is an issue the people must force. All three branches of our government are seriously compromised by corporate money and influence. This is our job to demand. In fact, if you just focus on one issue- getting the money out of politics- every other issue in our dysfunctional democracy would be manageable.

[-] 1 points by BearDickinson (118) from Ewing, VA 2 years ago

Simply stated and very true !