Posted 6 years ago on March 16, 2012, 7:06 p.m. EST by eyeopen
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 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.