Forum Post: Thirteen Facts About America's Tax-Dodging Corporations
Posted 10 years ago on June 29, 2013, 3:57 p.m. EST by LeoYo
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Thirteen Facts About America's Tax-Dodging Corporations
Saturday, 29 June 2013 10:51 By Richard Eskow, Campaign for America's Future | Op-Ed
http://truth-out.org/opinion/item/17279-thirteen-facts-about-americas-tax-dodging-corporations
A judicious writer avoids adjectives like “mindblowing,” especially when covering political or economic issues. But no other word seems to describe the stunning reality of corporate taxation in modern America, which cries out for the italics-heavy, exclamation-point-driven format made famous by Ripley’s Believe It or Not.
Stylistic overkill? Read these thirteen facts and you may change your mind.
1._We’re told we can’t “afford” full Social Security benefits, even though closing corporate tax-haven loopholes would pay for Obama’s “chained CPI” benefit cut more than ten times over! Abusive offshore tax havens cost the US $150 billion in lost tax revenue every year (via FACT Coalition). That’s $1.5 trillion over the next ten years.
The “chained CPI” cut, proposed by President Obama and supported by Republicans, is projected to “save” a total of $122 billion to $130 billion over the same time period by denying benefits to seniors and disabled people.
It’s true. “Serious” politicians and pundits are demanding that ordinary people sacrifice earned benefits, while at the same time allowing corporations to avoid more than ten times as much in taxes.
2._Corporate tax rates are near their 60-year low, even though profits are at a 60-year high!
Need we say more?
(Source: Americans for Tax Fairness.)
3._Wells Fargo got $8 billion in tax breaks, even as executives at its subsidiary Wachovia avoided indictment for laundering money for the Mexican drug cartels!
That’s right. Wells Fargo paid a negative tax rate of -1.4 percent between 2008 and 2010 while Wachovia, a Wells Fargo subsidiary, admitted to laundering more than $378 billion for Mexican drug gangs.
We’re talking about crazed killers like “El Loco” and gangs like “Los Zetas” – gangs who cut people’s heads off and toss them out onto disco dance floors or display them in the town square.
Wachovia bankers ignored repeated warnings from law enforcement officials, and continued to launder money for cartels that have murdered tens of thousands.
And yet no criminal indictments were handed down because, as a Senate investigator told Bloomberg News, “”There’s no capacity to regulate or punish them because they’re too big to be threatened with failure.”
4._Some other huge corporations paid less than nothing, too.
Pepco Holdings (-57.6% tax rate)
General Electric (-45.3%)
DuPont (-3.4%)
Verizon (-2.9%)
Boeing (-1.8%)
Honeywell (-0.7%)
(Source: Citizens for Tax Justice)
5._The amount of money US corporations are holding offshore is an estimated one trillion dollars!
Rather than tax these profits the way other countries do, corporate politicians are promoting a tax “repatriation” break that would let corporations “bring this money home” while paying even less than their currently low rates.
They tried that in 2004 and it didn’t create any jobs. In fact, corporations took the tax break and then fired thousands of people. What “repatriation” did do is line a lot of wealthy investors’ pockets. So, naturally, they want to do it again.
6._One building in the Cayman Islands is the official location of 18,857 corporations!
According to the Government Accountability Office, a five-story building called “Ugland House” is home to nearly twenty thousand corporations. That’s impressive, especially for such a small edifice. (Perhaps it has supernatural half-floors and space-time defying “mind tunnels” like the office in Being John Malkovich.) While impressive, Ugland House’s distinction pales next to that of 1209 North Orange Street in Wilmington, Delaware. According to one investigation, that address is home to 217,000 corporations. That’s because Delaware has very generous tax rules – and, as a result, is home to more than half of all the corporate subsidiaries in the United States.That’s startling, since only 1/342th of the nation’s population lives in that state (917,092 residents, out of a national total of 313,914,040, according to the latest census results).
7._Conservatives complain about the “official” corporate tax rate in this country, but corporations actually pay roughly one-third of the official rate in actual taxes.
The official, or “statutory,” corporate tax rate is 35 percent. But the actual rate paid by American corporations is only 12 percent, less than that paid by many middle-class Americans.
(Source: The FACT Coalition.)
In fact, US Corporations pay less tax as a percentage of the GDP than corporations in Canada. Or Japan … … or South Korea. Or Norway. Or Luxembourg, New Zealand, Israel, the Czech Republic, Sweden, Belgium, Switzerland, the United Kingdom, Denmark, Finland, and Italy.
(Source: OECD StatsExtract interactive database.)
8._Corporations used to pay 30 percent of Federal taxes, and now they pay less than 7 percent!
That’s because the corporate tax rate has plunged since Dwight D. Eisenhower was President and is now the lowest it’s been in modern history.
(Source: FACT Coalition.)
9._Big corporations paid $216 million to Congress and got $223 billion in tax breaks!
As Citizens for Tax Justice and USPIRG reported, 280 large and profitable corporations contributed $216 million to Congressional campaigns over four election cycles and got nearly a quarter of a trillion dollars in tax breaks.
That’s a terrific investment for them – a return of more than a thousand to one – but it’s a bad deal for the American people.
10._We don’t even know who owns some corporations, even though that makes it easier to evade taxes, dodge creditors, avoid paying alimony or child support, and even fund terrorism!
Here are some examples of investments that might represent a terror threat. Corporate interests are blocking disclosure rules that would help protect our national security.
11._Bank of America committed foreclosure fraud, was bailed out by the government, and then paid no taxes on $4.4 billion in profit! That’s right. In 2010, while BofA was negotiating a sweet settlement deal for its foreclosure fraud, it paid nothing in taxes. (Source: FACT Coalition.) Zero, on $17.2 billion in offshore earnings. (Source: Americans for Tax Fairness.)
Its $4.1 billion tax break came on the heels of the bank’s taxpayer-funded bailout, immunity from prosecution for its criminal employees, and a cushy government settlement for its foreclosure fraud.
Now David Dayen reports that the bank has apparently continued to defraud customers in violation of its government settlement. Whistleblowers have stated in affidavits that they were “told to lie” to customers, continued to deceive homeowners before foreclosing on them, and flipped customers to new servicing companies to invalidate previous homeowner agreements.
12._What they call “tax reform” would actually prevent our elected representatives from giving businesses financial incentives to improve our lives!
The word “reform” is an honorable one that’s been put to some dishonorable uses lately. “Entitlement reform,” for example, is merely a euphemism for gutting Social Security and Medicare.
Similarly, corporate-backed politicians are pushing a formula for permanent corporate tax breaks and calling it “tax reform.” They insist their “reform” be “revenue neutral” and say it will “broaden the base while lowering the rate.”
Here’s an English translation: The current, unsustainably low rates for corporations would be made permanent, while eliminating many tax deductions in the name of “simplification.”
Here’s what that really means: The domestic tax credit for creating jobs? Gone. Tax breaks for protecting the environment with clean energy, rather than harming other people’s health and leaving a mess for the rest of us to clean up? Gone.
All in all we’d lose dozens of important policies that make our lives better, while permanently fixing corporate taxes at today’s cushy giveaway rates.
“Reform”? Ripoff is more like it.
13._Despite their greed, mismanagement, and freeloading, tax-dodging corporations are using shell organizations like “Fix the Debt” and “the Committee for a Responsible Federal Budget” to tell ordinary Americans they have to sacrifice even more to preserve corporate wealth!
These organizations are using the heads of failed banks – people like Chase’s Jamie Dimon and Lloyd Blankfein of Goldman Sachs – to dispense “advice on the economy.” That’s like getting navigation tips from the captain of the Exxon Valdez.
(Tax breaks for Exxon Mobil: $4.1 billion between 2008 and 2010. The company paid no taxes at all in 2009.)
These executives and their paid spokespeople tell the rest of us we need to “sacrifice” and “tighten our belts” so that their party can go on forever. And too often they’re treated as credible sources, rather than as corrupting influences on our public life.
It’s all true – and there are many more astonishing facts to be found in the world of corporate taxation. To fix the economy more people will need to learn about them – and demand that they be changed. The writer and analyst in me wants to apologize for all the italicizing and all those exclamation points. But the American citizen in me wants to shout the truth out for all the world to hear – believe it or not!
This piece was reprinted by Truthout with permission or license.
Capitalism's "One-Track Mind" for Profits
Saturday, 29 June 2013 00:00 By Jacinda Chan, Truthout | News Analysis
http://truth-out.org/news/item/17230-more-neoliberal-profit-driven-policies-proposed-during-obamas-trip-to-costa-rica
In May, following a visit to President Nieto of Mexico, President Obama stopped in Costa Rica for the first time. Obama met with Costa Rican President Laura Chinchilla and attended the Central America Integration System as an observing member. His mission: to address the drug trafficking problem in Central America, which is often used as a transit route between South America and the US.
Obama asserted that Latin American governments must work towards alleviating poverty, to reduce the gang activity that facilitates drug trafficking. In his address in Costa Rica, Obama addressed the issue of development in Central America, including the improvement of infrastructure and the increase in trade and foreign investment. But he didn't say a thing about the ways in which neoliberal policies have fueled widespread poverty and unrest.
These policies have continually favored oligarchic elites: American businesses and all seven [1] Central American countries would increase the profits of the wealthy few. All seven of these Central American countries are ruled by wealthy conservatives, including El Salvador (President Funes) and Nicaragua (President Ortega), who nonetheless rely on wealthy conservatives for electoral votes. Without proper institutions to regulate where profits from trade and foreign investment go, elite oligarchies will stay in power and increase profits from foreign investments and trade while neglecting the poor and increasing poverty. Without a significant redirection of resources toward impoverished communities, increased trade and foreign investment are unlikely to reduce gang violence and drug trafficking.
Jose Miguel Cruz, professor of criminal violence in Central America at Florida International University, spoke to Truthout about the necessity of "political mechanisms to benefit most of the population." Cruz explains, "You need to expand regional institutions, too, and national and domestic institutions." Otherwise, these countries will never get free of the poverty that plagues much of Central America. Cruz gives the example of how Honduran economic elites "have basically taken over everything. They 'accumulate' everything, do not pay taxes, and return very little back to the country."
Until existing laws are equitably enforced and policies drafted that address the inequities they have created, neoliberal policies will increase poverty and dehumanize the masses as the Dominican Republic-Central American Free Trade Agreement (CAFTA-DR) did. CAFTA-DR is a free trade agreement between El Salvador, Guatemala, Honduras, Nicaragua, Costa Rica, the Dominican Republic and the United States that was ratified in 2006. Under its auspices, markets were liberalized and trade barriers and tariffs on guaranteed agricultural and manufactured goods, investments and services were eliminated.
The purported intent was to increase investments and create economic opportunities throughout the region. Although these neoliberal policies undeniably revitalized trade, which grew from an average of 5 percent in the 1990s to 13.9 percent after the agreement, most of the profits gained from trade have benefited the large corporations that have migrated to the region. Few of these profits went to working-class and poor people. Instead, local agriculture and traditional manufacturing were harmed by sometimes-subsidized foreign competition.
After the ratification of CAFTA-DR in 2006, governments shoved the agriculture and manufacturing sectors toward export-driven industries and financial services [2] to increase profits. Farmers were forced off their lands due to laws that required the production of high-demand crops such as biofuels instead of subsistence crops such as the rice, beans, or corn that locals needed to survive. Manufacturing laborers and farmers lost their jobs. As a result, income per capita decreased 19 percent from 1960s numbers, even though living standards have risen in Central America.
Eventually, farmers were forced to move to the cities. There, they had to fend for themselves, left with few resources on which to survive. They had no skills or training for city jobs, and especially not for the new ones that replaced traditional manufacturing employment.[3] The lack of relevant training relegated many poor people to desolate slums, isolated from work opportunities and desperate for money to buy basic necessities such as food.[4] In a world stacked against their survival, many of these people resorted to gangs for their subsistence.[5]
Gangs provided scarce resources like food.[6] To escape poverty and construct new spaces for possible alternative futures, former leftist guerrilla combatants developed local gangs - pandillas.[7] They used violent methods of extortion and racketeering, preying on local businesses and drug traffickers[8] using methods they had learned from being absorbed by maras - transnational criminal gangs.[9] Members of these groups are also sometimes called pandillas and maras.
Maras - immigrants in Los Angeles, California[10] - developed a violent anti-authoritarian attitude[11] as they competed for power as young immigrants from Central America.[12] Maras, then, took this anti-authoritarian culture with them back to Central America. After the Rodney King riots in 1992, these maras were deported back to their countries of origin ( Guatemala, Honduras and El Salvador for most) for protesting racial injustice with violence and looting.[13] After the riots, California decided to crack down on maras by deporting foreign nationals for committing even the smallest crimes.[14] Worse off than pandillas, maras often could not even speak Spanish to get jobs, but could only function on Spanglish.[15] Together, these gangs protested the poor, isolated conditions that they lived in by practicing extortion, racketeering and murder to gain the resources that the governments neglected to provide for them.[16]
Anthropologist and urban social and political research professor Dennis Rodgers explains that gang members are protesting their exclusion from their ability to work in the mainstream labor economy.[17]
Marcos - an imprisoned gang member - told an Oregon TV news station that gangs will continue to extort civilians as long as there are no employment or rehabilitation opportunities for gang members. In response to the rebellion of maras, Rodgers explains that Central American governments' oppressive policies - mano dura ("iron fist") policies - reflect the elites' view that poor people are "sub-human." He tells Truthout, "The elite have a particular outlook, often considering the poor as sub-human, and only looking out for their own priorities."
Central American governments rely on military personnel and resources in police operations and constrict due process.[18] Suspects can be convicted on subjective evidence like the appearance of tattoos.[19] Mano dura allows the government to "conceal the drivers of drug trafficking and gang violence, including widespread impunity, systemic under- and unemployment, illiteracy and weak education systems, and grinding poverty and inequality," research director of the Igarape Institute Robert Muggah wrote on Open Democracy.
Mano dura policies contribute to the cycle of poverty. Salvadoran photojournalist Juan Carlos tells Truthout how his friend could not get a job after serving time in prison for gang activity; employers wanted to distance themselves from people with former gang associations. Juan Carlos' friend ultimately rejoined a gang, feeling it was his only option for survival.
To begin to slow (and someday, halt) this cycle of poverty (thereby decreasing drug trafficking), Central American countries need to change perspectives on poverty, according to Douglas Urbina, official of the National Program of Prevention in Honduras. In an interview in Spanish, he told Truthout ending drug trafficking in the region "requires a more socially aware and prepared police, not a repressive police."
In June 2013, the Organization of American States (OAS) released a report suggesting legalizing drugs and improving rehabilitation programs. Rodgers concurred with the OAS report. "By legalizing drugs, you're going to undercut the revenue basis of drug trafficking," he said. But the OAS report cautions that more studies need to be done on the effects of legalization and warns that proper regulations need to be in place before any legalization can be implemented.[20] Ultimately, the problem circles back to the Unites States in several important ways, according to Muggah's comments in an email to Truthout: "[Ending drug trafficking] will also require the United States to revisit its own contribution to the problems of organized crime in the Americas - not least its voracious appetite for illegal drugs, its deportation policies and its continued investment in the 'war on drugs.'"
Endnotes
This is from a combination of reports about each Central America CAFTA-DR member. Costa Rican President Laura Chinchilla, Guatemalan President Otto Perez Molina, Honduran President Porfirio Lobo, and Panamanian President Ricardo Martinelli.
D Rodgers "Slum Wars of the 21st Century: Gangs, Mano Dura and the New Urban Geography of Conflict in Central America" Development and Change [2009] 949, p. 959.
Ibid, and MG Aguado "CAFTA-DR Governments in Contrast to Small-Scale Owners Parcel Engines of Development" http://www.coha.org/cafta-dr-governments-in-contrast-to-small-scale-owners-parcel-engines-of-development/#sthash.xb21n4XT.dpuf accessed 14 June 2013.
D Rodgers "Slum Wars of the 21st Century: Gangs, Mano Dura and the New Urban Geography of Conflict in Central America" Development and Change [2009] 949, p. 959.
Ibid, p. 960.
Ibid, p. 967.
Ibid, p. 963.
D Rodgers, R Muggah, and C Stevenson "Gangs of Central America: Causes, Costs, and Intervention" 23 Occasional Paper www.smallarmssurvey.org/fileadmin/docs/B-Occasional-papers/SAS-OP23-Gangs-Central-America.pdf accessed 14 June 2013, p. 9; and A Arce “Terror remains despite gang truce in El Salvador” KMTR (Springfield, 29 May 2013) http://www.kmtr.com/news/world/story/Terror-remains-despite-gang-truce-in-El-Salvador/6AVF6ZziMkSWiiU2OkvImQ.cspx accessed 14 June 2013.
D Rodgers, R Muggah, and C Stevenson "Gangs of Central America: Causes, Costs, and Intervention" 23 Occasional Paper www.smallarmssurvey.org/fileadmin/docs/B-Occasional-papers/SAS-OP23-Gangs-Central-America.pdf accessed 14 June 2013, p. 8.
A Arena "How Street Gangs Took Central America" Foreign Affairs [2005] 98, pp. 100-101.
Ibid, p. 101.
D Rodgers, R Muggah, and C Stevenson "Gangs of Central America: Causes, Costs, and Intervention" 23 Occasional Paper www.smallarmssurvey.org/fileadmin/docs/B-Occasional-papers/SAS-OP23-Gangs-Central-America.pdf accessed 14 June 2013, p. 7.
Ibid, p. 6.
Ibid.
A Arena "How Street Gangs Took Central America" Foreign Affairs [2005] 98, p. 100.
D Rodgers "Slum Wars of the 21st Century: Gangs, Mano Dura and the New Urban Geography of Conflict in Central America" Development and Change [2009] 949, p. 961.
Ibid, p. 963.
A Holland "Right on Crime? Conservative Party Politics and Mano Dura Policies in El Salvador" Latin American Research Review [2013] 44, p. 46.
Ibid.
JM Insulza "The Drug Problem in the Americas" (Organization of the American States June 2013) p. 94.
Copyright, Truthout.
Great post. I am very familiar with one of the corporations that you mentioned that paid less than nothing in taxes. In the last labor negotiations they tried their best to kill the employees pension plans, take away many benefits, and they also sent lots of jobs overseas. Thank god the union was able to minimize the givebacks. I often wonder who's supposed to buy the company's products as the working person gets squeezed to the point of no disposable income.
In a nutshell:
-- Fifty years ago the effective tax rate on corporations ran about 30% of their profits.
-- Today the effective corporate tax rate is 12% of their profits.
-- The difference is made up by running a massive federal deficit, borrowing from anyone-and-everyone worldwide to cover it, and redistributions such as running up $1-trillion in student debt.
Then we can talk about the $39-trillion that rich sociopaths hold in tax scam accounts overseas. The Romney accounts.
Sounds to me like Obama isn't doing a thing about changing corporate laws is he? He was voted in office because he lied to the people and they believed him.
Just goes to show how stupid the masses are when it comes to "being followers" instead of learning how to "be independent".
Independence has never been for the masses which is why they're the masses.
http://occupywallst.org/forum/none-are-more-hopelessly-enslaved-than-those-who-f/
Independence is the desire of individuals who don't want to be subject to the unthought norms of the masses. Even now, the masses of Egypt are in revolt against a strongly religious leader they elected a year ago. What did they really expect from electing such a person? Now that their mistake has been realized, what are they doing? Are they coming up with a constitution they can demand be implemented to prevent future chaos of the nature they're now experiencing? Will they take a template like the Swiss Constitution and adapt it to their own needs? Or will they just demand a different leader with no direct responsibility towards their own rights and interests? And while they will at least gather by the millions to vent their dissatisfaction, Americans won't even do that.
"Find out just what any people will quietly submit to and you have found the exact measure of injustice and wrong which will be imposed upon them"
-Frederick Douglass
http://occupywallst.org/forum/free-democracy-amendment/#comment-529334