Thursday, March 5, 2015

231. Big business should pay big taxes

It’s a simple game, really. Despite the constant noise about lower corporate income tax, corporations have found creative ways and maneuver nice sized loopholes to protect their earnings.

Multi-national companies often take revenue earned from American consumers to off-shore countries to avoid paying American taxes. They use these profits to reward CEOs and shareholders. They also use these profits to hire lobbyist and financially support politicians to protect their interest in not only making future profits but also ensuring corporate tax loop holes stay open.  It’s a vicious but profitable circle.

Corporations whine about the high US tax rate, but their effective tax rate is much lower—an average of 12.6%. Many pay no taxes at all. In 2012, I paid more taxes than Pfizer, Microsoft, Bank of America and Citigroup combined!

People get seriously upset when a teacher gets a raise or someone receiving food stamps owns a cell phone, yet these corporations make billions of dollars in the U.S. while receiving millions in subsidies and government contracts. They lay off American workers and outsource production to third world countries to further increase profits and avoid reasonable worker labor laws. Their CEOs make more in a day than teachers make in a year.

If that is not enough, they have created a working class environment which pits public worker vs private worker, middle class vs the poor, union vs non-union—all to keep the attention off their massive wealth and ownership of America. Tax-dodging corporations contribute to our immense federal deficit, which results in cries by conservatives to cut government jobs and services.  Corporations, shareholders and politicians win; the working class loses. What politician would cut off the hand that feeds them?

One of the few politicians who is fearless in her criticism of corporations, banks and Wall Street, Elizabeth Warren said, “Look around. Oil companies guzzle down the billions in profits. Billionaires pay a lower tax rate than their secretaries, and Wall Street CEOs, the same ones the direct our economy and destroyed millions of jobs still strut around Congress, no shame, demanding favors, and acting like we should thank them.”

But the story does not quite end there. When the corporations are stuck with all of this overseas cash—they cannot bring it into the country without paying taxes. The solution is to ask for a repatriation tax holiday to bring in the money at a discounted tax rate. Granted in 2004, companies promised job growth (all politicians fall for the job growth angle), but companies such as Pfizer and HP delivered lay-off notices, and bought back their own stock or paid out dividends.

Trickle-down economics, in all its forms and consequences, is the biggest pile of garbage ever sold to the American public. If corporations are taking their profits overseas, not paying their taxes and laying off American workers—what exactly is trickling down?