The past two weeks have been simply startling at how those with wealth have been both evading taxes while hoarding money in almost unimaginable amounts in offshore tax havens. At the same time we have corporations doing all sorts of accounting and legal maneuvers to avoid taxes.
Paying your share of taxes was once considered to be a patriotic duty that one did proudly. Now as Leona Helmsley once stated “only little people pay taxes.” In the past at least 35 years since Ronald Reagan began his ‘me first and screw everybody else’ society paying taxes and doing the right thing by your country is looked down on as if only fools do that.
Buying politicians from county supervisors on up to presidents is one hell of a good investment. A few bucks invested reaps hundreds in taxes and fees avoided.
Recently we have had revelations from three sources giving us a glimpse of just how much in taxes are being evaded and avoided:
The Panama Papers are slowly leaking and have already taken down a couple of world leaders
Bernie Sanders who we must credit with making various aspects of inequality the central theme to this year’s campaign asked the GAO what percentage of corporations don’t pay taxes in this country.
Finally Oxfam released a report on US companies tax scams evading taxes.
The numbers are simply boggling and overwhelming. The imagination also boggles at what good the taxes from such money could do throughout the world. Schools, food, environmental projects and so much more. Estimates I have heard go from $7 Trillion (with a T) up to $32 Trillion.
To be honest, I am confused by the numbers and the various avoiding and evading tactics that my figures and descriptions may not be fully accurate. But the central message is this: We have be massively ripped off by the wealthy and the corporations. We are just now getting a glimpse of the iceberg. If we had a real press this would be story #1 day in and day out until it was resolved.
From Michelle Chen at the Nation magazine on tax day last Tuesday:
“If that $100 billion showed up on the government’s books, we could fund essential healthcare for more than 2 billion people worldwide, “quadruple spending on education in the world’s 47 poorest countries,” or basically finance the annual budgets for federal social security, labor and unemployment, and education program spending in the United States.
According to Oxfam, during 2008 through 2014, while the economy reeled and then hobbled forward, “the 50 largest US companies collectively received $27 in federal loans, loan guarantees and bailouts for every $1 they paid in federal taxes.” It’s not that they were exactly ungenerous to Washington; they were just savvy in terms of where they deposited their assets. The same companies collectively sank $2.6 billion into lobbying federal officials, and got a return on investment of “nearly $11.2 trillion in federal loans, loan guarantees and bailouts.” Overall, 45 of the 50 companies scored major tax discounts, whittling down the statutory 35 percent corporate rate to just 27 percent, Oxfam reports. Since all this happened while state and local budgets were gutted so communities could supposedly “live within their means,” it’s no wonder people are outraged that companies have funneled away billions that might otherwise help repair the damage of the financial crisis.
Corporations have perfected elaborate accounting schemes to maximize loopholes, such as “inversion”—recently thwarted by the Obama administration in an attempted Pfizer merger—in which triangulation between different tax authorities enables mega-multinationals like Apple and General Electric to restructure their internal accounting and siphon revenues toward lower-tax jurisdictions, while the rest of the company’s operations remain essentially unchanged. Another shell game known as “earnings stripping” involves recycling revenues through internal loans, which enables “the parent company to essentially pay artificially high interest rates to itself” without actually producing anything.
David Cay Johnston noted in The American Prospect that “Apple and General Electric owe at least $36 billion in taxes on profits being held tax-free offshore, Microsoft nearly $27 billion, and Pfizer $24 billion.” Separately, such multinational brands also help fuel job offshoring, contributing to a hemorrhaging of the country’s human and fiscal capital through both financial manipulation and the “real” economy of labor.
And once more we have one of the best examples of why the internet in the United States must remain free and neutral. Once it falls into corporate control, stories like these will never see the light of day.