Monday, April 18, 2011

Income Tax Day Special: Who Wants To Be A Millionaire (And Pay Next To Nothing)?

By Manifesto Joe

The Republicans just don't get it, and it looks like they won't in the foreseeable future. With 40 cents of every federal dollar spent now being borrowed, they want to give yet more tax bonanzas to the rich while essentially abolishing Medicare and Medicaid.

This isn't what Americans voted for in 2008. A lower percentage of them, those who bothered to vote in 2010, voted for such folly whether they knew it or not.

The numbers cry out for a tax hike on the wealthy. Here's Robert Reich on the issue, courtesy of Truthout.

When one talks to earners at the upper-middle level, they are quick to point out the marginal rate of 35%, arguing that with progressive tax brackets, many of them end up paying more than lower earners as a percentage. (That's what comes of a steady mental diet of Fox News. That stuff rots brains.)

Yet such people seem to get amnesia when one points out that just 10 or so years ago, when the marginal rate was 39.6%, the U.S. was running a surplus. This was no accident. Even with the modest Clinton tax hike on the rich that barely passed in 1993, we didn't have the structural deficit we have now.

And the Mainstream Media are quick to obfuscate, talking to selected economists who keep telling the victims that raising taxes on the rich won't be enough. And who owns the MSM? Giant corporations -- and how much income tax do they pay?

Two-thirds of corporations pay no income tax

That's not news -- the first of the stories broke in 2008. Here's a link to one of them.

Although it's not news, many people don't seem to "get it," so it bears repeating, and repeating some more. Most of these "legal persons" are getting a free ride. They use the infrastructure (such as it is now), and have vast resources to fleece ordinary, unsuspecting victims out of many billions, yet they pay nothing.

In case you thought I was joking, here's a link to a more recent story about this, courtesy of Alternet.

In their 1990 book America: What Went Wrong?, investigative journalists Donald Barlett and James Steele cited IRS statistics that show that, in 1959, corporations accounted for 39% of federal tax revenue. By 1989, that was down to 17%. And it's
probably gotten worse since then.

Here's a brief roll call of Corporate America's tax slackers:

General Electric -- Last month, The New York Times reported that, in addition to paying no federal income taxes this year, GE, the largest U.S. corporation, is to get a tax credit of $3.2 billion. GE made $14.1 billion in profits in 2010, $5.1 billion of which came from its U.S. operations. The story was conspicuously absent from NBC News, part-owned by General Electric.

Goldman Sachs -- Bloomberg News, in December 2008, reported that Goldman Sachs Group Inc., which got $10 billion and debt guarantees from the U.S. government in October, expects to pay $14 million in taxes worldwide for 2008 compared with $6 billion in 2007. The company’s effective income tax rate dropped to 1 percent from 34.1 percent, Goldman Sachs said. The firm reported a $2.3 billion profit for the year after paying $10.9 billion in employee compensation and benefits. U.S. Rep. Lloyd Doggett, a Texas Democrat who serves on the tax-writing House Ways and Means Committee, said steps by Goldman Sachs and other banks shifting income to countries with lower taxes is cause for concern. "This problem is larger than Goldman Sachs," Doggett said. "With the right hand out begging for bailout money, the left is hiding it offshore."

ExxonMobil -- In March 2010, Forbes magazine reported that the oil giant, "which last year reported a record $45.2 billion profit, paid the most taxes of any corporation, but none of it went to the IRS":

Exxon tries to limit the tax pain with the help of 20 wholly owned subsidiaries domiciled in the Bahamas, Bermuda and the Cayman Islands that (legally) shelter the cash flow from operations in the likes of Angola, Azerbaijan and Abu Dhabi. No wonder that of $15 billion in income taxes last year, Exxon paid none of it to Uncle Sam, and has tens of billions in earnings permanently reinvested overseas.

Mother Jones magazine noted that, despite benefiting from corporate welfare in the U.S., Exxon complains about paying high taxes, claiming that it threatens energy innovation research. It was noted at the Wonk Room that big corporations' tax shelter practices similar to Exxon’s shift a $100 billion annual tax burden onto U.S. taxpayers.

This list could grow to tedious proportions. You should get the picture by now.

Let's start sharing some sacrifice

Nobody likes to pay taxes. I owed the IRS far more than I expected to this year, and will probably be until fall paying it all off. But when some common slob like me is paying Uncle Sam more, year after year, than GE is, then there must be something dreadfully wrong with this system.

But alas, our Republican brethren still don't get it. They are promoting the idea of still more tax bonanzas for the wealthy. And, although a corporation enjoys the status of a "legal person" in our psychopathic system, two-thirds of them pay nothing, and even get refunds and billions in corporate welfare on top of that.

The latest news on this was from The Associated Press. It's not just corporations that are the problem. About 45% of U.S. households will pay no income tax at all, thanks to all the breaks that people, especially the super-rich, are getting.

It should be clear, if one looks at the numbers honestly, that our structural deficit has much more to do with what needs to be raised than with what needs to be cut.

Yet, the Republicans persist in their policies of the past 30-plus years, to defecate all over ordinary people while cutting sweet deals for their rich campaign contributors. And the Democrats haven't been very much better. Even President Barack "Change you can believe in" Obama hasn't been nearly candid enough on this issue.

So, what is to be done? Giant corporations and the super-rich clearly have politicians by the balls and have been gaming the system accordingly for the past 30-plus years. What can an ordinary person do?

(1) Stop believing the MSM. They obfuscate, and sometimes outright lie. And that shouldn't be surprising, given that they are generally owned by the very corporations that have been getting a free ride.

(2) Vote in the primaries. This is where people can get real Democrats, not just more corporate lackeys, to be candidates in the general election. The one positive that came out of the 2010 midterm debacle was that now, the Democrats left in Congress are more progressive on these kinds of issues. Ironically, it was largely the "Blue Dogs" and Democrats-in-name-only who went down in defeat to Tea Party challengers.

(3) Vote in the general elections. As frustrating as DINOs can be, and as agonizingly placating as Obama has been, we're better off with them than we are now, with right-wing Republican ideologues writing the agenda. President Clinton, Republicrat though he often was, presided over the last balanced federal budget, and that was largely because he demanded that the rich pay at least a modestly higher percentage of their hefty incomes in taxes. And back then, there was little talk of privatizing Medicare.

(4) General strike. In contemporary America, it will be very hard to float this idea. But if most of the work force in this country were willing to "sick out" just one day, and a few spokespeople made clear to the powers that be that this was an organized protest, it might perk up some ears.

This country is far from broke. The trick is going to be getting the rich slackers who have the bucks to fork some of them over. There are people out there who have it -- but they aren't going to let go of any of it without a fight.

Just pay your taxes today, chumps. Serious training starts tomorrow.

Manifesto Joe Is An Underground Writer Living In Texas.

4 comments:

Jack Jodell said...

I'm with you, Joe. Shared sacrifice across the board! TAX THE RICH AND FEED THE POOR!

Cletis L. Stump said...

We have devolved over the last thirty years to where I no longer recognize our country. Fairness is important and I am proof that investing in people pays returns. Many others are as well.

SJ said...

"General strike."

I agree completely. This is a great bluepruint for real immediate change, no matter who is in the Senate or the House or the White house.
Great post Sir Joe.
-SJ

Anonymous said...

Gotta love an oligarchy. A two-tiered system of double standards at the top and a never-ending trip to pound-town for everyone on the bottom.

-WageslaveZ-