by Deborah Burger

If the deficit hawks in Congress are serious about righting our economic ship and reducing deficits in the federal budget and many state capitols, it would we worth listening to the voices rising from the streets suggesting a very different solution than more cuts in safety net programs, education, pensions, and worker’s rights.

This is not a budget fight, it’s a fight for the future of an America in which everyone should be able to retire in dignity, not worry about whether they can go to the doctor when they get sick, or whether there will still be schools for their kids.

How will we pay for it? By increasing the revenues from those who can most afford it, not by punishing those who have the least. By requiring corporations and the wealthiest individuals to pay their fair share, and stop blaming working people for an economic crisis created by Wall Street and exploited by their politician acolytes.

We’ve all heard the arguments. Pass more corporate tax breaks because that’s what makes the economy grow. Except it doesn’t.

Corporate profits per employee are at record levels. At $1.6 trillion, third quarter 2009 corporate profits were the highest ever recorded. Yet official unemployment still hovers near 9 percent, and the real jobless number is probably double that. Whatever big corporations are doing with their record profits, they are not hiring more workers.

Or the argument that our 35 percent corporate tax rate is one of the highest in the world. Except few if any major corporations pay anywhere near that amount. Half of foreign companies and about 42 percent of U.S. companies paid no U.S. income taxes for two or more years from 1998 to 2005, according to a recent Government Accounting Office study.

How do they accomplish this? Pages of corporate tax loopholes that render the supposed tax rate meaningless, loopholes not available to the average working family.

Who are some of those tax scofflaws? Bank of America and Citigroup, two of the financial institutions that, unlike workers did actually create the financial meltdown, paid no taxes in 2009. Boeing, just awarded a new $35 billion contract by the federal government to build airplanes, also paid no taxes between 2008 and 2010 despite recording $10 billion in profits those year, reports Citizens for Tax Justice.

Where’s the shared sacrifice from these corporate giants? Not from General Electric which, as the New York Times reported March 24, made $14.2 billion in profits in 2010, but paid no U.S. taxes, and was rewarded with the appointment of their top executive to head President Obama’s Council on Jobs and Competitiveness. Apparently paying no taxes is a model for how to be competitive.

Then there’s the wealthiest Americans who won a two year extension on tax breaks in December and also profited from the near elimination of estate taxes, at a time when the richest 5 percent of Americans control 23 percent of total income, compared to just 12 percent for the 40 percent at the bottom.

According to Merrill Lynch Global Wealth Management and Capgemini Consulting, there were about 3 million high net worth individuals and ultra high net wealth individuals in the US in 2009, those with investable assets, excluding primary residences and consumables, of from $1 million to $30 million.

Calculations by the Institute for Health and Socio-Economic Policy, research arm of National Nurses United, shows that a one-time wealth surcharge of 14% on those assets would more than pay for the $1.6 trillion budget deficit projection for 2011. Or, it would support about 33.8 million households at the national real median income level for 2008, pay for a year’s worth of AIDS medication for about 142 million patients, or create 34 million jobs at $50,000 per year.

In other words, we could more than balance our federal and state budgets without cutting Social Security or slashing pensions for public servants or depriving students of access to a decent education or far too many Americans of access to healthcare.

Turn off the Fox News echo chamber and you can hear the sounds of those calling for economic justice and a more fair tax system every day in the streets of Madison, Columbus, Indianapolis, and other cities across America. They have opened a door that will not be closed, and their voices are getting louder.

In January, President Obama named General Electric CEO Jeffrey Immelt to head the President's Council on Jobs and Competitiveness, an economic advisory board focused on job creation.

In his State of the Union address that same month, meanwhile, he called for the closure of corporate tax loopholes in conjunction with a lowering of the corporate tax rate, which stands at 35 percent.

"Over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries," he said. "Those with accountants or lawyers to work the system can end up paying no taxes at all. But all the rest are hit with one of the highest corporate tax rates in the world. It makes no sense. It has to change."

Mr. Obama's choice of Immelt came under scrutiny Friday in the wake of a front-page story in the New York Times reporting that despite $14.2 billion in worldwide profits - including more than $5 billion from U.S. operations - GE did not owe taxes in 2010.

In fact, the story said, G.E. claimed a tax benefit of $3.2 billion.

At his press briefing Friday afternoon, White House press secretary Jay Carney was asked to square Mr. Obama's call for corporate tax reform with his embrace of Immelt. Asked if the story bothered the president, Carney responded that "he is bothered by what I think you're getting at, which is that Americans, I'm sure, who read that story or heard about it are wondering, you know -- you know, how this could be."

Carney went on to make the case for corporate tax reform, noting that companies pay "armies of tax lawyers to understand how it works and to take advantage of the various loopholes that exist."

He stressed, however, that he was "not addressing this specific company because I don't know independently about that." (According to the Times, "G.E.'s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world's best tax law firm.")

Carney was asked why, if the president wants corporate tax reform, he appointed "to the head of the Competitiveness and Jobs Council a person who is now the poster child for abusing the system to get out of paying taxes."

"The jobs and competitiveness council is designed for just that," Carney responded. "And he has brought together a lot of voices on that. And he wants to hear the opinions of every member of that council. And we have said, with regard to questions about other members who have been appointed, that the president obviously doesn't want a council of people who agree with him on every issue; he wants to hear diversity of opinion."

"In the end, the decisions that are made about which policy to pursue on corporate tax reform will be the president's decision and his policy," he added.

Carney said later that Mr. Obama continues to have faith in Immelt to run the council.

Overall, the Times notes, the share of U.S. taxes paid by corporations has fallen from 30 percent of federal revenue in the 1950s to 6.6 percent in 2009.

by Peter Hart

by Paul Buchheit

The nicest man I ever met worked behind the counter of the towing company that hauled away my car and charged me two days pay to get it back. I went in ranting mad, but the man was so understanding and sympathetic that I almost thanked him for taking good care of my car.

I had the same feeling the other day when an Exxon executive contacted me about an alleged error on our PayUpNow.org website. He cordially informed us that his company had paid a lot of taxes in 2009. The timing of his message was opportune, as PayUpNow.org was just completing an analysis of the worst federal income tax avoiders, and we didn't want to make any mistakes.

General Electric had earned the #1 spot, of course. Not only did they receive a $3.2 billion refund on $14 billion in pre-tax profit, but they wouldn't admit it. "G.E. is committed to acting with integrity in relation to our tax obligations," said Anne Eisele, a company spokeswoman. About the 2010 controversy she remarked, "GE did not pay US federal taxes last year because we did not owe any".

That is real hubris, worthy of #1.

So now we were occupied with the search for #2. Three factors were considered:
-- the amount of tax not paid
-- the percentage of tax not paid
-- the audacity with which the tax was not paid

Many good candidates came to our attention, because of their consistent and obvious tax avoidance. Verizon and Boeing and Dow and DuPont all made profits three years in a row, but all paid zero taxes over the three-year period. Banking leaders Citigroup and Bank of America, with a combined $8 billion of pretax earnings in 2009 and 2010, each paid zero taxes two years in a row. From 2008 to 2010, Chevron paid less than 5% a year. Merck paid 5%. Hewlett-Packard 3%. IBM 2%. Carnival 1%.

But Exxon seemed to have it all, with the nation's highest pre-tax earnings three years in a row, a 2% federal income tax payment rate, and an unapologetic attitude comparable to that of GE.

Then the friendly executive called and muddled the issue. We reviewed our data, which seemed accurate, but any hint of discrepancy demanded a revisiting of the facts.

We returned to late 2010. In a speech on the Senate floor on November 30, Bernie Sanders said: "Last year, ExxonMobil made $19 billion in profit. Guess what. They paid zero in taxes. They got a $156 million refund from the IRS." The "truth in politics" Politifact group took Senator Sanders to task, explaining, through an Exxon spokesman, that the 2009 tax was low because the company had overpaid its 2008 taxes.

But according to Exxon's 10-K form, they paid less than 4% in federal income taxes in 2008.

The company spokesman told PolitiFact that the "U.S. income tax expense for 2009 activities was approximately $500 million."

Even if that's true, it amounts to a 1.5% federal income tax rate for 2009.

Exxon's rise to the #2 tax avoidance spot behind GE was clinched on December 14, 2010, when a company publication boldly announced "ExxonMobil is a leading U.S. taxpayer." The article included the statement "..any claim we don’t pay taxes is absurd."

Somewhat befuddled, we moved on to 2010 taxes. A February, 2011 report entitled "Taking a look at our 10-K," and authored by Ken Cohen, ExxonMobil's vice president of public and government affairs, stated: "In 2010, our total taxes and duties to the U.S. government and its subdivisions exceeded $9.8 billion, including more than $1.6 billion in income tax expense...U.S. oil and gas companies shoulder a significantly higher tax burden than other industries."

Well, Ken, according to your 10-K only $1.27 billion was paid in federal income tax. That's a 2.3% rate.

Your total avoided tax over three years (based on a 35% rate) was MORE THAN THE TOTAL INCOME of all but two companies (Microsoft and Walmart).

And your 2010 financial report also shows a 'theoretical tax' of $18,536, 85% of its "Total income tax expense" of $21,561. Here's what The Economist says about theoretical taxes: "Companies have two versions of the truth: the theoretical tax bill, calculated using accounting profits..and the actual cash tax they pay...If a company is systematically avoiding tax, the cash payments are often much lower than the theoretical ones."

Congratulations, gentle executives of Exxon, you're a close second to GE. Maybe next year you'll reach the top by hitting bottom on your taxes.

Why does it matter what anyone pays in taxes? The amount the government spends and the amount they take in in tax revenue have nothing to do with each other. The government has been spending more than it takes in for decades. Since tax revenues have literally no connection to spending what does it matter what companies pay in taxes? The fact that progressives openly dismiss massive deficit spending as a non-issue, but scream for blood when a corporation pays what they deem as too little in taxes suggests a different motive. Could it be that progressives are motivated by hatred of anyone who is more productive than they are?  

"tax revenues have literally no connection to spending..."

If not, then let's just raise the taxes on the rich and see what they say. Why do Republicans fight so hard to give tax breaks to the wealthy for all the wars they want?

But the rich seem to think it matters. They've been buying politicians to "fix" the tax system massively in their favor for 30 years now. If you missed that, then you're dumber than most trolls.

Should the working poor be taxed more heavily?

In Illinois, that question is moot. They already are, incredibly so in comparison to the wealthy, as Illinois is infamous for the tax burden it places on working families, despite the supposedly "flat" income tax here. The lowest 20% of incomes pay 13% in Illinois taxes, the next 20% pay 11%, while the next 20% pay 10.4%. (all figures are adjusted to 2009 and are available here.)

Those who make over $500,000 a year? They pay 4.9%.

That may be "fair" to you or even something no one should concern themselves with.

It has nothing to do with productivity. Most people I know work hard for a living and none of them pay 4.9% in Illinois taxes, but I'm sure they'd think that was fair for them, if it's fair for Jimmy John. I guess us working folks just can't afford to buy us the politicians we need to put us on Easy St.

Since conservatives believe that "tax revenues have literally no connection to spending..." that may account for this stark reality that cuts against the bullshit rhetoric of conservatives. For them, it's "do as I say, not as I do." That explains a lot about this chart, which shows that every Democratic president between Roosevelt & Obama presided over lowering the fedral debt as a percent of GDP. Every Republican president since Reagan, on the other hand, has also decided that "tax revenues have literally no connection to spending..."

Gee thanks.

Well lets start with some of your "points".

"The biggest "welfare queen" in the US?"

Well its not the Pentagon because they are actually doing a job and serving a purpose. When you work for your money you are, by definition, not on welfare. The 20% of the budget that they received last year was spent serving an actual function. The 46% of the budget that went to entitlements, on the other hand, was a giant welfare handout.

"the idea of a billionaire "working hard" is just laughable"

The top 20% of income earners contribute 26% of total hours worked in the economy every year on average. The bottom 20% contribute just 9%. In other words the average rich man works 2.9 times harder than the average poor man.

 "US corporations who export our jobs while they sit on over a trillion dollars in cash after we the taxpayers bailed them out?"

Corporations are relocating outside the country because they are being taxed to death. Why do you think so many companies earn and keep their assets outside the United States? Its a very simple equation; if the cost of paying taxes exceeds the cost of relocation the company relocates. And takes jobs with it. If its cheaper to stay here the company will stay here.

The reason companies are sitting on their cash is because they have no idea what things like Obamacare and increased regulations are going to cost them. Our current ruling regime has created such an atmosphere of uncertainty that business' are scared to risk assets on investments. Corporations are good at calculating risk, but uncertainty is something they are scared of. It's like playing a game of football when the referee changes the rules every few minutes. You can't have a gameplan if the rules are constantly in flux.

Ok, first of all the financial crisis was created by the government forcing banks to make subprime loans and then not securing them as promised. Had the government not forced banks into making bad loans the crisis would not have happened. Secondly, the bailout was not free money. It was a loan, with interest, that has been paid back. The taxpayers made money of the banks that got bailouts. Should the taxpayers give that money back to the banks since profit is evil?

"You're not serious, you're a troll"

And lacking any facts or substance in your arguments you close with an insult. Very mature.

And, of course, you still haven't addressed my original point about the tax/spending disconnect. Since you remain silent on the issue can I assume that you indeed don't actually care about the budget and simply want to use the government to screw anyone that earns more money than you?

by Chuck Collins

As you pony up to pay your taxes – or fill out forms to get back a portion of what Uncle Sam has already withheld from your paycheck – pause to contemplate how wealthy and corporate tax dodgers deal with Tax Day. The emerging US UNCUT movement is pressing the point: “No Budget Cuts before tax dodgers pay up.” There are over 100 actions planned for this tax weekend to underscore this point.

If you write a check over $10 to the IRS, then you just paid more than Verizon, Boeing, Bank of America, Citigroup and General Electric combined in federal taxes. 

And you may have paid a higher percentage of your income than the billionaires who appear on the pages of the Forbes 400.  As super-investor Warren Buffet has pointed out, he pays a lower actual tax rate than his secretary. 

Business Week’s cover story this week is “The Billionaires Guide to Paying No Taxes.”  Reporter Jessie Drucker declares, “the more you make, the less you pay.”  For our nation’s millionaires and billionaires, “this could be the best tax day since the early 1930s.” 

Don’t worry, we’re assured, these wealthy investors and global corporations are the great productive engines of the American economy.  To tax them at all, we are told, would be to “kill jobs” and hurt the economy.  In fact, we should pay them – like the $3.2 billion we taxpayers funneled to General Electric last year in various forms of tax breaks and subsidies. 

Here’s the thing:  If you gave me $3 billion – I would create jobs, too.  Or if our society invested in green infrastructure and our small domestic U.S. business sector, we’d create even more jobs.  But the key question is what kind of country do we want to be –and how will we pay for it together?   

When we hear our governors and lawmakers lament that “we’re broke,” consider this fact: If corporations and households with $1 million income paid at the same levels they did in 1961, the Treasury would collect an additional $716 billion a year – or $7 trillion over a decade.  

Our budgetary stress is the result of declining revenue, thanks to the economic downturn and decades of tax cuts.  A new report that I co-authored, Unnecessary Austerity, argues that before we make draconian budget cuts at the federal and state level -- we should reverse huge tax cuts for the wealthy and tax dodging corporations. 

If corporations and households with $1 million income paid at the same levels they did in 1961, the Treasury would collect an additional $716 billion a year – or $7 trillion over a decade.

There are two important explanations behind our current budget “squeeze.” First, income and wealth have become extremely concentrated in the hands of the super wealthy. The richest 1 percent of households own over 35.6 percent of all private wealth, approximately $20 trillion. The number of households with incomes exceeding $1 million has grown from 15,753 in 1961 to 361,000 today, adjusted for inflation.  Meanwhile the middle class standard of living is collapsing and poverty rates are at a 15-year high. 

Second, we’ve dramatically reduced taxes on these wealthy households and the global corporations they largely own. Congress and special interest lobbyists have made mincemeat of our tax code, losing hundreds of billions in revenue. A new study from Public Campaign shows that a dozen companies spent over $1 billion on lobbying Congress for subsidies and tax breaks.  

That’s how a profitable company like General Electric legally and aggressively avoids taxes. Since 2006, General Electric has reported over $26 billion in profits, yet paid not one penny in U.S. taxes.

Other huge global companies such as Verizon, Boeing, ExxonMobil, and Federal Express also pay no or very low taxes.  

In his new book Treasure Islands, journalist Nicholas Shaxson describes how these artful tax dodgers use accounting gymnastics to move money to overseas tax havens like the Cayman Islands or Ireland. They pretend to earn their profits offshore and then report their paper losses here in the United States—reducing or eliminating their U.S. taxes. 

Our “Unnecessary Austerity” report identifies over $4 trillion in potential revenue over the next decade. Closing offshore tax havens could generate an estimated $100 billion a year.  Adding new top tax brackets for millionaires could generate another $60-80 billion.  Instituting a financial transaction tax could generate $150 billion a year. 

Public opinion polls show that the majority of voters would rather hike taxes on millionaires and tax dodgers before budget cuts.  But with Congress captured by corporate interests, it’s going to take a powerful movement to push back.  The emerging US UNCUT movement is pressing the point: “No Budget Cuts before tax dodgers pay up.”  There are over 100 actions planned for this tax weekend to underscore this point. 

Without such a social movement, reasonable solutions will be drowned out by the drumbeat of “we’re broke.”

This Tax Day, Make THEM Pay ...a letter about April 18th from Michael Moore

Friday, April 15th, 2011

Friends,

Do you wonder (like I do) what the tax accountants and executives are doing over at GE this weekend? Frantically rushing to fill out their IRS returns like the rest of us?

Hardly. They're taking the weekend off to throw themselves a big party and have a hearty laugh at all of us. It must really crack them up to see us like suckers scurrying around to make sure we report everything to Uncle Sam -- and even send him a check, if necessary.

The joke's on us, folks. GE and tons of other corporations will have a tax bill for 2010 of ZERO. GE had $14.2 billion in profits in 2010. Yet they will contribute NOTHING to the federal government while every last dime is soaked from us.

In the latest budget deal, our politicians could have tackled the deficit by stopping the flow of these ill-gotten billions to corporations. Instead they cut billions from "wasteful" programs that do "wasteful" things, like create new jobs, drive economic growth, and help the needy and our nation's children. It's Democracy in reverse and it sickens me.

GE spends $20 million a year to lobby Congress to throw themselves this party. But do you know what speaks louder than $20 million? 20 million votes! 20 million people, and more, standing together and taking to the streets.. That starts now, with you.

This coming Monday, April 18th is Tax Day -- and that's the day when "we the people" will demand our country back from these corporations in events all across the country. You can find the nearest event to you here.

MoveOn members -- along with union, community, and environmental allies -- will gather outside the headquarters and local offices of the biggest corporate tax dodgers to deliver tax bills from the American people. And we'll demand that our leaders make these corporate deadbeats pay.

We're doing this because we don't buy into the Big Lie: that greedy teachers caused the crash on Wall Street! That the selfish firefighters sent millions of jobs overseas! That pregnant woman, infants, and children are sending us into deficit!

No, it was the big corporations that did this. It was the CEOs and the top 1% of the country. THEY brought on the mortgage crisis. THEY made off with trillions of dollars from our economy. THEY are systematically destroying the middle class. And THEY have bought and sold the very people elected to represent us!

On Monday, we will have something to say to Exxon, Chevron, and the big banks that crashed our economy and got billions in bailouts, like Citigroup and Bank of America, who pay little or no federal income tax. In fact, the IRS will likely give them a tax REBATE. If that doesn't boggle your mind then nothing will.

The Tax Day events are about sending this message: We are coming after you, we are stopping you and we are going to return the money, jobs, and homes you stole from the people. This is your tipping point, Corporate America. And I, for one, am glad it's going to happen this Monday.

If you've never been to an event like this before, this is the time. And don't go alone, because none of us can win this fight by ourselves. Plus, it's more fun and exciting to go along with friends and family to be part of real democracy in action -- not the store-bought kind Big Business gets on Capitol Hill.

I really hope you can make it. This is our chance, my friends. Take the time on Monday to make your voice heard. I can guarantee you I will. Please join me.

Yours,
Michael Moore
MMFlint@aol.com
MichaelMoore.com

by Brian Tierney

By Monday April 18th most Americans will have finished filing their taxes, helping to boost government revenue at a time when the only thing most politicians care to discuss is how to cut the deficit.

But a large pack of corporate citizens will probably not be worrying about paying their dues; tax day, like any other day for them, will be strictly devoted to growing their bloated profit margins.

Recent reporting that some of the largest U.S. corporations have paid little to nothing in federal income taxes in the past few years hasn’t stopped the upside-down debate in Washington. The beltway budget battle remains focused on one blunt question: how much of a beating should be given to workers and the poor in order to bring down the deficit while leaving the corporate bottom line unscathed?

Beyond Capitol Hill, however, the scope of corporate tax-dodging during a period of devastating budget cuts has inspired the ire of thousands of Americans and given birth to a new people-powered movement to hold big business and their mouthpieces in Washington accountable for the cuts. It’s called US Uncut, a campaign that has produced hundreds of direct actions targeting notorious tax cheats like Bank of America and Verizon while agitating around other major offenders like General Electric and Citigroup.

Thanks to tax breaks, creative accounting schemes, loopholes and off-shore havens, these companies are raking in billions and getting away with systematic tax-evading operations that would land ordinary people in jail.

Launched back in February, US Uncut has so far made Bank of America and Verizon the primary targets of its actions. According to US Uncut, Bank of America’s 2009 pre-tax income was $4.4 billion. As the fifth largest corporation in the world, Bank of America received $45 billion in bailout funds in 2008 and 2009 but didn’t pay a single dime in federal income taxes in 2009. In the same year, Bank of America received up to $1.9 billion in tax refunds.

How did they get away with it? Bank of America has 115 foreign tax-havens where it keeps its income in order to avoid taxes. And Bank of America is not alone. Roughly 25 percent of the largest U.S. corporations don’t pay any federal income taxes.

US Uncut has adopted a model of organizing first used in the U.K. where an organization called UK Uncut has been using hundreds of creatively-themed, non-violent direct actions targeting companies that flout their duty to pay taxes while budget crises are crippling social programs. The “flash mob”-style actions are meant to both pressure companies and galvanize the broader population through attention-grabbing and highly publicized direct actions.

According to its website, “US Uncut is a grassroots movement taking direct action against corporate tax cheats and unnecessary and unfair public service cuts across the U.S. Washington’s proposed budget for the coming year sends a clear message: The wrath of budget cuts will fall upon the shoulders of hard-working Americans. That’s unacceptable.”

The approach taken by US Uncut relies heavily on the use of social media and a decentralized, do-it-yourself system for organizing protest actions and posting them on its website.

George Taghi, a leading organizer with US Uncut in Washington DC, explained that US Uncut wants to change the public discourse around the budget and the deficit and engage the public with its approach to activism.

“US Uncut’s goal is to punctuate and change the narrative that says ‘we have a spending problem’ to ‘we have a revenue problem,’” Taghi says.

When asked why US Uncut is focused on tax-dodging companies rather than the lawmakers who enable them, Taghi pointed to the corporations as the real source of power in Washington:

“US Uncut has focused on bringing protests to companies’ storefronts, instead of lawmakers, because that is where the true powers lie. On the whole, for companies to claim ignorance or deny responsibility for our lopsided tax code – that legalizes off-shoring of profits and accounting gimmicks – is a farce.  These companies have lobbied Congress for such privileges and donate to representatives to enact loopholes.”

In addition to Bank of American, US Uncut is shining the spotlight on other corporations like Verizon, which reported a pre-tax income of $24.2 billion last year and was rewarded with a $1.3 billion tax refund. Citigroup has paid zero dollars in taxes in the last four years, according to US Uncut. The company also was the largest recipient of government bailout money, totaling a staggering $476 billion.

The issue of corporate tax-dodging has been pushed into the limelight in recent months. Last month, Vermont Senator Bernie Sanders compiled a list of “the 10 worst corporate income tax avoiders.” The list included companies such as those on the US Uncut target list, in addition to Exxon Mobile, which made $19 billion in profits in 2009, paid no federal income taxes and received a $156 million tax rebate, according to SEC filings. While the official corporate tax rate is 35 percent, Goldman Sachs managed to whittle its tax obligations down to 1.1 percent of its income in 2008.

In March, the New York Times published a front-page article describing how General Electric, the second largest corporation in the world, paid nothing in federal income taxes last year while it reported $14.2 billion in profits. On top of that, GE claimed a tax benefit of $3.2 billion.

“Its extraordinary success,” according to the Times article, “is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore.”

Add to all of this GE’s anti-worker policies – which include plant closures that have eliminated a fifth of GE jobs in the U.S. since 2002 and the company’s drive to cut the wages and benefits of its mostly unionized workforce – and you have what President Obama lauds as a “model” for American business. 

On Wednesday that model was the target of a hoax executed by the same activists of US Uncut, in partnership with the “Yes Men,” an anti-corporate group notorious for pulling pranks that parody corporate propaganda. The two groups put out a fake GE press release that announced GE’s plans to return all of its $3.2 billion tax refund in response to public outrage. The stunt brilliantly put GE into an awkward public relations situation in which the company was forced to openly admit that it in fact had no intention of paying anything back.  

Given GE’s relationship with the White House, the egregiousness of its tax-dodging helps to contextualize the willingness of the Obama administration to inflict such harsh cuts like the ones that went through Congress last week to avert a government shutdown. Instead of being sanctioned for its tax cheating, GE’s CEO, Jeffrey Immelt, was awarded a top position in the Obama administration as chair of the president’s Council on Jobs and Competitiveness.

So when it comes to spending and budget cuts, forget hope and change. Compromise and capitulation is the catchphrase of this administration, and this should surprise no one who knows the company that Obama keeps. In fact, the president’s “compromise” last week with Republican House Speaker John Boehner cannot even be called that. Democrats and the White House conceded even more in spending cuts than what Republicans themselves originally proposed at the beginning of the year. And it was a “compromise” that Obama applauded as the largest annual spending cut in U.S. history.

On Wednesday Obama delivered a speech in which he seemed to be changing course and finally turning back to the progressive ideals that inspired millions during his campaign. His argument for progressive tax policies, making the wealthy pay more and preserving critical programs like Medicare and Social Security was a rhetorical departure from what we’ve seen from his administration over the past several months of budget wrangling.

Following the speech, liberal commentators voiced their exuberance and suggested that Obama’s disillusioned base can again find some cause for excitement. Others were not as impressed.

“[Obama] has given so many great speeches before, only to disappoint. Unfortunately, he stills adheres to the right’s narrative that spending cuts on domestic programs has to happen to the tune of nearly $1 trillion over ten years,” said Taghi from US Uncut.

The speech also left the door open to unspecified reforms to Social Security and Medicare that will play into the hands of the right-wing tea party-backed Republicans in Congress who want to privatize and destroy those programs.

Last week Congress voted to chop $38 billion dollars from the budget with cuts that will affect health programs, heating assistance to the poor, education programs, the Environmental Protection Agency, and food safety. Funding for essential women’s health services provided by Planned Parenthood just barely made it passed the GOP’s ideological chopping block, but Obama and the Democrats still traded away money for those services for residents of the District of Columbia.

And while the let-them-eat-cake budget cutters are using the deficit to justify these cuts at the federal level, they have also been on the attack at the state level where budgets are being slashed and unions are under assault.

The campaign against unions has helped breathe some life back into the labor movement. But what started as an anti-union crusade in Wisconsin – inspired and funded by the right-wing billionaire Koch brothers – has spread to other states, and it’s not just Republicans who are out to make union workers scapegoats for the deficit. Democratic governors in California, New York, and Illinois are using the deficit as an excuse to force major concessions from public sector unions.

In response, unions and labor activists have been mobilizing and fighting back. A national day of action last week on April 4th saw over a thousand union rallies and other actions for labor across the country.

In the midst of this labor upsurge, US Uncut is another component of the progressive fightback, and it’s a campaign that goes directly to the corporate tax-dodgers who are materially and ideologically feeding the narrative about a deficit crisis that can only be solved through budget cuts. A unified progressive fightback – including labor, environmentalist and consumer rights groups – is needed in order to push back against austerity and fight to rebuild the tattered social safety net that Washington is poised to shred altogether.    

The right yearns for capitalism unfettered, and to get there they are relying on a structure in Washington that can only be described as plutocracy. And neither party is willing to consider serious cuts to the massive Pentagon budget. Unpopular wars abroad and unpopular tax cuts at home for the wealthy are all evidently worth the resultant suffering inflicted on millions here in the U.S. under the budget ax.

In Wisconsin and other states where workers have been fighting back, an important example has been set. This class war no longer needs to be asymmetrical. Working people can and must fight back, not just against the budget cutters in Washington, but against their corporate paymasters whose anti-worker and tax-dodging practices have helped set the stage for ruthless austerity.    

We simply cannot defeat the high-powered corporate lobbyists on their own turf. If ever there was a time for progressives and the left to abandon the tired and feeble strategies of lobbying, letter-writing, and petition-signing, that time is now. We need to exert pressure where it will be felt – on the streets and in the workplace through mass mobilizations, strikes, and yes, militant direct actions.

US Uncut called for national days of action on “Tax Weekend,” April 15th to the 17th, and on Friday there were over 130 actions across the country posted on its website through tax day. 

It’s time to go directly after the corporate powers using creative direct action and other forms of protest to expose their dirty war against workers and the poor.

by Sam Smith

There is no doubt that, as a financial matter, corporations are the greatest abusers of offshore havens. Nichole Tichon, executive director of the Tax Justice Network, notes that "estimates by the Government Accountability Office show at least 83% of the largest 100 companies have created offshore subsidiaries. . . Offshore tax havens cost the Treasury over $100 billion per year.

In a study cited by the World Bank, Raymond Baker's Global Financial Integrity Program found that two thirds of the offshore havens' business came from corporations and only a third from conventional criminal activity. Just three percent was used to launder bribes. 

Writes Nicholas Shaxson in his excellent new book, Treasure Islands, "This research underlies the point that illicit offshore flows of money are far less about the drug smugglers, Mafiosi, celebrity tax exiles, and fraudsters of the popular imagination and mostly about corporate activity."

Which is fine as long as you're only comparing fiscal impacts. But consider that three percent of $100 billion is $3 billion - and that's just the taxes that aren't being paid on bribes and other funny money. Add to this the fact that these funds are having a political as well as a financial effect. And that it takes a lot less money to buy a politician than it does to make a major corporate tax burden disappear. 

I recently came something I had previously written that included this paragraph:

"In the 1930s, Hot Springs represented the western border of organized crime in the U.S with the local syndicate headed by Owney Madden, a New York killer who had taken over the mob's resort in Arkansas. Owney Madden was an English born gang member who had been arrested more than 40 times in New York by the time he was 21. Madden got the assignment from his boss, Myer Lansky. The plan for Arkansas was modeled on an earlier one in which Governor Huey Long opened a Swiss bank account into which the mob would put $3 to $4 million annually for the right to run casinos in the state."

Two things jumped out. First, the use of offshore havens goes back at least 80 years. Second, one of its early manipulators was a politician looking for a place to hide his illegal money. 

If Huey Long could use offshore money laundering in 1932 to handle $3-4 million in annual bribes, how many politicians and other public officials are currently using the same techniques and with how much money?

Here's how RT Naylor described it in Hot Money & the Politics of Debt:

||||| The Lansky operation perfected the technique of the 'loan-back.' The first stage involved moving funds out of the U.S. Although couriers carrying cash were the favorite vehicle, money could also be moved abroad in the form of traveler's checks, cashier's checks, stocks with nominee ownership, bearer bonds, and even blank airline tickets. . . .

Once safely behind the screen of Swiss bank secrecy laws, the money was ready to return home, with its origins and nature in disguise. Sometimes it stopped en route in a Liechtenstein anstalt (an anonymous company with a single secret shareholder). In the final stage, the initiator of the cycle 'borrowed' the funds from the anstalt or directly from the Swiss bank, repaying the 'loan' with interest - to himself - while deducting the interest from his taxable income as a business expense." ||||

Philip Brewer, in How to Launder Money, gives more details: 

|||| First, you need to make the money disappear. Second, you need to make it reappear in some gradual fashion that doesn't bring it to the attention of whoever you're trying to hide it from…

If you really want to be able to invest the money, get it overseas. . . .There are plenty of fancy, complex ways to get the money overseas, that mostly require an accomplice. The most basic is an invoice scam. Establish a business that imports or exports something. Meet with your customer or supplier and arrange with him to either over-pay or under-bill, and then to have your counterpart deposit (most of) the excess into your foreign bank account.. . . 

If you've got the money overseas somewhere, bring it back in some way that makes it legit. The easiest would be to create an overseas company that then hires you to do something. You do whatever it is and send an invoice whenever you want some cash. You can also reverse the invoice scam that let you get the money overseas in the first place--now you under-pay (or over-bill), while making up the difference out of your foreign bank account. A third option is a fake loan where you "borrow" the money and then simply fail to pay the money back.

If you can't wait to reappear the money gradually, and the amount involved isn't too big, you can always use a simple casino scam. Go to a casino and buy some chips. Do a little low-risk gambling. (For example, bet each chip, one at a time, on red. Do that 20 or 30 times and you'll have about the same amount you started with.) Get a few more chips and repeat. Play a few different games (blackjack, craps, slots). Ideally, go to several different casinos and repeat the whole process there. Eventually, cash in all your chips and go home with a story about how you won a bunch of money at roulette. Pay taxes on your winnings. ||||

Well before concerns about corporate tax havens were being seriously raised, money was flowing to and fro in this fashion. The drug cartels sent cash out of America, writes Shaxson, "in shrink wrapped bills loaded on wooden pallets." And one of the beneficiaries of the system was Richard Nixon whose Committee to Re-Elect The President sent illegal contributions to Mexico, and then sneaked it back through a company in Miami. According to the Solar Navigator website, it was this saga that led the British Guardian newspaper to dub such transactions "laundering." 

A 1998 UN report described another example: 

|||| Franklin Jurado, a Harvard-educated Colombian economist, pleaded guilty to a single count of money laundering in a New York federal court in April 1996 and was sentenced to seven and a half years in prison. Using the tools he learned at America's top university, he moved $36 million in profits, from US cocaine sales for the late Colombian drug lord Jose Santacruz-Londono, in and out of banks and companies in an effort to make the assets appear to be of legitimate origin.

Jurado laundered the $36 million by wiring it out of Panama, through the offices of Merrill Lynch and other financial institutions, to Europe. In three years, he opened more than 100 accounts in 68 banks in nine countries: Austria, Denmark, the United Kingdom, France, Germany, Hungary, Italy, Luxembourg, and Monaco. Some of the accounts were opened in the names of Santacruz's mistresses and relatives, others under assumed European-sounding names.

Keeping balances below $10,000 to avoid investigation, Jurado shifted the funds between the various accounts. He established European front companies with the eventual aim of transferring the "clean" money back to Colombia, to be invested in Santacruz's restaurants, construction companies, pharmacies and real estate holdings. ||||

Wikipedia puts some numbers on it all: "Tax havens have 1.2% of the world's population and hold 26% of the world's wealth, including 31% of the net profits of United States multinationals. . . The IMF has said that between $600 billion and $1.5 trillion of illicit money is laundered annually, equal to 2% to 5% of global economic output."

While the illegal drug trade might not compete in numbers with corporate tax laundering, it is hardly insignificant. Its size has been estimated at $400-$500 billion, roughly that of the legal pharmaceutical industry or twice as large as Saudi Arabia's annual oil exports. 

What is astounding about this is that an industry so big would have - at least if you only listen to law enforcement and the media - no lobbyists in Washington, no political agenda and make no contributions to politicians. Based on the way the story is being told to America, the illegal drug trade must be the most politically ethical business in the land. 

In fact, of course, the money and its travels are just well hidden and nobody in the establishment really wants you to spend the slightest time worrying about it. Just like nobody in the establishment seems to care that the drug war hasn't worked at all for four decades (money launderer Richard Nixon first used the term in 1971). And just like only a handful seem concerned about offshore tax havens. 

If it were otherwise, then there would have been far more interest when an investigator discovered in the 1990s that the Development Financial Authority of the drug-infested state of Arkansas had made an electronic transfer of $50 million to a bank in the Cayman Islands. At the time Grand Cayman had a population of 18,000, 570 commercial banks, one bank regulator and a bank secrecy law. It was a favorite destination spot for laundered drug money.

One of those bringing drugs into Arkansas was Barry Seal, then the biggest drug importer in the country. He was murdered and after his death it was found that among his bank accounts was one in the Cayman Islands branch of the Fuji Bank containing $1.6 million. 

There are no culpable names mentioned here, in part because so few in the media or law enforcement have the slightest interest in following the money. 

On the other hand, there is simply no logical reason to assume that politicians and law enforcement officers are somehow exempt from the extraordinary temptations involved in offshore money laundering. Every way that the drug cartels are using offshore financing is also available to corrupt politicians.

Consider, for example, the huge fees some American politicians are paid when they speak abroad. What a great way to launder some money. Or what if the purchasers of those endless political memoirs by failed politicians include mass purchases by corrupt interests? 

So far, we're certainly far more polite about it all than, say, Mexico. But scrape the surface just a bit and you'll find an illegal system as massive and political corrupt as our neighbor to the south. 

And one of the telling signs is that the facts are there but so few in America's establishment or media even want to talk about it.

The Progressive Review/Undernews

by Robert Scheer

The debate over Republicans’ insistence on continued tax breaks for the superrich and the corporations they run should come to a screeching halt with the report in Tuesday’s Wall Street Journal headlined “Big U.S. Firms Shift Hiring Abroad.” Those tax breaks over the past decade, leaving some corporations such as General Electric to pay no taxes at all, were supposed to lead to job creation, but just the opposite has occurred. As the WSJ put it, the multinational companies “cut their work forces in the U.S. by 2.9 million during the 2000s while increasing employment overseas by 2.4 million, new data from the U.S. Commerce Department show.”

General Electric, which was bailed out by taxpayers and which stored so much of its profit abroad that it paid no taxes for the past two years, was forced to tighten up, but while cutting its foreign workforce by 1,000 it cut a far more severe 28,000 in the United States. Jeffrey Immelt, the CEO of GE, recently appointed by President Barack Obama as his chief outside economic adviser, admits that this does not involve poorly paid work that Americans don’t want, but instead prime jobs: “We’ve globalized around markets, not cheap labor. The era of globalization around cheap labor is over. Today we go to China, we go to India, because that’s where the customers are.”

There is a bitter irony in that statement given that consumer purchasing power is down in the U.S. thanks to the devastating collapse of a housing bubble GE Capital fed with suspect mortgage financing that provided the company with well over half of its profits before the crash. The loss of well-paying jobs at multinationals like GE to other nations—54 percent of the GE workforce is foreign—exacerbates the plight of U.S. consumers while making the foreign customers even more attractive.

Of course it will be argued that multinational corporations have the right to arrange their business as they see fit in order to maximize profit. But if that is the case, do beleaguered American taxpayers have to foot the bill? When those corporations run into trouble overseas because of financial hustles or hostile locals and need the diplomatic and military might of the U.S. government to protect their interests abroad, it is again the U.S. taxpayer who must pay to maintain this new world order. It is an order, as we see with three current wars and a military budget that rivals Cold War highs, that is contributing mightily to the U.S. government debt. More than half of all discretionary spending, the dollars that the Republicans in Congress now want to take out of needed domestic programs, is accounted for by defense spending. That defense spending to support a massive network of military bases and deployed weapons and troops is key to establishing an order in which the interests of American corporations are attended to. If the companies don’t feel that way, let them operate under the flag of Liberia or the Cayman Islands.

No less important than U.S. military muscle is the power of the American government to construct and enforce a worldwide trade and finance structure to the advantage of U.S.-based multinational corporations. That is why the companies spend so much money lobbying Congress on matters ranging from regional trade agreements to international banking regulations. It is precisely the impact of trade agreements like NAFTA that has facilitated the erosion of well-paying jobs. And it was the deregulation of international banking standards, led by the U.S. Treasury Department under the past five presidents, that created the conditions for the recent disastrous housing and banking meltdown.

Big government, the devil that Republicans love to inveigh against, is big precisely because it is so active in so many costly ways in serving the interests of our biggest corporations. Corporate lobbyists attest with their every breath that big government and big business are bedmates in a bountiful venture that impoverishes the rest of us. It is time to admit that we are, in practice if not surface appearance, close to the Chinese communist model of state-sponsored capitalism that sacrifices the interests of ordinary workers, be they in the public or private sector, for the exorbitant profits of the superrich. It is the corporations that need big government to protect their interests, and one would hope they would be willing to pay for the services that their government so faithfully renders to make them obscenely wealthy as it studiously ignores the well-being of the rest of us.

by Michael Winship

Nothing is certain but death and taxes, it used to be said, but in the madcap times we live in, even they're up for grabs.

No matter what proof the White House provides that Osama bin Laden indeed has had his bucket kicked -- and at this point even al Qaeda admits he's dead -- there still will be uncertainty. Whether they ever release those damned photos or not, a lunatic few will continue to insist that Osama's alive and well and running a Papa John's Pizza in Marrakesh.

As for taxes, having to pay them is no longer a sure thing either, especially if you're a corporate giant like General Electric, with a thousand employees in its tax department, skilled in creative accounting. You'll recall recent reports that although GE made profits last year of $5.1 billion in the United States and $14.2 billion worldwide they would pay not a penny of federal income tax. Chalk it up to billions of dollar of losses at GE Capital during the financial meltdown and a government tax break that allows companies to avoid paying US taxes on profits made overseas while "actively financing" different kinds of deals.

It gets worse. In 2009, Exxon-Mobil didn't pay any taxes either, and last year, they had worldwide profits of $30.46 billion. Neither did Bank of America or Chevron or Boeing. According to a report last week from the office of the New York City Public Advocate, in 2009, the five companies, including GE, received a total of $3.7 billion in federal tax benefits.

As The New York Times' David Kocieniewski reported in March, "Although the top corporate tax rate in the United States is 35 percent, one of the highest in the world, companies have been increasingly using a maze of shelters, tax credits and subsidies to pay far less... Such strategies, as well as changes in tax laws that encouraged some businesses and professionals to file as individuals, have pushed down the corporate share of the nation's tax receipts -- from 30 percent of all federal revenue in the mid-1950s to 6.6 percent in 2009."

What's greasing the wheels for these advantages is, hold on to your hats, cash. Over the last decade, according to the NYC public advocate's report, those same five companies -- GE, Exxon-Mobil, Bank of America, Chevron and Boeing -- gave more than $43.1 million to political campaigns. During the 2009-2010 election cycle, the five spent a combined $7.86 million in campaign contributions, a 7 percent jump over their 2007-2008 political spending.

"These tax breaks were put in place to promote growth and create jobs, not bankroll the political causes of corporate executives," Public Advocate Bill de Blasio said. "... No company that can afford to spend millions of dollars to influence our elections should be pleading poverty come tax time."

And by the way, those campaign cash figures don't even include all the money those companies funneled into the 2010 campaigns via trade associations and tax-exempt non-profits. Thanks to the Supreme Court Citizens United decision, we don't know the numbers because, as per the court, the corporate biggies don't have to tell us. Imagine them sticking out their tongues and wiggling their fingers in their ears and you have a pretty good idea of their official position on this.

Meanwhile, last week Republicans like Utah's Orrin Hatch, ranking member of the US Senate Finance Committee, grabbed hold of an analysis by Congress' nonpartisan Joint Committee on Taxation and wrestled it to the ground. The brief memorandum reported that in the 2009 tax year 51 percent of all American taxpayers had zero tax liability or received a refund. So why, the Republicans asked, are Democrats and others so mean, asking corporations and the rich to pay higher taxes when lots of other people -- especially the poor and middle class -- don't pay taxes either?

Hatch told MSNBC, "Bastiat, the great economist of the past, said the place where you've got to get revenues has to come from the middle class. That's the huge number of people that are there. So the system does need to be revamped... We have an unbalanced tax code that we've got to change."

All of which flies in the face of reality. As Travis Waldron of the progressive ThinkProgress website explained, "The majority of Americans who do not pay federal income taxes don't make enough money to qualify for even the lowest tax bracket, a problem made worse by the economic recession. That includes retired Americans, who don't pay income taxes because they earn very little income, if they earn any at all.

"And while many low-income Americans don't pay income taxes, they do pay taxes. Because of payroll and sales taxes -- a large proportion of which are paid by low- and middle-income Americans -- less than a quarter of the nation's households don't contribute to federal tax receipts -- and the majority of the non-contributors are students, the elderly, or the unemployed."

What's more, ThinkProgress notes, "The top 400 taxpayers -- who have more wealth than half of all Americans combined -- are paying lower taxes than they have in a generation, as their tax responsibilities have slowly collapsed since the New Deal era.”  In the meantime, "working families have been asked to pay more and more."

So maybe death and taxes are no longer certain, but one thing remains as immutable as the hills. In the words of another golden oldie, there's nothing surer -- the rich get rich and the poor get poorer.

by Paul Buchheit

Squeezing, gouging, soaking, it's all the same, and it's all wrong. The richest Americans, we hear it said, pay most of the federal income taxes. That's true. But since 1980 their AFTER-TAX SHARE of America's income has TRIPLED. That's a trillion dollars a year in extra income for the wealthiest 1%. 

A trillion dollars is seven times more than the budget deficits of all 50 states combined. 

A trillion dollars, if it hadn't been redistributed to the rich, would provide an extra $10,000 a year for every family that has contributed to American productivity since 1980. 

The defenders of unlimited wealth insist that the very rich have earned their money. But what does EARN mean? Does it mean that the million richest families worked harder than the other 99 million families for thirty years? Does it mean that one man can bet against the mortgage industry and make enough money to pay the salaries of 100,000 health care workers? Does it mean using American research and infrastructure and national security to build a corporation that pays zero federal income taxes? 

Most of the fortunate 1% benefited from tax cuts, financial system de-regulation, ownership of 50% of the stock market, and a 15% capital gains tax. According to a study by the University of California, in 2008 only 19% of the income reported by the 13,480 individuals or families making over $10 million came from wages and salaries. 

The very rich claim that their income growth stimulates the economy. But it hasn't happened. Low-income earners spend a greater percentage of their overall income on consumption, but they have less purchasing power than they had thirty years ago. 

What the very rich won't admit is that they benefit the most from government-funded research, national security, infrastructure, property rights, and a financial industry tailored to their pleasure and profit. 

Instead, they claim that anyone can be rich if only they work hard. Much of America wouldn't know if this is true. They haven't had a chance to work lately.

WASHINGTON - Twenty-five of the 100 highest paid U.S. CEOs earned more last year than their companies paid in federal income tax, a pay study said on Wednesday.

It also found many of the companies spent more on lobbying than they did on taxes.

At a time when lawmakers are facing tough choices in a quest to slash the national debt, the report from the Institute for Policy Studies (IPS), a left-leaning Washington think tank, quickly hit a nerve.

After reading it, Democratic Representative Elijah Cummings, ranking member of the Committee on Oversight and Government Reform, called for hearings on executive compensation.

In a letter to that committee's chairman, Republican Darrell Issa, Cummings asked "to examine the extent to which the problems in CEO compensation that led to the economic crisis continue to exist today."

He also asked "why CEO pay and corporate profits are skyrocketing while worker pay stagnates and unemployment remains unacceptably high," and "the extent to which our tax code may be encouraging these growing disparities."

In putting together its study, IPS chose to compare CEO pay to current U.S. taxes paid, excluding foreign and state and local taxes that may have been paid, as well as deferred taxes which can often be far larger than current taxes paid.

The group's rationale was that deferred taxes may or may not be paid, and that current U.S. taxes paid are the closest approximation in public documents to what companies may have actually written a check for last year.

$16.7 MILLION AVERAGE

Compensation for the 25 CEOs with pay surpassing corporate taxes averaged $16.7 million, according to the study, compared to a $10.8 million average for S&P 500 CEOs. Among the companies topping the IPS list:

* eBay whose CEO John Donahoe made $12.4 million, but which reported a $131 million refund on its 2010 current U.S. taxes.

* Boeing, which paid CEO Jim McNerney $13.8 billion, sent in $13 million in federal income taxes, and spent $20.8 million on lobbying and campaign spending

* General Electric where CEO Jeff Immelt earned $15.2 million in 2010, while the company got a $3.3 billion federal refund and invested $41.8 million in its own lobbying and political campaigns.

Though the companies come from different industries, their tax breaks fall into two primary areas.

Two-thirds of the firms studied kept their taxes low by utilizing offshore subsidiaries in tax havens such as Bermuda, Singapore and Luxembourg. The remaining companies benefited from accelerated depreciation.

Shareholders have responded favorably when companies in which they invest keep a tax bill low through legal methods, thereby benefiting earnings. But Chuck Collins, an IPS senior scholar and co-author of the report, said that is a mistake.

"I think it's an exposure of weakness in a company if their profitability is dependent on their accounting department and not on making better widgets," he said.

In prior reports, Collins said, out-sized CEO pay was often a red flag of bigger problems to come. The IPS has been putting a pay report together for 18 years. Among those whose leaders have made the high pay list in years past, only to have their businesses falter: Tyco, Enron and WorldCom.

(Editing by Howard Goller and Todd Eastham)