If recent trends in business taxation hold, when I finally get around to writing the check and putting my tax return in the mail, I’ll be contributing more in federal income taxes than the bulk of all U.S. corporations.
Of course, that’s not saying much. It’s not hard to chip in more than zero dollars.
In recent weeks there has been considerable uproar over a story in the New York Tines reporting, “G.E.’s Strategies Let It Avoid Taxes Altogether.” The article stated:
General Electric, the nation’s largest corporation, had a very good year in 2010.
The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.
Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.
That may be hard to fathom for the millions of American business owners and households now preparing their own returns, but low taxes are nothing new for G.E….Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore.
The New York Times story has spawned numerous commentaries and a Facebook page dedicated to all of us who are paying more federal taxes than this corporate behemoth. Of course, this type of thing is not new, and G.E. is not alone in its practices. A 2008 study by the Government Accountability Office showed that the majority of U.S. corporations did not pay federal income taxes in the period between 1998 and 2005.
I’m not aware of a more recent study, so I can’t confirm that this is true for 2010. But there’s no reason to think the trend has changed. If anything, corporations are getting ever more skilled at using offshore shelters and other tax dodges to avoid their obligations. For 2010, Senator Bernie Sanders put out a list of the top tax corporate tax cheats, and Joshua Holland has compiled a similar list over at Alternet.
This corporate tax avoidance should be at the fore of budget debates. Then again, as has been often noted, the Republican budgets being aggressively pursued at both the state and federal level really have little to do with balancing the books. Instead, they represent a clear strategy of upward redistribution.
We saw it with Wisconsin Governor Scott Walker, who handed out $140 million in spending for well-heeled interests before launching an attack against unions in the name of balancing state budgets. And we see it in the federal budget put forward by Rep. Paul Ryan, which slashes services but extends tax cuts for the wealthy. John Bouman and Dan Lesser of the Shriver Center write, “The Ryan plan proposes $4.3 trillion in spending cuts over the next ten years that is entirely offset by $4.2 trillion in tax cuts that overwhelmingly favor the top tax brackets.”
With Washington on the verge of a shutdown, Democrats have agreed to a compromise that would include repugnant budget cuts of $33 billion for the current year. Rep. Tim Griffin, part of the new class of Republican radicals, mocked this number as woefully insufficient, saying to the Washington Post, “It’s like canceling HBO when you can’t afford your house payments. It’s not serious.”
If this is the case, Republican proposals are the equivalent of looking at your overdue mortgage bill and then saying to all your richest friends, “Hey, don’t worry about paying those tens of thousands of dollars you owe me. I want you to keep the money.”
Fortunately, there are organizations calling out Americans to protest this madness. U.S. Uncut, a group modeled after an anti-austerity group in Britain that is targeting UK tax cheats, will be having national days of action over tax weekend, April 15-18.
IN SUMMARY, while too often ignored in our national political debate, there are clear “contradictions between a policy of large tax cuts, on the one hand, and cuts in services to those in the most dire conditions, on the other.”
I didn’t write those words. Rock legend Bruce Springsteen did. God bless him, the man apparently takes time to write articulate letters to the editor of his local New Jersey paper praising well-reported stories about poverty. Springsteen notes:
[T]he cuts are eating away at the lower edges of the middle class, not just those already classified as in poverty, and are likely to continue to get worse over the next few years. I’m always glad to see my hometown newspaper covering these issues.
You’ve got to love The Boss.