Uncategorized — November 4, 2011 at 12:41 pm

Republicans say “no new taxes” – for 30 of the most-profitable companies, that means NO taxes at all


I’m getting a bit weary of the obnoxious political commentary suggesting that the Occupy movement is full of spoiled brats with plenty of money. The reality is that many people in the middle class, people like me, for instance, are one or two missed paychecks from losing everything. President Obama and the Democrats want to put people to work on infrastructure building and repair but the Republicans won’t let it through because it puts a paltry 0.7% tax on the super-wealthy. Frankly, these people wouldn’t even notice it but it’s a bridge too far, so to speak, for the plutocratic GOP.

What’s really at stake here, of course, is fairness. Take a look at this graph for starters:

Chart credit: Mother Jones

Here’s what I wrote about that graph in my piece today at A2Politico (which includes a fascinating interview with Brad Langerak who started the We are the 99% Michigan Tumblr website):

Chances are pretty good that you’re surfing on that red line at the bottom. If that’s the case, over the past 30+ years, you probably haven’t seen a hell of a lot of improvement in your income. But if you’re part of the elite, the proverbial “1%?” If that’s you, congratulations! Your situation has very likely improved very much.

When the economy crashed a few years back thanks to the failure or near-failure of our nation’s largest banks, American taxpayers ponied up to save the bankers’ asses. Think about this, too: whom do you think would have gotten hurt the worst if banks that were “too big to fail” had, in fact, failed? Not you and me down here in Ninety-Nine Percentville. The folks breathing the rarefied air of One-Percentville, however, would have felt it acutely. But, not to worry. Us ninety-nine percenters made sure they were fine.

And what did we get in return? Well, frankly, not a damn thing. Nothing has really changed. The banks remain unregulated. They haven’t so much as thanked American taxpayers for their largesse. Hell, Bank of America recently tried to put a five dollar monthly fee on debit card usage. I can just about guarantee you that most one-percenters don’t use debit cards – that was aimed straight at ninety-nine percenters like you and me. Only after massive push-back, motivated in part by the Occupy movement, did BofA back down.

And what about all those bankers that played roulette with other people’s money and nearly put our country into a depression? Not one of them has so much as gone to court much less jail for what they did to the global economy. Meanwhile, thousands of Occupy protesters surely have.

It’s the unfairness that the super-wealthy are doing so well while the rest of languish and are forced to clean up and pay for their messes that has so many of us outraged.

To add to that outrage, Citizens for Tax Justice released report yesterday that shows just how screwed up our system has gotten.

A comprehensive new study that profiles 280 of America’s most profitable companies finds that 78 of them paid no federal income tax in at least one of the last three years. Thirty companies enjoyed a negative income tax rate over the three year period, despite combined pre-tax profits of $160 billion. These are among the findings in “Corporate Taxpayers and Corporate Tax Dodgers, 2008-2010,” released today by Citizens for Tax Justice and the Institute on Taxation and Economic Policy.

“These 280 corporations received a total of nearly $223 billion in tax subsidies,” said Robert McIntyre, Director at Citizens for Tax Justice and the report’s lead author. “This is wasted money that could have gone to protect Medicare, create jobs and cut the deficit.”

  • The average effective tax rate for all 280 companies in the study over the three year period was 18.5 percent; for the period 2009-2010 it was 17.3 percent, less than half the statutory rate of 35 percent.
  • 78 of the companies enjoyed at least one year in which their federal income tax was zero or less.
  • 30 companies enjoyed a negative income tax rate over the entire three year period on their combined pre-tax profits of $160 billion.
  • Total tax subsidies given to all 280 profitable corporations amounted to $222.7 billion from 2008-2010.
  • Wells Fargo tops the list of 280 U.S. corporations receiving the most in tax subsidies, getting nearly $18 billion in tax breaks from the U.S. treasury in the last three years.
  • Pepco Holdings had the lowest effective tax rate of all the companies in the study, at negative 57.6 percent over the three year period.
  • Some companies within sectors fare worse than others. For example, the report finds that FedEx paid a 0.9 percent tax rate over the three year period while its competitor, UPS, paid a 24.1 percent rate.
  • While retailers and wholesalers in the study generally pay average effective tax rates of about 30 percent, Amazon.com paid a rate of only 7.9 percent on its $1.8 billion in profits from 2008-2010.
  • Financial services received the largest share (16.8 percent) of all federal tax subsidies over the last three years. More than half of federal corporate tax subsidies for companies in the study went to four industries: financial services, utilities, telecommunications, and oil, gas & pipelines.
  • The top ten defense contractors saw their combined tax rate decline from 19.3 percent in 2008 to a mere 10.6 percent rate in 2010.
  • U.S. corporations with significant (ten percent or more of their total worldwide profits) foreign profits paid tax rates to foreign countries that were almost a third higher than they paid to the IRS on their domestic profits.

You can read the executive summary of their report HERE and the full report is HERE (both are pdf files.)

It’s pretty astonishing that these companies are getting away without paying corporate taxes. What’s more astonishing is that some of them are actually getting tax refunds from the federal government. Seriously, look at this (from the report):

So, don’t give me this bullshit that OWS protesters are a bunch of whining rich kids. That dog won’t hunt. This is about fairness and equity and getting our country back on a path where everybody gets a fair shot to achieve the American dream. The fact is, the one-percenters know this and they are scared as hell that the rest of us have figured it out.

And, remember: they only call it class war now that we’ve started to fight back.

Read my piece at A2Politico for more.