Saturday, June 15, 2013

NOT JUST APPLE: CORPORATIONS ROTTEN TO THE CORE


I'm not really picking on Apple in regard to corporate tax evasion; the problem is systemic in our country. But let's start with Apple, because I'm in a shaming mood!

Tim Cook, the Apple CEO, passed out the crying towels at a recent Senate hearing. Poor Apple, he said; they would like to bring their obscene (OK, I added that word) profits home to the US of A, but our corporate tax rate is too high. Give me a break!

Apple has stashed $100,000,000,000 (that's one hundred billion) dollars in Irish banks, where they don't pay taxes. This is $100 Billion in profit. So let's do the math, shall we: if Apple brought that $100 B back to the USA, they would pay about 35% tax on it, or $35 Billion. And then, sob, they would only have $65 Billion in profit left. Poor Apple! 

Let's put this in perspective. All 4 of my grandkids go to school in buildings that are 100 years old. These are buildings made of brick; they are death traps when the big earthquake hits - the one we know will happen. So let's assume that a brand new, modern, high tech and SAFE school building costs $20 million. The 35% tax on Apple's $100 Billion could build 1,750 brand new, safe school buildings! And what the hell, they could throw in an iPad mini for every kid, too! 

I'm sorry Apple, I like your computers (I'm using a MacBook now), but you suck. And just so you think I'm not picking on Apple, all the other big corporations suck, too. Because they all do the same thing. And it's legal. Do you now why it's legal? Because the corporations have armies of lawyers and lobbyists who make sure that tax evasion is legal. 

Corporations suck the tax blood out of America. It's part of doing business. How often do you read about some big corporation shopping around for the best deal on a place to build a new factory, server farm, call center, etc.? By "best deal" I mean the largest package of economic discounts by a city, county and/or state. Whatever public entity gives them the best deal will be the lucky winner, and the lure is JOBS. Unfortunately, as documented by the New York Times, this is very often a con game, where the tax payers are the big losers. A Times investigation has examined and tallied thousands of local incentives granted nationwide and has found that states, counties and cities are giving up more than $80 billion each year to companies. The beneficiaries come from virtually every corner of the corporate world, encompassing oil and coal conglomerates, technology and entertainment companies, banks and big-box retail chains.

According to the NY Times interactive database (go to the link above and spend some time clicking around - this is truly fascinating), my State of Oregon spends $865 million per year on incentive programs - or giveaways to corporations. The Times identified 48 companies in the $100 Million Club - each has received more than that amount in state incentives since 2007.  Apple is one of the members of that club. Apple has received at least $119 million from 3 states. The State of Nevada paid Apple $89 million to build a data center in Reno that is supposed to employ 241 people. So Nevada paid more than $369,000 for each job. It's a good thing Apple can stash that $100 Billion profit in Ireland and not pay taxes in the USA! 

But let's be fair here, and pick on Microsoft. Microsoft received $312 million from 4 states.  And Google, and Amazon, and....oh hell, let's just show you the members of the $100 Million Club:

What we need in this country is state governments who "just say no!" Why should we give money to wealthy corporations to incentivize them to build something in our state? They don't need the tax break or loan or grant. They are simply greedy blood suckers who play the game because they can get away with it. 

If I was in charge, I would say to these guys "No, we will not give you any tax or other incentives. But I'll tell what we will give you; we will give you the opportunity to build in one of our great communities, pay taxes just like everyone else, AND, the opportunity to build one new school building in our state every year using a small fraction of your annual profit. Take it or leave it!"

 People, this has to stop. Corporations should pay their fair share of taxes. Look at this chart:


Notice that the corporate income tax has steadily dwindled since 1950. Yes, corporations pay part of the payroll taxes, but even so, individual income and payroll taxes account for an ever growing share of tax revenues: 63% now, compared to 45% in 1950. And corporate income tax now accounts for 17% of total tax revenue, down from 32% in 1950. 

This is a very complex issue, and my post is just the tip of the iceberg. Sure, corporations create jobs, but only when it works for their bottom line. And don't forget, corporate lobbyists basically write the tax code and other laws that corporations live by; and corporations and their executives, through huge contributions to candidates and PACs, select the candidates who run for office. 

Of, by and for the People? Not a chance! 


No comments:

Twitter