By Paul Buchheit
The betrayals come in many
forms. Here are a few of the more outrageous, and destructive,
examples:
Evasion: Corporations
suddenly stopped meeting their tax responsibilities
While corporate profits have
doubled to $1.9 trillion in less than ten years, the corporate income tax rate,
which for thirty years hovered around the 20-25% level, suddenly dropped to 10%
after the recession. It has remained there for three years.
We are seeing a manifestation
of the Shock Doctrine. Corporations are using the national emergency of the
financial collapse to make a statement about taxes, and a traumatized nation is
too preoccupied to do anything about it.
Delusion: Technology
companies won't admit that much of their 'innovation' is due to public
assistance
According to the report
Funding a Revolution, government provided almost half of basic research funds
into the 1980s. Federal funding still accounted for half of research in the
communications industry as late as 1990. Even today, the federal government
supports about 60 percent of the research performed at universities.
Apple's first computer was
introduced in the late 1970s. Apple still does most of its product and research
development in the United States, with US-educated engineers and computer
scientists.
Google's business is based on
the Internet, which started as ARPANET, the Defense Department's Advanced
Research Projects Agency computer network from the 1960s. The National Science
Foundation funded the Digital Library Initiative research at Stanford University
that was adopted as the Google model.
Apple got its tax bill down to
9.8% last year. About 2/3 of its profits remain overseas for tax avoidance
purposes. Google, like Apple, avoids taxes by moving most of its foreign profits
through Ireland and the Netherlands to Bermuda. Both Apple and Google, along
with Microsoft and Cisco, are lobbying for a repatriation tax holiday to allow
billions of overseas dollars to come home at a greatly reduced tax
rate.
An Apple executive said: "We
don't have an obligation to solve America's problems." That may be true, but
they do have an obligation to pay the taxes that help America solve its
problems.
Desertion: The people
who benefit most from government are renouncing their citizenships to avoid
taxes
Perhaps the ultimate insult to
America is to just quit on your country after making a fortune off of it. In
2011 almost 1,800 Americans gave up their citizenship to avoid taxes.
The wealthy benefit
disproportionately from property and inheritance laws, contracts, stock
exchanges, favorable SEC regulations, the Small Business Administration, patent
and copyright and intellectual property laws, estate planning, trust funds,
Internet marketing, communications infrastructure, highway maintenance, air
traffic control, local and national security, and 60 years of research in
technology and other industries.
A recent outrageous example is
Facebook part-owner Eduardo Saverin, whose family came to America from Brazil
partly for safety reasons, and who happened to land Mark Zuckerberg as a
roommate at Harvard. Now after falling into billions, he's decided to renounce
his U.S. citizenship to avoid taxes.
Denial: Traders feel
it's inappropriate to pay even a tiny tax on a quadrillion dollars in
sales
A quadrillion dollars sounds
like a fake amount. But it's all too real. That's a thousand trillion dollars of
derivatives transactions which, along with the high-frequency computer-generated
transactions (5,000 per second) that make up over half of U.S. stock trades,
contributed to a financial meltdown and a $3 trillion bailout for reckless
trading.
But there's no tax on these
transactions.
While average Americans pay a
10% sales tax on necessities, millionaire investors pay just a .00002% SEC fee
(2 cents for every thousand dollars) for a financial instrument. And their
supporters claim, inexplicably after the disastrous trading frenzy in 2008, that
a tax would increase volatility.
Illusion: The media
leads us to believe we should all be cheering when the stock market is
booming
Conservatives insultingly
assure us that the "democratization of stock ownership" is gradually making
America more equal, as evidenced by the flattening of wealth ownership among the
richest 1% in recent years. So we should all be excited about a rising stock
market.
Here are the facts. Data from
Edward Wolff confirms that from 1983 to 2007 the percentages of net worth and
financial wealth for the top 1% remained steady. But the percentages for the
rest of the richest 5% increased by almost 20%, while the percentages for the
lowest 80% of the population DECREASED by almost 20%.
In other words, the share of
wealth owned by the top 1% leveled off because the "democratization of stock
ownership" spread the wealth among just 5% of the population, those earning an
average of $500,000 per year. A few people -- 5 out of 100 -- got very rich, but
everyone else lost ground.
Conclusion
The issues are difficult to
address with Congress largely on the side of the wealthy. At the very
least:
(1) Eliminate the tax break on
unearned income (capital gains). The richest Americans, who own most of the
stocks, should not pay a smaller tax than everyone else.
(2) Implement a small
financial transactions tax. It would be easy to administer on computer trades,
it would generate hundreds of billions of dollars in revenue, and it would help
guard against the reckless speculation that devastated the financial markets and
our country.
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