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Corporate Greed

department of treasury

Respectfully submitted by Lawrence E. Rafferty (rafflaw) Weekend Contributor

Now that we have celebrated Thanksgiving, I was struck by the news that Congress is considering legislation that would grant large tax breaks to corporate citizens and actually remove tax breaks for the poor and the middle class.

‘ “This Congress seems willing to give huge tax cuts to big businesses—who are already doing better than ever—but somehow can’t prevent tax increases on 50 million working Americans that will occur when expansions of the Earned Income Tax Credit and Child Tax Credit expire,” Harry Stein, the Associate Director for Fiscal Policy at American Progress Action Fund, told ThinkProgress. “This is a great deal for CEOs and a terrible deal for struggling families.”’ Nation of Change 

One of the most amazing aspects of the proposed legislation is that it was reached as a compromise between Republicans and Democrats in the Senate.  In light of the hug tax breaks for corporations, one is left wondering, just what did the poor and the middle class get in this “compromise”? The answer to that question is, not much.

“Under the terms of the $444 billion agreement, lawmakers would phase out all tax breaks for clean energy and wind energy but would maintain fossil fuel subsidies. Expanded eligibility for the Earned Income Tax Credit and the Child Tax Credit would also end in 2017, even though the Center for Budget and Policy Priorities estimates that allowing the provisions to expire would push “16 million people in low-income working families, including 8 million children into — or deeper into — poverty.” The proposal would help students pay for college by making permanent the American Permanent Opportunity Tax Credit, a Democratic priority.

Meanwhile, two-thirds of the package would make permanent tax provisions that are intended to help businesses, including a research and development credit, small business expensing, and a reduction in the S-Corp recognition period for built-in gains tax.

The costs of the package will not be offset.” Nation of Change

As I understand the proposed “compromise”, large corporations that in many cases do not pay any taxes, will get 2/3rds of the tax breaks outlined in the legislation, including fossil fuel corporations, at the expense of clean energy.  If you are a large corporation, especially those that deal in fossil fuels, your Christmas may have come early this year. But don’t worry, it seems that in many ways, corporate citizens enjoy the ability to avoid Federal taxes entirely and in some cases, actually get money back from the government! All while not paying any Federal taxes.

If you need some examples of corporations hitting the tax jackpot, you need to look no further than here.  I guess it really pays off to be a corporation when it comes to tax time.

“It seems incomprehensible that Boeing, Ford, Chevron, Citigroup, Verizon, JP Morgan, and General Motors, with a combined income last year of $74 billion, would pay no taxes, and in fact receive a combined refund of nearly $2 billion. The data comes from a new study called Fleecing Uncle Sam, which goes on to note that the unpaid taxes of almost $26 billion could pay for Pre-K education for every 4-year old in America.” NOC

The good news is not everyone in Washington is going along with the proposed compromise.  The Treasury Secretary, Jack Lew has blasted the proposal.

“On Monday, Treasury Secretary Jack Lew also blasted the emerging agreement as “fiscally irresponsible” and doing “very little for working families.” He said, “Any deal on tax extenders must ensure that the economic benefits are broadly shared. We are committed to working with Congress to address the issue in a manner that is fiscally responsible and extends critical tax benefits for working families.” Nation of Change

President Obama also threatened a veto if the legislation, as currently written is approved by lawmakers.  Sen. Harry Reid has also backtracked his original approval of the compromise and “denied it “signed off” on any deal without commenting on the specifics of the story.” Nation of Change

Was Congress expecting that most Americans would be in favor of losing tax benefits to profitable corporations?  Why would any legislator want to give tax legislation “gifts” to corporations which at the same time would harm green energy firms and millions of individuals?

Don’t the Waltons and the Koch Brothers already make enough money?  And in the case of the Koch Brothers, much of their earnings are at the expense of our environment, so why give them more tax breaks?

The best answer that I can come up with to those questions is to follow the money. The large corporations and some of the wealthiest individuals and families in America believe in the Gordon Gecko philosophy of “greed is good”.

In my opinion, the House of Representatives and the Senate are wholly owned subsidiaries of these very same corporations and the House and Senate members must deliver the pork to their bosses.  What do you think?

 

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118 thoughts on “Corporate Greed”

  2. Carville and Begala wrote a book saying the Reagan years led to the biggest tax increase in history.

    Since the non-social welfare spending only accounts for about 30% of the national budget, that is a huge transfer payment of wealth. 60-70% is spent on social programs of various kinds.

  7. Karen S – “Jim:

    You are right. I do not blame unions or corporations for the wealthy for buying what is for sale. The politicians make the game and the rules for playing.

    I blame the politicians who sell themselves to the highest bidder. I would love to see reforms in campaign finance, lobbying, as well as our absurd procurement system.”

    Case in point, I’m currently listening to Tom Sullivan discuss internet taxes and how companies are changing their practices. Alibaba is now throwing a wrinkle into the on-line tax. The more the govt. pushes, business will leave the U.S.

  9. Jim:

    You are right. I do not blame unions or corporations for the wealthy for buying what is for sale. The politicians make the game and the rules for playing.

    I blame the politicians who sell themselves to the highest bidder. I would love to see reforms in campaign finance, lobbying, as well as our absurd procurement system.

  10. Lee:

    Brown’s prior robbery is salient as to explaining the actions of the tragic encounter. We are faced with at least two impossible scenarios: One, a cop shot an unarmed black man for no apparent reason. Two, an unarmed black man wrestled for a cop’s gun and then later charged at him when that gun was drawn.

    Neither makes any sense. His history of recent crime, and any prior history of run-ins with police, and his actions towards police during any prior encounters, are pertinent. Because WHY would he have scuffled with a cop in the first place??? That fact alone is indisputable. There WAS a physical altercation partly inside that police car. Mothers everywhere were wondering why in the world a young man would do that to a police officer, because it clearly just escalated a minor situation into life or death. No loving mother would want her child to have an altercation like that with police.

    However, I DO agree with you that the relationship between the community and the police department needs to improve. I do not, however, absolve the community of all responsibility in having an adversarial relationship with the police. With a murder rate that high, there is a lot of valid crime in the area. What can they do to turn their young people away from a life of crime? Not everyone who’s poor turns into a murderer or other criminal. Can programs similar to Harlem Children’s Zone help improve things? Sermons from the pulpit and leadership from within the community? That said, I recall reading a wonderful article, which I will try to find, about a police department that turned its relationship around with a poor, high crime neighborhood. The ubiquitous problem is that a high crime neighborhood tends to view police with mistrust, because the chances are that residents have either been arrested, or had friends or family members arrested. That does tend to put a damper on good feelings towards cops. It was impossible to get witnesses to come forward because no one wanted to snitch. Etc, etc. Well, from what I remembered, cops were assigned to embed in certain areas. They met with the pastors, and other leaders of the community. Forged friendships and relationships. Spoke at schools. Gave their work cell phone # out to people they met. Were open to calls at any hour if someone was in trouble. People were more likely to call someone they knew and trusted than some faceless person at 911. And they slowly came to realize that the police cared about the community. They wanted criminals to stop breaking the law and have a good life. And they wanted kids to grow up outside of gangs and in a safe neighborhood.

    I really have to find that article, because I found it inspiring for what a police department and community could accomplish if it worked together.

  11. Jim:

    I don’t think the government should pick winners and losers in business. It’s clearly not its forte to play venture capitalist, and its grossly unfair to the businesses in the same field who don’t get picked for favoritism.

    I do, however, support grants for research that can improve the lives of everyone, such as cleaner energy. That’s a much nobler goal than some of the grant drivel that gets flung away every year. People would be shocked and appalled if they knew what some of the useless topics taxpayers pay for.

    The organic food movement is booming without government “helping” or mandating its usage. In fact, in spite of “favored” companies like Monsanto beating labeling legislation at every turn, the non-GMO project is growing by astronomical leaps and bounds compared with conventional products. Why? Because that’s what consumers want. And producers will meet that demand, all on their own. And when small producers are over-faced with the high cost of certified organic, they created alternatives, such as Certified Naturally Grown. People find a way.

    Government, whether federal, state, or local, should remember its role is to build and support infrastructure, pass and enforce laws, and pass REASONABLE regulations that actually protect the public and make sense. (An example of absurd regulations are the local restrictions against planting native plants or edible gardens in front yards instead of a lawn.)

  12. Nick and Lee:

    “I have become increasingly concerned about people from BOTH sides of the political spectrum becoming hyper skeptical of people they oppose and blindly accepting of people they like.”

    So true. The public does not do itself any favors when it turns a blind eye to bad behavior by its politicians. There is no character test performed before someone joins a political party. Human nature being what it is, there are bound to be bad apples in any political party, and the career of politician seems to attract more than its share of bad characters.

    Never trust a politician any farther than you can throw him or her. Healthy skepticism and the disinfecting light of scrutiny is our only hope at keeping them (semi) honest.

  14. “which goes on to note that the unpaid taxes of almost $26 billion could pay for Pre-K education for every 4-year old in America.” NOC”

    Why should I have to pay for your kids education let alone pre-k? Or you just can’t wait for the indoctrination to start.

    1. Jim22 – I am opposed to teaching 4 year olds how to use the potty with government funds. Soon we are going to have pre-pre-K. When I went to school K was optional and your parents paid extra for it.

  15. Olly:

    Did your neighbor rent or buy the solar?

    I dislike the renting philosophy, because the installer just took the rebate, and once the unit pays for itself, is making money off of the house.

    My goal is to go solar once the unit will pay for itself within a max of 5 years.

  16. It always cracks me up when politicians complain about selling themselves to the highest bidder. Don’t blame the companies that play the rules a govt. sets up.

  18. SamS … don’t worry, some of us cannot forget about VAT taxes. We had them in Michigan, cleverly called the “Single Business Tax.” It was implemented by a long serving Republican governor (Milliken), who also added a permanent income tax to boot. That governor was a classic Democrat in hiding as most Michigan Republicans were of that time period. Never mind he himself was born into a wealthy family. It is easy to be “progressive” like Milliken was if you didn’t earn what you spend in the first place. It didn’t bother either the Republicans or Democrats to devise a literal tax on labor potential paid from accumulated capital rather than profit…e.g. income. And it WAS a tax on labor here, because there were no exemptions for the costs of labor….e.g., hiring was a difficult choice that you knew could come out of your personal pocket or from retained earnings of your company, not from any gain that hired labor provided. The perfect “politicians’ tax” …always due no matter whether there was a source or not (income).

    It was a closeted VAT by any other name, with zero pass-through credits (you the consumer never got a receipt showing the VAT as they do in Canada) and no refunding, where value added does not include any deduction for cost of labor, nor any assumption of an income from which to pay the tax. In my sojourn in the private sector I twice wrote large checks, as CFO, to the state in loss years …e.g., from retained earnings, or in the case of really small enterprises, from personal savings.

    I assure you the cost of VAT’s like Michigan’s is always passed on, 100 %…no pass through credits … to the consumer in higher prices. Lately, under a new Republican governor, the SBT/VAT has been abolished in Michigan. Now businesses are expected to pay tax based upon income. It is now fair for the small businesses that cannot hide income with spurious exemptions and subsidies that rafflaw has cited in his post.

    When I think of a flat tax, I am not thinking about a “consumption tax” on a national level. That is already extant in many states as Sales Taxes. I think of a flat tax as a flat percentage tax on income, with de-minimus scaling down for low income individuals (a hockey stick anchored on the low end, then flat above a specified level)…none the less some tax on everyone. When half the country has no blood in the game, so to speak, why should they care who else does and pays their taxes for them?

  19. Our system of taxing income is little more than government corruption. The government sets the rules, then creates exceptions, based on what big donors want. Then the government blames the taxed for the corruption of the system the government created.

    Flat tax on gross income, no exceptions or deductions, for all corporations and individuals.

  20. Ah I wondered why you brought it up but I see you do write within the comment you would like to see his records ‘verified’

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