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“We Hold These Truths To Be Self Evident”: Real Patriots Pay Taxes

Some of our nation’s biggest corporations are planning a tax holiday and they want you to pick up the tab.

Actually, you already pay for their routine tax avoidance through the use of tax havens in Bermuda, the Cayman Islands and elsewhere. These accounting acrobatics cost the U.S. Treasury $100 billion a year. Now they want Congress to pass a special tax holiday for money they “repatriate” back to the United States.

There’s nothing patriotic about this repatriation being pushed by Google, Cisco, Pfizer and other companies in the Win America campaign. To sell the tax holiday, they claim it will produce a burst of jobs and investment. In fact, Congress passed a “one-time-only” tax holiday in 2004 with similar promises. Instead, it produced a burst of shareholder dividends and stock buybacks, which goosed the pay of CEOs.

Corporations laid off workers and shifted even more income and investment to offshore tax havens in the wake of the 2004 tax holiday.

“Why should we reward firms for successfully gaming the tax system when we in turn are called on to make up the missing tax revenues?” Edward Kleinbard, former chief of staff of Congress’s Joint Committee on Taxation, told Bloomberg. “Much of these earnings overseas are reaped from an enormous shell game: Firms move their taxable income from the U.S. and other major economies — where their customers and key employees are in reality located — to tax havens.”

A favorite accounting trick is transferring a patent from the U.S. parent company to a subsidiary — often a shell company — in a tax haven. Profits from the patent go largely untaxed offshore while the costs of development, marketing and management remain in the U.S., where they are taken as tax deductions.

Pfizer was the largest beneficiary of the last tax holiday, bringing $37 billion back to the United States and paying just $1.7 billion in federal corporate income taxes. It laid off 10,000 American workers in the following months. The U.S. is the world’s most profitable drug market and yet over the last three years, Pfizer — maker of Lipitor, Viagra and much more — has reported $7.9 billion in U.S. losses while claiming $37.8 billion in profits in the rest of the world. Pfizer, like the rest of Big Pharma, is heavily subsidized by taxpayer-funded research at the National Institutes of Health and elsewhere. It should not be rewarded with another tax holiday.

Bloomberg reported that “Google reduced its income taxes by $3.1 billion over three years by shifting income to Ireland, then the Netherlands, and ultimately to Bermuda.” What a corporate ingrate. Google would not exist without the Internet, and the Internet grew out of U.S. government research beginning in the 1960s. In the 1990s, the U.S. National Science Foundation funded the Digital Library Initiative research at Stanford University that Larry Page and Sergey Brin, now billionaires, developed into Google. Brin was also supported by an NSF graduate student fellowship.

Increasingly, U.S. multinational corporations want to benefit from government spending on education, infrastructure, research, health care and so on without paying for it. Today, large corporations pay, on average, 18 percent of their profits in federal income taxes and as a group contribute just 9 percent toward federal government bills, down from 32 percent in 1952. The Congressional Joint Committee on Taxation says a new tax holiday would cost $79 billion.

A dozen national and state business organizations led by Business for Shared Prosperity recently wrote members of Congress urging them to oppose the tax holiday. The letter said, “When powerful large U.S. corporations avoid their fair share of taxes, they undermine U.S. competitiveness, contribute to the national debt and shift more of the tax burden to domestic businesses, especially small businesses that create most of the new jobs.”

There is no excuse for repeating a policy that’s a proven failure. It would be even worse this time around, as corporations would redouble their efforts to shift profits overseas in anticipation of the next tax holiday. Congress should close the tax loopholes that reward companies for transferring U.S. profits, jobs and investment abroad — not encourage them.

Real patriots pay their fair share of taxes. They don’t run out on the bill.

 

By: Holly Sklar and Scott Klinger, CommonDreams.org, July 4, 2011

July 4, 2011 Posted by | Big Business, Big Pharma, Capitalism, Class Warfare, Congress, Conservatives, Corporations, Deficits, Democracy, Economic Recovery, Economy, GOP, Government, Jobs, Lawmakers, Middle Class, Offshore Accounts, Politics, Republicans, Tax Evasion, Tax Liabilities, Tax Loopholes, Taxes, Wealthy | , , , , , , , , , , | Leave a comment

“In The Course Of Human Events”: The Declaration Of Interdependence

 

When, in the course of human events, it becomes necessary for one people to dissolve the political bonds which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness.

Okay, the Declaration of Interdependence sounds a lot like the Declaration of Independence.

By saying that it is a self-evident truth that all humans are created equal and that our inalienable rights include life, liberty, and the pursuit of happiness, our Founding Fathers were telling us that we are all in this together, that we are interdependent, that we have a moral duty to protect these inalienable rights for all humans. President Lincoln, perhaps above all others, was instrumental in making clear that the second sentence of the Declaration was “a moral standard for which the United States should strive,” as Wikipedia puts it.

The double appeal to “Nature” — including the explicit appeal to “the laws of Nature” in the first sentence — is particularly salient. For masters of rhetoric like the authors of the Declaration, a repeated word, especially in an opening sentence, is repeated for the singular purpose of drawing attention to it (see “Why scientists aren’t more persuasive, Part 1“).

Yes, the phrase “laws of nature” meant something different to Jefferson than it does to us (see here). But as a living document, and as a modern Declaration of Interdependence, the words have grown in meaning.

It is the laws of Nature, studied and enumerated by scientists, that make clear we are poised to render those unalienable rights all but unattainable for billions of humans on our current path of unrestricted greenhouse gas emissions. It is the laws of Nature that make clear Americans can’t achieve sustainable prosperity if the rest of the world doesn’t, and vice versa.

Ironically — or perhaps intentionally — the toughest inalienable right to maintain is “the pursuit of happiness.” Certainly, the catastrophic global warming we know we face (thanks to our understanding of the laws of nature) threatens life and liberty (see “Memorial Day, 2030“).

But if we keep listening to the deniers and delayers, if we fail to sharply reverse our current emissions path nationally and globally, then we are headed toward 5°C (9°F) planetary warming by century’s end and 850+ ppm — with sea level rise of 4 to 6 feet or higher, rising perhaps a foot a decade or more for centuries, the U.S. Southwest and one third of the Earth’s habited land a permanent Dust Bowl, half or more species extinct, and much of the ocean a hot, acidic dead zone (see “Intro to global warming impacts: Hell and High Water“).

Not bloody many people will be pursuing “happiness” under those conditions. They will be desperately trying to avoid misery, when they aren’t cursing our names for betraying our moral values.

If we don’t aggressively embrace the clean energy transition starting immediately with the climate bill in front of Congress — and help lead the entire world to a similar transition — then the Ponzi scheme we call the global economy will probably be in some stage of obvious collapse by our 250th anniversary, July 4, 2026.

That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

And so “happiness” is repeated also, underscoring its importance to the Founders. “Life” and “Liberty” are really the very minimum we owe our fellow humans. We have a moral obligation to work toward freedom from want and care for all.

The party of Lincoln has, tragically, abandoned the values embraced and articulated by its greatest thinker and rhetorician — and those embraced and articulated by our Founders in the Declaration see (WashPost: “The GOPs climate-change denial may be its most harmful delusion”).

When is the last time a major conservative politician ever talked about “a decent respect to the opinions of mankind” except to mock the entire notion (see Gingrich sums up GOP ethos: “I am not a citizen of the world! I think the entire concept is intellectual nonsense and stunningly dangerous”).

We live in unique times. We must all hang together or we will surely all hang separately.

Happy Interdependence Day Century!

 

By: Joe Romm, Think Progress, July 4, 2011

July 4, 2011 Posted by | Congress, Conservatives, Constitution, Corporations, Democracy, Economy, Environment, Freedom, Global Warming, GOP, Government, Ideologues, Ideology, Liberty, Politics, Republicans, Right Wing | , , , , , , , , , , | Leave a comment

“Consent” For The Public Good: What Our Declaration Of Independence Really Said

Our nation confronts a challenge this Fourth of July that we face but rarely: We are at odds over the meaning of our history and why, to quote our Declaration of Independence, “governments are instituted.”

Only divisions this deep can explain why we are taking risks with our country’s future that we’re usually wise enough to avoid. Arguments over how much government should tax and spend are the very stuff of democracy’s give-and-take. Now, the debate is shadowed by worries that if a willful faction does not get what it wants, it might bring the nation to default.

This is, well, crazy. It makes sense only if politicians believe — or have convinced themselves — that they are fighting over matters of principle so profound that any means to defeat their opponents is defensible.

We are closer to that point than we think, and our friends in the Tea Party have offered a helpful clue by naming their movement in honor of the 1773 revolt against tea taxes on that momentous night in Boston Harbor.

Whether they intend it or not, their name suggests they believe that the current elected government in Washington is as illegitimate as was a distant, unelected monarchy. It implies something fundamentally wrong with taxes themselves or, at the least, that current levels of taxation (the lowest in decades) are dangerously oppressive. And it hints that methods outside the normal political channels are justified in confronting such oppression.

We need to recognize the deep flaws in this vision of our present and our past. A reading of the Declaration of Independence makes clear that our forebears were not revolting against taxes as such — and most certainly not against government as such.

In the long list of “abuses and usurpations” the Declaration documents, taxes don’t come up until the 17th item, and that item is neither a complaint about tax rates nor an objection to the idea of taxation. Our Founders remonstrated against the British crown “for imposing taxes on us without our consent.” They were concerned about “consent,” i.e. popular rule, not taxes.

The very first item on their list condemned the king because he “refused his assent to laws, the most wholesome and necessary for the public good.” Note that the signers wanted to pass laws, not repeal them, and they began by speaking of “the public good,” not about individuals or “the private sector.” They knew that it takes public action — including effective and responsive government — to secure “life, liberty and the pursuit of happiness.”

Their second grievance reinforced the first, accusing the king of having “forbidden his governors to pass laws of immediate and pressing importance.” Again, our forebears wanted to enact laws; they were not anti-government zealots.

Abuses three through nine also referred in some way to how laws were passed or justice was administered. The document doesn’t really get to anything that looks like Big Government oppression (“He has erected a multitude of new offices, and sent hither swarms of officers to harrass our people, and eat out their substance”) until grievance No. 10.

This misunderstanding of our founding document is paralleled by a misunderstanding of our Constitution. “The federal government was created by the states to be an agent for the states, not the other way around,” Gov. Rick Perry of Texas said recently.

No, our Constitution begins with the words “We the People” not “We the States.” The Constitution’s Preamble speaks of promoting “a more perfect Union,” “Justice,” “the common defense,” “the general Welfare” and “the Blessings of Liberty.” These were national goals.

I know states’ rights advocates revere the 10th Amendment. But when the word “states” appears in the Constitution, it typically is part of a compound word, “United States,” or refers to how the states and their people will be represented in the national government. We learned it in elementary school: The Constitution replaced the Articles of Confederation to create a stronger federal government, not a weak confederate government. Perry’s view was rejected in 1787 and again in 1865.

We praise our Founders annually for revolting against royal rule and for creating an exceptionally durable system of self-government. We can wreck that system if we forget our Founders’ purpose of creating a representative form of national authority robust enough to secure the public good. It is still perfectly capable of doing that. But if we pretend we are living in Boston in 1773, we will draw all the wrong conclusions and make some remarkably foolish choices.

By: E. J. Dionne, Opinion Writer, The Washington Post, July 3, 2011

July 4, 2011 Posted by | Congress, Conservatives, Constitution, Democracy, Equal Rights, Freedom, GOP, Government, Government Shut Down, Ideologues, Ideology, Lawmakers, Liberty, Politics, Populism, Public, Republicans, Revolution, Right Wing, States, Taxes, Tea Party | , , , , , , , , , , , , | Leave a comment

Executive Pay: We Knew They Got Raises. But This?

It turns out that the good times are even better than we thought for American chief executives.

Among the executives who registered huge gains in the value of their company stock and options in 2010 were Warren E. Buffett, the chief executive of Berkshire Hathaway, top, Lawrence J. Ellison of Oracle, center, and Jeffrey P. Bezos of Amazon.com. Together, the three men’s holdings climbed by more than $13 billion for the year.

A preliminary examination of executive pay in 2010, based on data available as of April 1, found that the paychecks for top American executives were growing again, after shrinking during the 2008-9 recession.

But that study, conducted for The New York Times by Equilar, an executive compensation data firm based in Redwood City, Calif., was just an early snapshot, and there were even more riches to come. Some big companies had not yet disclosed their executive compensation.

So Sunday Business asked Equilar to run the numbers again.

Brace yourself.

The final figures show that the median pay for top executives at 200 big companies last year was $10.8 million. That works out to a 23 percent gain from 2009. The earlier study had put the median pay at a none-too-shabby $9.6 million, up 12 percent.

Total C.E.O. pay hasn’t quite returned to its heady, prerecession levels — but it certainly seems headed there. Despite the soft economy, weak home prices and persistently high unemployment, some top executives are already making more than they were before the economy soured.

Pay skyrocketed last year because many companies brought back cash bonuses, says Aaron Boyd, head of research at Equilar. Cash bonuses, as opposed to those awarded in stock options, jumped by an astounding 38 percent, the final numbers show.

Granted, many American corporations did well last year. Profits were up substantially. As a result, many companies are sharing the wealth, at least with their executives. “We’re seeing a lot of that reflected in the pay,” Mr. Boyd says.

And at a time of so much tumult in the media business, it might be surprising that some executives in media and communications were among the most richly rewarded last year.

The preliminary and final studies put Philippe P. Dauman, the chief executive of Viacom, at the top of the list. Mr. Dauman made $84.5 million last year, after signing a new long-term contract that included one-time stock awards.

Leslie Moonves, of the CBS Corporation, got a 32 percent raise and reaped $56.9 million. Michael White of DirecTV was paid $32.9 million, while Brian L. Roberts of the Comcast Corporation and Robert A. Iger of the Walt Disney Company each received pay packages valued at $28 million.

“Media firms seemed to be paying a lot,” said Carol Bowie, head of compensation policy development at ISS Governance, which advises large investors on corporate governance issues like proxy votes. “Media companies in general tend to be high-payers, and they tend to feed off each other.”

Other big payers included oil and commodities companies like Exxon Mobil and a few technology giants like Oracle and I.B.M.

Some of the other highly paid executives on the new list who were not in the April survey are Gregg W. Steinhafel of Target, who had a $23.5 million pay package; Michael E. Szymanczyk of Altria, $20.77 million; and Richard C. Adkerson of Freeport-McMoRan Copper & Gold, $35.3 million.

Most ordinary Americans aren’t getting raises anywhere close to those of these chief executives. Many aren’t getting raises at all — or even regular paychecks. Unemployment is still stuck at more than 9 percent.

In some ways, chief executives seem to live in a world apart when it comes to pay. As long as shareholders think that the top brass is doing a good job, executives tend to be well paid, whatever the state of the broader economy. And some corporate boards were probably particularly generous in 2010 after a few relatively lean years for their top executives. In other words, some of this was makeup pay.

“What is of more concern to shareholders is that it looks like C.E.O. pay is recovering faster than company fortunes,” says Paul Hodgson, chief communications officer for GovernanceMetrics International, a ratings and research firm.

According to a report released by GovernanceMetrics in June, the good times for chief executives just keep getting better. Many executives received stock options that were granted in 2008 and 2009, when the stock market was sinking.

Now that the market has recovered from its lows of the financial crisis, many executives are sitting on windfall profits, at least on paper. In addition, cash bonuses for the highest-paid C.E.O.’s are at three times prerecession levels, the report said.

Of course, these sorts of pay figures invariably push the buttons of many ordinary Americans. Yes, workers’ 401(k)’s are looking better than they did in some recent years, but many investors still have not recovered from the hit they took during the financial crisis. And, of course, millions are out of work or trying to hold on to their homes — or both.

And it’s not as if most workers are getting fat raises. The average American worker was taking home $752 a week in late 2010, up a mere 0.5 percent from a year earlier. After inflation, workers were actually making less.

On the flip side, some chief executives have consistently taken token salaries — sometimes, $1 — choosing instead to rely on their ownership stakes for wealth. These stock riches don’t show up on the current pay lists, but they can be huge.

Warren E. Buffett, for instance, saw his stock holdings rise last year by 16 percent, to $46 billion. Other longtime chief executives or founders who are sitting on billions of paper profits include Jeffrey P. Bezos of Amazon.com and Michael S. Dell, the founder of Dell.

Resurgent executive pay has some corporate watchdogs worried that companies have already forgotten the lessons of the bust. Boards have promised to tie executive pay to company success, but by some measures pay is rising faster than performance. The median pay raise for chief executives last year — 23 percent — was roughly in line with the increase in net corporate profits. But it far exceeded the median gain in shareholders’ total return, which was 16 percent, as well as the median gain in revenue, which was 7 percent.

FOR the moment, shareholders aren’t storming executive suites. And while they received a say on pay under new federal rules last year, their votes are nonbinding. In other words, boards can still do as they please.

Pay specialists say companies are taking a hard look at these votes. Still, only about 1.5 percent of the 200 companies in the Equilar study were rebuffed by their shareholders on pay. A vast majority of the votes passed overwhelmingly, with 80 percent or 90 percent support, according to Mr. Boyd of Equilar.

Mr. Boyd says companies are making an effort to explain their pay plans. “We saw companies take it very seriously,” he says of the new rule.

In some respects, the mere possibility that shareholders might reject a proposed pay plan is enough to make corporate executives think again. Ms. Bowie of ISS says that outrageous payouts — such as so-called tax gross-ups, in which companies cover executives’ tax bills on perks like corporate jets — are becoming rarer.

Disney for instance, eliminated tax gross-ups this year in the face of shareholder ire, she said.

Company directors have the power to rein in runaway executive pay, but it is unclear whether either they or shareholders will do so in 2012. “It can be done if there is the will,” Ms. Bowie says.

By: Pradnya Joshi, The New York Times, July 2, 2011

July 4, 2011 Posted by | Big Business, Class Warfare, Congress, Conservatives, Consumers, Corporations, Democracy, Economic Recovery, Economy, Equal Rights, GOP, Media, Middle Class, Minimum Wage, Politics, Republicans, Tax Loopholes, Taxes, Unemployed, Unemployment, Wall Street, Wealthy | , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

The Supreme Court’s Continuing Defense Of The Powerful

The United States Supreme Court now sees its central task as comforting the already comfortable and afflicting those already afflicted.

If you are a large corporation or a political candidate backed by lots of private money, be assured that the court’s conservative majority will be there for you, solicitous of your needs and ready to swat away those pesky little people who dare to contest your power.

This court has created rules that will have the effect of declaring some corporations too big to be challenged through class actions, as

AT&T customers and female employees at Wal-Mart discovered.

And remember how sympathetic conservatives are supposed to be to the states as “laboratories of democracy,” pioneering solutions to hard problems?

Tell that to the people of Arizona.

They used a referendum to establish a highly practical system of financing political campaigns that the court, in a 5-4 decision Monday, eviscerated. It was designed to reduce corruption and give a fighting chance to candidates who decide to forgo contributions from special interests.

The people acted, noted Justice Elena Kagan in a brilliantly scalding dissent, after a scandal in which “nearly 10 percent of the state’s legislators were caught accepting campaign contributions or bribes in exchange for supporting a piece of legislation.”

Under Arizona’s “clean elections” initiative, candidates who raised a modest amount in very small contributions could receive a lump sum of public money. They could raise no further private funds.

No candidate had to join the public system. But if a privately financed candidate or the interest groups supporting his or her campaign started outspending one who was publicly financed, the public system came to the rescue with additional cash so the “clean money” candidate wouldn’t be blown out of the race by lethal dollar bills.

Why was this important? Kagan was spot on: “Candidates will choose to sign up” for public funding “only if the subsidy provided enables them to run competitive races.” Such breathtaking common sense has been missing from the majority’s recent campaign finance decisions — notably its Citizens United ruling, also a 5-4 conservative ukase, allowing our poor, beleaguered corporations to expand their power in American politics.

Here’s the stunning part: For years, opponents of campaign finance reform have accused those who want to repair the system of trying to reduce the amount of political speech. But Arizona’s law, as Kagan pointed out, “subsidizes and so produces more political speech.” And then there was this shot at Chief Justice John Roberts’ majority opinion: “Except in a world gone topsy-turvy, additional campaign speech and electoral competition is not a First Amendment injury.”

Indeed, Roberts had to argue that those terribly downtrodden candidates financed with private money had their speech “burdened,” simply because their publicly financed opponents had the means to respond.

Kagan and the dissenters stood up for free speech. Roberts’ majority defended paid speech. The dissenters want to allow candidates to talk; the majority wants to enhance money’s ability to talk.

Roberts was especially exercised over any notion of “leveling the playing field” between private-money candidates and their challengers. He even included a footnote calling attention to the Citizens Clean Elections Commission’s Web site, which once said the law was passed “to level the playing field when it comes to running for office.” Horrors!

Kagan archly noted the “majority’s distaste for ‘leveling’ ” and then dismissed its obsession, observing that Roberts failed to take seriously the Arizona law’s central purpose of containing corruption. Leveling was the means, not the end.

Nonetheless, pay heed to how this conservative court majority bristles at nearly every effort to give the less wealthy and less powerful an opportunity to prevail, whether at the ballot box or in the courtroom. Not since the Gilded Age has a Supreme Court been so determined to strengthen the hand of corporations and the wealthy. Thus the importance of the Wal-Mart and AT&T cases, the latter described by the New York Times as “a devastating blow to consumer rights.” Will the court now feel so full of its power that it takes on the executive and legislative branches over the health-care law?

In 1912, Theodore Roosevelt warned that the courts had “grown to occupy a position unknown in any other country, a position of superiority over both the legislature and the executive.” Worse, “privilege has entrenched itself in many courts just as it formerly entrenched itself in many legislative bodies and in many executive offices.”

What happens to a democracy when its highest court dedicates itself to defending privilege? That’s the unfortunate experiment on which we are now embarked.

By: E. J. Dionne, Opinion Writer, The Washington Post, Published June 29, 2011

July 4, 2011 Posted by | Class Warfare, Congress, Conservatives, Constitution, Corporations, Democracy, GOP, Government, Ideologues, Ideology, Middle Class, Politics, Republicans, Right Wing, SCOTUS, Wealthy | , , , , , , , , , , , | 2 Comments

   

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