“Chief Tax-Dodging Officers”: It’s Gotten Pretty Easy For Large Corporations To Avoid The Taxman
Republican and Democratic leaders don’t often see eye to eye on taxes.
But surprisingly, corporate tax reform looks like one area where there might actually be some potential for bipartisan action in Washington. This should be good news, since our corporate tax system is clearly hopelessly broken.
Here’s a stark indicator of just how broken: Last year, 29 of the 100 highest-paid CEOs made more in personal compensation than their companies paid in federal income taxes. That’s according to a new report by the Institute for Policy Studies and the Center for Effective Government.
Source: Fleecing Uncle Sam, an Institute for Policy Studies and Center for Effective Government report
Yes, it’s gotten that easy for large corporations to avoid the taxman.
This is true even for the country’s wealthiest companies. Citigroup, Halliburton, Boeing, Ford, Chesapeake Energy, Chevron, Verizon, and General Motors all made more than $1 billion in U.S. profits last year, but still paid their CEOs more than they paid Uncle Sam. In fact, most of them got massive tax refunds.
How is this possible?
While big businesses moan about the U.S. corporate tax rate of 35 percent, most of them pay nowhere near that. Between 2008 and 2012, the average large corporation paid an effective rate of less than 20 percent.
Hiding profits in tax havens is one of the most common ways large corporations avoid paying their fair share to the IRS. And indeed, the 31 firms who paid their CEOs more than Uncle Sam operate 237 subsidiaries in low- or no-tax zones like the Cayman Islands and Bermuda.
But that’s just one tax-dodging trick. Corporations have lobbied successfully for a plethora of other tax loopholes and subsidies.
Boeing, for example, has figured out how to double dip in the Treasury’s pool.
The aerospace giant hauled in more than $20 billion in federal contracts in 2013. According to Citizens for Tax Justice, taxpayers also picked up the tab for $300 million of Boeing’s research expenses last year through a tax break that Congress is now considering making permanent.
When tax time came, Boeing got $82 million back from the IRS, despite reporting nearly $6 billion in U.S. pre-tax profits. Meanwhile, Boeing chief executive Jim McNerney made $23.3 million.
Corporate tax dodging is bad for ordinary Americans — and our nation’s long-term economic health.
For example, if Boeing had paid the statutory corporate tax rate of 35 percent on its $6 billion in profits, it would’ve added an extra $2 billion to the funds available for public services. That sum would’ve covered the cost of hiring 2,775 teachers for a year.
Shirking taxes may boost the bottom line in the short term, but in the long run it erodes the economic infrastructure businesses need to be competitive.
Unfortunately, the current political rhetoric has little to do with cracking down on corporate tax avoidance.
Republicans are hooked on corporate tax giveaways. And President Barack Obama has suggested that he’s ready to reward corporations for stashing money overseas by giving them deeply discounted tax rates on their profits if they’ll just agree to bring them home.
Both of these positions are based on the unfounded claim that smaller corporate tax burdens translate into more good jobs.
In a Hart Research poll of voters on election night, only 22 percent favored taxing corporations less. In the same poll, less than 30 percent wanted Congress to make tax cuts a higher priority than investments in education, health care, and job creation.
The American people have their priorities straight. They deserve leaders who do too.
By: Sarah Anderson and Scott Klinger are the co-authors of “Fleecing Uncle Sam”; The National Memo, November 19, 2014
“The Light Is On…But”: This Man Wants Us To Take Him Seriously
On the good side, unlike Michelle Malkin, Sen. Rand Paul of Kentucky doesn’t think the internment of Japanese-Americans during World War Two was sound policy. On the bad side, Sen. Paul wants us to take him seriously as a presidential candidate:
Sen. Rand Paul (R-KY) likened President Barack Obama’s decision to take executive action on immigration to then-President Franklin D. Roosevelt’s executive order authorizing putting Japanese-Americans in internment camps during World War II.
Paul made the comments on Friday, a day after Obama formally announced the executive actions, at the Kentucky Association of Counties conference in Lexington, Kentucky.
“I care that too much power gets in one place. Why? Because there are instances in our history where we allow power to gravitate toward one person and that one person then makes decisions that really are egregious,” Paul said. “Think of what happened in World War II where they made the decision. The president issued an executive order. He said to Japanese people ‘we’re going to put you in a camp. We’re going to take away all your rights and liberties and we’re going to intern you in a camp.'”
“We shouldn’t allow that much power to gravitate to one individual. We need to separate the power.”
As is his custom, Rand Paul doesn’t even have his history correct, since Congress passed Public Law 503 to help enforce FDR’s executive order that authorized the internment camps.
By: Martin Longman, Political Animal, The Washington Monthly, November 22, 2014
“Please Proceed Senator”: Ted Cruz Wants To Fight Obama Over Immigration, But He Forgot About One Thing
Sen. Ted Cruz (R-Texas) is calling for congressional Republicans to fight back against President Barack Obama’s executive action on immigration, saying they should refuse to confirm the president’s nominees until he reverses course.
“If the president announces executive amnesty, the new Senate majority leader who takes over in January should announce that the 114th Congress will not confirm a single nominee — executive or judicial — outside of vital national security positions, so long as the illegal amnesty persists,” Cruz wrote in a recent Politico Magazine op-ed.
There is obviously some political risk in Republicans pursuing such a strategy, given the presidential election in two years and a Senate landscape that looks more favorable for Democrats to regain control in that election.
But during an interview with Cruz on “Fox News Sunday,” host Chris Wallace pointed out another potential downside to blocking Obama’s nominations: Attorney General Eric Holder, a constant source of irritation for Republicans, would get to stay in his job longer. Holder announced in late September that he planned to retire, and earlier this month, Obama nominated Loretta Lynch, the U.S. attorney for the Eastern District of New York, to take his place. Holder has stated that he will remain in his position until his successor’s nomination is confirmed by Congress.
“Are you saying that the Senate should refuse to confirm Loretta Lynch, the president’s new nominee for attorney general, and thereby leave Eric Holder, who you don’t like very much, in that position even longer?” asked Wallace.
Cruz largely avoided Wallace’s question, simply saying that Republicans “should use the constitutional checks and balances we have to rein in the executive.”
Wallace, however, persisted, and asked the question again. This time, Cruz still did not state directly that the Senate should block Lynch, but implied as much by saying that only positions of “vital national security” should get to the floor for a vote.
“In my view, the majority leader should decline to bring to the floor of the Senate any nomination other than vital national security positions,” the senator said. “Now, that is a serious and major step.”
In a prime-time address Thursday night, Obama announced that because Congress had failed to pass immigration reform, he would use his executive authority to bring deportation relief to 4 million or more undocumented immigrants.
The president’s executive action will protect undocumented parents whose children are U.S. citizens or legal permanent residents, as well as immigrants who came to America as children and others with long-standing ties to the country, from being deported.
Obama defended his actions in an interview with George Stephanopoulos, host of ABC’s “This Week,” that aired Sunday morning. “The history is that I have issued fewer executive actions than most of my predecessors, by a long shot,” he said. “The difference is the response of Congress, and specifically the response of some of the Republicans.”
“But if you ask historians, take a look at the track records of the modern presidency, I’ve actually been very restrained, and I’ve been very restrained with respect to immigration,” Obama added. “I bent over backwards and will continue to do everything I can to get Congress to work because that’s my preference.”
By: Amanda Terkel, The Huffington Post, November 23, 2014
“Stony Silence”: On Bill Cosby, Hard To Keep The Faith
A few weeks ago, I spent a delightful afternoon and evening with Bill Cosby. I was the emcee of a gala for historically black Claflin University, which is in my home town of Orangeburg, S.C.; Cosby was the headliner. Both of us were donating our time to a worthy cause.
It was just the second time I had met him, so I certainly don’t claim to know him well. It was apparent that he’s having serious problems with his eyesight; a young man was at his side to help him navigate. Otherwise, Cosby was just what you’d expect if you ever watched an episode of his eponymous television show — warm, funny, avuncular, mischievous, wise. He was Cliff Huxtable in winter.
Cosby does his stand-up routine sitting down these days, but he had the audience roaring. I was floored by his talent — the way he spun out multiple threads of narrative until he seemed hopelessly lost in digression, then somehow pulled everything together at the end. He’s still got it.
So was I having a jolly old time with a serial rapist?
It is possible that all the women who accuse Cosby of sexual predation are lying, in the sense that anything not prohibited by the laws of physics is possible. But it doesn’t seem very likely.
I confess that I’m having trouble squaring the allegations with the man I was with that day. I suspect many people may be experiencing the same kind of cognitive dissonance. Cosby has spent his long, groundbreaking career in the entertainment industry being such a good guy. How could he possibly be such a bad guy, too?
I still remember the electrifying night when “I Spy” debuted in 1965. It was the first network television series to feature an African American in a leading role, with Cosby co-starring alongside Robert Culp. They played a couple of secret agents who pretended to be an itinerant tennis pro (Culp) and his trainer (Cosby).
The writers made Cosby’s character the brainy one. “I Spy” never once, to my recollection, dealt head-on with the issue of race. It didn’t have to. Seeing an intelligent, well-spoken black character, with no hint of subservience or buffoonery, was statement enough.
Cosby’s image as a paragon reached its apotheosis nearly two decades later in “The Cosby Show,” which began its eight-year run in 1984. One of the greatest sitcoms in television history, “Cosby” took viewers into the lives of a middle-class African-American family. The cultural references were specific and revelatory — familiar music, historically black colleges, the “code-switching” that upwardly mobile African Americans learned to perform. Oh, and the sweaters.
“The Cosby Show” was a soapbox. Cosby used it to preach universal truths about love and family but also to deliver targeted messages about the value of education for African Americans.
In recent years, his insistence on the theme of black self-empowerment has bordered on the shrill. At times, it seemed to me, he went overboard in “blaming the victim.” But his heart was in the right place.
Or seemed to be.
How am I supposed to reconcile this history with allegations of sexual misconduct and rape that span more than three decades? Five women, including supermodel Janice Dickinson, have come forward in recent days to charge that Cosby lured them on the pretext of mentoring their careers, plied them with alcohol and perhaps some unknown drug and forced them to have sex when they were unable to resist.
A 2005 civil suit by a Philadelphia woman alleging that Cosby sexually assaulted her — and offered her money to keep quiet about the attack — was settled out of court.
It is important to note that Cosby has never been charged with any crime. It is also important to note that statutes of limitations have run out on most, if not all, of the alleged attacks. It may be unfair, but a rape that goes formally unreported for too long is no longer legally considered a rape.
Is it fair to Cosby, then, that his alleged victims come forward now, knowing they will never have to prove anything in court? Cosby’s defenders should be aware that some of the women have spoken publicly before; the difference is that now they’re being listened to.
Cosby’s new sitcom project has been canceled. “The Cosby Show” has been yanked from the rotation on TVLand. I’d like to believe the man I met is incapable of such monstrous acts. But his stony silence makes it hard to keep the faith.
By: Eugene Robinson, Opinion Writer, The Washington Post, November 20, 2014
“Are Americans “Stupid” Or Uninformed?”: The Purpose Of The Media Is To Produce ‘Eyeballs’…For Advertisers
Republicans are making hay out of Jonathan Gruber’s suggestion that those who crafted Obamacare thought the American public was stupid. While that was a politically incorrect (and stupid) thing to say, we’ve all seen enough “man on the street” interviews where too many people don’t know which party controls Congress or who the current Vice President is to simply dismiss it as untrue.
But a more relevant question would be to ask whether or not the American public is “stupid” (inferring a lack of intelligence) or uninformed. That is the question sparked by this recent Gallup poll. They found that – while the violent crime rate has dropped dramatically since the early 1990’s (from 80 incidents of violent crime/1000 people to 23/1000), 63% of Americans think that violent crime is increasing.
Back in the 1990’s I attended a workshop on the effects of television on young people. The presenter asked the audience, “What is the purpose of television?” After a lot of responses that focused on entertainment, the presenter said that the purpose was to produce eyeballs…for advertisers. I would suggest that the same thing is now true of our news media. The perception of an increase in violent crime is likely a direct result of the old adage: “if it bleeds, it leads.”
Media Matters recently produced a report showing that both cable and network news reporting on Ebola spiked in the days leading up to the 2014 midterms and then simply went to almost nothing afterwards. I don’t buy the idea that this was some collusion between the media and Republicans. I suspect it had more to do with the way that fear of the disease spreading grabbed everyone’s attention, and then a total elimination of coverage once it was clear that wasn’t going to happen (at least not in this country). In other words, success at containing the spread of Ebola doesn’t produce eyeballs.
Circling back to the subject of Obamacare, its interesting to note the effect all this has on the perceptions of the public.
Jon Krosnick, Wendy Gross, and colleagues at Stanford and Kaiser ran large surveys to measure public understanding of the ACA and how it was associated with approval of the law. They found that accurate knowledge about what’s in the bill varied with party identification: Democrats understood the most and liked the law the most, independents less, and Republicans understood still less and liked the law the least. However, attitudes were not just tribal. Within each party, the more accurate your knowledge of the law, the more you liked it.
These researchers found that in the unlikely event that the public had a perfect understanding of the law, approval of it would go from 32% to 70%. That’s the price we pay for an uninformed public.
Its true that technology has allowed partisans and ideologues to choose media sources that confirm their beliefs. But those who simply want “the news” are pretty regularly fed a diet that inflames more than it informs. If you doubt that, take a look at one retired anchorman’s reaction to the movie “Anchorman.”
If we want this to change, we’ll need everyone to think twice about what they do with their eyeballs.
By: Nancy LeTourneau, Political Animal, The Washington Monthly, November 23, 2014
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