Got what was supposed to be an insightful poem from a friend of mine today. It was written in 1949, which, I guess is the point, but the point really was that it is yet another attack by the right on the welfare state. It made me realize just how out of touch with the reality of economics the Right really is, not just then but especially now.
It seems that every conservative taxpayer in the country, is consumed with the idea, that someone out there, probably a minority, is stealing from them. It’s all part of the government dole, just ask them. To be fair, yes, that guy and his starving family are definitely out there, but to be just as fair, they aren’t the real problem. They eat so little that they could easily be absorbed into a booming economy- if only we had one. The real problem is that our economy isn’t booming, at least not for the majority of Americans. Even though jobs are increasing, wages aren’t. Our middle and lower-middle class wage earners are stuck at a place they occupied in the 1970s. That means that they have actually lost ground, a lot of ground.
Why is this? Maybe it’s because big companies, companies like Bank of America – interesting name Bank of America, especially when it isn’t located in America but in the Cayman Islands – don’t pay taxes. That’s right; The Cayman islands have a corporate tax rate of 0% so in 2010 Bank of America set up its 200 subsidiaries there. No it wasn’t for the beaches, it was so they would pay zero in federal income taxes and as if that wasn’t enough, our generous federal government gave them an additional $1.9 billion tax credit, $1.9 billion! How many welfare mothers do you think it takes to eat that figure up? How many nurses could be hired, or teachers or firemen?
Of course Bank of America wasn’t alone. Goldman Sachs moved a bunch of their subsidiaries overseas to save approximately $3.3 billion. The there’s Citicorp who has paid no federal taxes for four years after receiving $2.5 trillion, that’s trillion, in assistance from the Federal Reserve.
We haven’t got an entitlement problem, we’ve got a corporate tax problem and it comes from allowing our corporations to move their headquarters overseas to avoid the taxes they legitimately owe to the US people, the people who make their companies possible, through their support.
Pfizer and Eli Lilly used their lobbyists to push through legislation that made it illegal for companies in Canada and Europe to sell drugs in this country at a cheaper price than Pfizer & Lilly do, even though those drugs were vastly overpriced by them. But then Pfizer and Eli Lilly shift the patents overseas to avoid paying US taxes.
Then there’s Apple. It creates all its products in the US but it makes them in China so as not to pay US wages or employ US workers. Then it sells its stuff here and shifts its profits to the BVI, Ireland or Luxembourg where it avoided about $2.4 billion in taxes in 2011. It is so bad that the President mentioned them in his State of the Nation address, pointing out that they will now be making some small percentage of their products in this country. Big deal. The should have been making them all her all along.
Is this starting to add up? Is this making any kind of impression? Are you starting to see why the humane services that we try to provide as a country cost a drop in the bucket compared to what we are giving away to corporate America in ridiculous tax benefits, just to have them move most of their jobs overseas. And I haven’t even touched the surface. I could go on for pages starting with the oil industry, moving through the rest of Wall Street, the Real Estate business, the banks, what have you.
While we debate deficit reduction and budget cuts, all we have to do is collect the taxes that will be owed to us, if we just get rid of the phony loopholes that we have established to help businesses that already make more money than God.
What makes his country different, what makes this country great is that most of the people take great pride in taking care of those in need. Those who want to stop this because they claim it’s costing us too much money aren’t mistaken; they’re liars and thieves.
Obama managed to hammer a couple of percentage points out of the super rich on their federal taxes. That was chicken feed. The real money is in the tax money, saved by loopholes, that currently isn’t going into the federal hopper. What is the tax hike going to add to the federal budget, maybe $700 billion over ten years? We can take in ten times that much each year if we just close those loopholes and don’t believe idle threats like they’ll just move the businesses overseas. They would already have done that if it were feasible. There is no loyalty in business, there is only the bottom line and the bottom line of these businesses depends on their staying here or they would already be gone.
We don’t have an entitlement problem, we don’t have a Medicare, a social security or an Obamacare problem. What we have is a corporate tax loophole problem.
It’s not up to congress to solve this because they won’t. Too many of them, especially on the Right, don’t want to solve these problems because they make too much money from the lobbyists who are paid to hold the status quo. If we want to solve these problems we have to act ourselves. We finally seem to have a President who wants to hear from the people rather than the congress. Take advantage. Let him hear from you. Tell him that the most important fiscal thing he can accomplish in the next four years is to get rid of the corporate loopholes. We don’t have an entitlement problem. We have a loophole problem and it’s eating us alive.