FANG: A lot of liberals are hosting what CBS News has called you know a left-wing alternative to the Tea Party this weekend, demonstrations all over the country. And one of their key complaints is that corporations aren’t paying their fair share. And they give examples like, in 2009, ExxonMobil, Bank of America, CitiGroup, GE, none of these corporations paid a dime in corporate income taxes. Do you think it’s fair for these corporations not to pay income taxes? [...] But they’re using offshore bank accounts as loopholes–
FRANKS: Those things can be addressed. But the bottom line is, corporate income taxes, they’re taxes on the people, ultimately.
FANG: But they’re not paying any of these taxes.
FRANKS: But what I’m saying is to raise corporate taxes or increase corporate taxes, won’t hurt the corporations, they’ll just pass it along. [...]
FANG: CitiGroup had one of its most profitable years ever in the last two years and they didn’t–
FRANKS: And you’re saying they didn’t pay any taxes on the profit?
FANG: Yes, in 2009. We don’t know about 2010.
FRANKS: Well, then they broke the law.
Monday, February 28, 2011
GOP Congressman Offers Praise For US-UnCut Effort: CitiGroup’s Corporate Tax Dodging ‘Broke The Law’
Over the weekend, Americans all over the country staged demonstrations demanding that corporations pay their fair share in taxes. As ThinkProgress’ Zaid Jilani reported, many of America’s largest and most profitable corporations, like ExxonMobil, CitiGroup Bank of America, have managed to avoid paying any corporate taxes for most quarters in recent years. As corporations pay out record bonuses and compile billions in untaxed profits, corrupt politicians are trying to force regular Americans to give up benefits and social programs to pay down the deficit.
At the summit, ThinkProgress approached two conservative Republicans, Rep. Trent Franks (R-AZ) and Rep. Jeff Flake (R-AZ), to talk about corporate tax dodgers as well as the burgeoning “Main Street Movement“/US-UnCut efforts (US-UnCut is modeled after the UK group demanding British tax dodging corporations pay their fair share). Asked how he feels about large corporations skipping tax payments, Franks was at first incredulous, telling us that they do pay taxes but simply “pass it along” to consumers. Reminded that firms like Bank of America and CitiGroup have earned profits and avoided paying taxes, Franks finally responded sternly: “Well, then they broke the law”:
Similarly, we asked Rep. Jeff Flake (R-AZ) if very profitable corporations like Bank of America, which paid nothing in corporate income taxes in 2009, were “paying their fair share.” Flake responded, “people’s definitions of fair share is different.” Flake laughed in disbelief, and finally responded, “I’d have to look at your figures.” (see video above)
Each corporation has seized upon various loopholes to avoid paying taxes. Google, for instance, uses a variety of foreign subsidiaries as pass through corporations. In the case of CitiGroup, the IRS offered the company an exception to long-standing tax rules in 2009 because CitiGroup was still owned by taxpayer because of TARP. Even after CitiGroup sold its taxpayer-owned shares, it continued dodging corporate taxes. A GAO study found that CitiGroup maintains 427 subsidiaries in tax havens like Aruba and the Bahamas.
Some of the largest service contractors in Iraq and Afghanistan have checkered histories of misconduct, including instances of shooting civilians, false claims against the government, violations of the Anti-Kickback Act, fraud, retaliation against workers' complaints, and environmental violations.
The government's inability to hold all contractors accountable begs the question: Is the government so reliant on large contractors that bad actors are required to preserving legitimate competition and mission accomplishment? This might be the contracting version of "too big to fail."
Gov. Daniels Says Governments Should Slash Spending ‘Even If They End Up Seriously Costing A Lot Of Jobs’
When asked earlier this month about the job loss that would occur if the continuing resolution passed by House Republicans were actually implemented, Speaker John Boehner (R-OH) replied “so be it.” “We’re broke. It’s time for us to get serious about how we’re spending the nation’s money,” he said.
And Boehner is evidently not the only one who feels that budget cuts should be imposed with complete disregard for their effect on employment. In an interview with NPR’s Steve Inskeep today, Gov. Mitch Daniels (R-IN) was asked if budget cuts should still go forward, even if they would result in widespread job loss, and replied “yes”:
INSKEEP: I want to ask something that a lot of people are confronting right now, as they deal with the federal deficit as well as state and local deficits that need to be closed. Are budget cuts — government budget cuts — worth it, even if they end up seriously costing a lot of jobs right now?
DANIELS: The answer is yes.
Last week, economists at Goldman Sachs estimated that the House Republicans’ continuing resolution would cause GDP to drop by 1.5 to 2 percent, which CAP economist Adam Hersh explained would translate into a one percentage point jump in the unemployment rate. Before that, the Economic Policy Institute found that the Republican plan would cause a loss of nearly one million jobs.
As if we needed more evidence of the effect GOP spending policy could have on employment, Moody’s Analytics predicted today that the House Republican plan wouldcause the loss of 700,000 jobs:
A Republican plan to sharply cut federal spending this year would destroy 700,000 jobs through 2012, according to an independent economic analysis set for release Monday…[Moody's Chief Economist Mark] Zandi, an architect of the 2009 stimulus package who has advised both political parties, predicts that the GOP package would reduce economic growth by 0.5 percentage points this year, and by 0.2 percentage points in 2012, resulting in 700,000 fewer jobs by the end of next year.
Republicans rode into the House majority chanting “where are the jobs?” but multiple independent analyses have now found that the vision they have for the federal budget would make unemployment substantially worse.
Posted by Timsomor at 2/28/2011 04:02:00 PM
Tossing Out the Tossed Salad
With a biracial president in the White House, as well as gender and ethnic diversity on the Supreme Court, it’s clear that diversity and multiculturalism are important values for Americans.
REPORT: Ending Special Interest Tax Dodging Would Balance Wisconsin’s Budget And End The War On Unions
Over the weekend, Main Street America held the largest rallies yet to take place against Wisconsin Gov. Scott Walker’s (R) radical proposal to gut his state’s public employee union collective bargaining rights. Walker claims that his assault on the state’s labor unions is designed to help close his state’s budget deficit and save taxpayers money.
Yet the truth is that the relatively minor budget woes that Wisconsin faces aren’t aresult of the middle class pay and benefits afforded to hard-working teachers, municipal employees, and other Main Street Americans. Rather, declining tax revenues from a recession caused by Wall Street and corporate tax cuts Walker immediately rammed through the legislature are much more responsible for the relatively minor shortfalls the state is facing.
Walker claims that that the state is facing a $137 million budget deficit and says that the state’s hard-working public employees should sacrifice their pay and benefits and have their collective bargaining rights crippled in order to close this budget gap. Additionally, Walker has included language in his latest budget proposal that wouldrestructure the state’s debt, which would essentially take care of any economic problems in the short-term. Despite the fact that they aren’t responsible for a budget deficit, Wisconsin’s public employee unions have “announced they would accept paying half the cost of pensions and 12.6 percent of the cost of health insurance — as long as they were allowed to keep their collective bargaining rights” — a deal Walker has flatly rejected.
Yet if Walker really feels like the state is facing unacceptable budget problems and that it needs to be able to recoup revenue, he doesn’t have to attack the pay, benefits, or rights of his public employees at all. All he has to do is look at his state’s tax code and take action to close a handful of special interest tax loopholes and tax breaks so that the state’s richest pay their fair share so that the middle class that has already sacrificed so much doesn’t continue to have to bear all the burdens of the recession by itself. ThinkProgress has assembled a far from comprehensive list of just some of these special interest tax breaks and loopholes that could help balance the budget and end any need for a war on unions:
– Close The Internet Sales Tax Loophole: Currently, online retailers all over the country make skillfull use of the tax code to avoid paying sales taxes. Big retailers like Amazon.com set up subsidiary corporations in states and then argue that the subsidiary corporation doesn’t obligate the parent company to collect sales taxes in the state. A University of Tennessee study estimates that “in 2011 alone, Wisconsin will lose an estimated $127 million in uncollected sales tax on purchases made online” — only $10 million short of what Walker projects his state’s deficit to be. While the best way to close the internet sales tax loophole is for federal action, some states like New York have enacted what they refer to as the “Amazon law,” which would decree that any internet sales company would be liable for the state’s tax laws if it has “independent ‘affiliate’ websites in the state promoting sales on its behalf.” After New York enacted its law to capture previously lost revenues in 2008, Amazon responded by unsuccessfully suing the state. Wisconsin could follow New York’s lead.
- Close Special Interest Property Tax Loopholes: Much of the funding necessary to support government services in Wisconsin comes from property taxes, collected by municipalities, with these taxes currently generating “far more revenue than any other state or local tax.” Considering that much of the Wisconsin state budget is consumed by aid to municipalities, closing these loopholes would relieve city budgets and therefore help reduce statewide expenditures. The current exemptions on potential property taxes amount to $700 million a year. Many of these exemptions were won by interest groups with clout in the state legislature. For example, nonprofit community hospitals — which make up 89% of hospital revenue in the state — currently have an exemption, allowing them to forgo $128 million in taxes in 2008. Certain retirement homes also have an exemption that costs the state $15 million a year. The 2009-2011 state budget included a special exemption “for student housing owned by a nonprofit organization that houses up to 300 students, with at least 90% of its residents enrolled at the University of Wisconsin-Madison” — which benefitted a single dorm: the “Pres House on the UW-Madison campus, which would pay about $250,000 in taxeswithout it.” While some of the state’s current exemptions make sense, others simply benefit special interest groups and should be closely examined.
- Crack Down On Corporate Income Tax Dodgers: The Institute for Wisconsin’s Future (IWF) notes that the state is “losing over one billion dollars annually to the ‘tax gap,’ the difference between what is legally owed by taxpayers and what is actually paid.” It notes that “business income is only 8% of Wisconsin income, but responsible for 57% of the underreporting tax gap,” mostly due to underreporting. This gap accounts for $113 million in revenue. Some companies dodge their taxes by setting up subsidiaries in neighboring states with corporate income tax havens, like Nevada and Delaware. IWF suggests that simplying the tax code and expanding the network of state auditors could help close the tax gap and stop businesses from underreporting their income to avoid taxes.
And it’s worth noting that the tax cuts Walker rammed through during his first month in office “will reduce general fund tax collections by $55.2 million in 2011-12 and $62.0 million in 2012-13.” It is simply irresponsible for Walker and his allies to continue to blame middle class Wisconsinites for his state’s modest budget woes while ignoring the tax dodging by the state’s special interests who continue to fail to pay their fair share.
Posted by Timsomor at 2/28/2011 03:30:00 PM