Today, Thursday, October 6, over 2,000 people assembled at Freedom Square and marched to the U.S. Chamber of Commerce. We brought thousands of resumes of people looking for jobs.  Many testified about their job searches. Here were my remarks:

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US Chamber Helping the “Built to Loot” companies

A coalition of Wall Street companies –and the US Chamber of Commerce -are pressing for a “Tax Holiday” for companies that have parked over $1 trillion in off shore tax havens.

Companies include Google, Apple, Pfizer drug, General Electric, Duke Energy.

They’ve spent over $50 million and hired 62 lobbyists –mostly former Democratic Congressional staffers.  They intend to buy this tax break and hope that we will all stay asleep.

Today, they introduced their bill in the Senate to “repatriate” their profits.  They want to bring this money back –and claim they will use it to create jobs.

But here’s what we know: Their Pants Are On Fire.  Liar, Liar, Pants on Fire.

In 2004 they convinced Congress to do the same thing.  Congress granted a $92 billion tax holiday to 800 global companies that had stashed their profits off shore.

What did they do with their money?  Did they create jobs?

No!  Yesterday the Institute for Policy Studies released a study: 58 companies that got 70 percent of the tax breaks in 2004 destroyed almost 600,000 jobs.

They got a $64 billion in tax breaks.

They say they need cash to invest in the U.S.  We found these 58 companies are sitting on $450 billion in cash.  If they want to invest now, nothing is stopping them!

BE CLEAR: These companies are not job creators, they are job destroyers.  These used the money to funnel more money to their CEOs and pay out dividends and buy up smaller companies.

NO TAX HOLIDAYS FOR COMPANIES THAT DESTROY JOBS.

The conservative Heritage Foundation also released a study yesterday saying tax holidays won’t create jobs.  When IPS and Heritage same the same thing…hopefully Congress will Listen.

Look, we’re not anti-business.  We’re not here protesting at the Chamber because we are anti-business.

Some of us here are members of local chambers of commerce.  There are patriotic businesses in our communities that pay living wages, that source their products locally, that pay their federal and local taxes without whining.  These are domestic and rooted businesses that care about our communities and the environment –and understand that they are an integral part of a healthy community.

The business management guru Jim Collins calls them BUILT TO LAST companies –that celebrate all their stakeholders –workers, communities and shareholders.  If we’re going to help any companies, they should be BUILD TO LAST businesses that create jobs.

The companies lobbying for this Tax Holiday are BUILT TO LOOT companies.

Their business model is to shift costs off their balance sheet and onto us.  They ship jobs overseas, they dodge their taxes, they pollute and get someone else to clean up their mess.  Their whole business model is TAKE THE MONEY AND RUN.

Three weeks ago we did a study that showed 25 of these companies paid their CEOS more than they paid in taxes.

These companies are MOOCHERS.  They use the public roads and infrastructure.  They hire employees from our local schools and universities.  When someone steals their patents, they run to US courts to defend their assets.  They want our military to defend their assets around the world.  They just don’t want to PAY.  They use accounting gymnastics to shift their profits offshore and NO TAXES in the US.

Exxon Mobil, next time a pirate hijacks one of your tankers, call the Navy of Luxembourg to defend you.

Pfizer Drug –next time someone steals your patent, get the Justice Department from Ireland to defend your property.

Don’t call us until you PAY UP.

The U.S. Chamber is a lobbyist for the BUILT TO LOOT companies.  But we have to defend ourselves against these companies.  We have to organize to stop them.

If they get their tax holiday, it will only reward their bad behavior.  It will KILL JOBS at patriotic domestic companies that are forced to compete against tax dodgers on an unlevel playing field.

The BUILT TO LOOT companies will keep shipping more jobs overseas.  They will keep dodging taxes. It will cost us over $80 billion –money better spent on REAL JOB CREATORS.

STOP THE BUILT TO LOOT COMPANIES.

NO Tax Holiday for Corporations that Destroy Jobs!

Uncle Sam Should Support Built-to–Last Companies, not Built–to-Loot Enterprises

A powerful coalition of U.S.-based global companies is lobbying hard for a “tax holiday” on offshore profits.

Companies like Google, Apple, Pfizer, and General Electric have parked huge amounts of profits — a stash totaling more than $1.4 trillion —in offshore tax havens. They’ve stowed those funds abroad primarily to avoid having to pay federal taxes on that income.

But now they want to bring their treasure to the United States, albeit at a steep discount on what they owe the IRS. Instead of paying the statutory corporate income tax rate of 35 percent — or even the “effective rate,” which for most global companies, is closer to 11 percent — they’re urging Congress to let them do this at a tax rate that’s a whisker over 5 percent.

They tell Congress they need a “tax holiday” to free up badly needed capital to invest in right here — creating jobs at a time when the U.S. economy is sputtering.

They’ve formed a lobby front called the WIN America coalition to make their case, spending over $50 million and hiring over 42 lobbyists that previously worked as staffers on select Congressional tax writing committees. Most GOP members would support any tax cut, even in their sleep, so WIN America has focused its lobbying firepower on Democratic members.

The coalition’s corporate lobbyists argue this would be a win-win stimulus for the economy and a low-cost way to growth and jobs that both Republicans and Democrats could support.

The problem with these WIN America promises is this: Their pants are on fire. Here’s how we know that: They waged the same campaign in 2004 with the same promises that they would create jobs, got their way, and created few jobs.  Worse, some companies destroyed tens of thousands of jobs.

According to a new report that I co-authored, America Loses: Corporations That Tax Holidays Slash Jobs, most of the companies that claimed a tax holiday in 2004 dramatically reduced their national and global workforces.

In fact, 58 of the large corporations that took the 2004 tax holidays shed almost 600,000 workers in subsequent years. This downsizing was not a result of the economic meltdown as many of these companies prospered. Today, these 58 companies maintain combined cash reserves of more than $450 billion. There’s nothing holding them back from investing in America.

These 58 giant corporations accounted for nearly 70 percent of the total repatriated funds and collectively saved an estimated $64 billion from what they otherwise would have owed in taxes. The 10 biggest “layoff leaders” were Citigroup, Hewlett-Packard, Bank of America, Pfizer, Merck, Verizon, Ford, Caterpillar, Dow Chemical, and DuPont.

The corporate flaks will complain that these job loss numbers are exaggerated. We believe they are low, but we won’t know for sure until companies that benefit from U.S. tax breaks and subsidies are required to report, in plain language, the number of U.S. employees they have.

Congress shouldn’t be fooled again. Limited incentives should go to activities that will create jobs, not another tax holiday for off shore tax dodgers. These companies are not in the business of creating jobs. They are in the business of shifting as much wealth to their top managers and shareholders as possible.

There are other businesses out there — small businesses and domestic companies rooted in local communities that should be the objects of our encouragement and support.

Management guru Jim Collins (no relation) has written about the characteristics of “built to last” companies, businesses that are not “take the money and run” oriented, but are dynamic, growing, and capable of adapting to changing market environments. Built-to-last companies don’t play fast and loose with their stakeholders — namely, their employees, shareholders, the communities where they operate, and Mother Earth.

Unfortunately, a segment of corporate America embraces a “built to loot” business model. They shift every possible expense off their balance sheet and squeeze their stakeholders, with the exception of top management and shareholders. They outsource and offshore jobs and engage in accounting gymnastics to game their tax bills to nothing. They mooch from the common treasury, but don’t contribute.

Lawmakers should block this fiscally irresponsible and entirely undeserved tax break.

Chuck Collins is a co-author of the new Institute for Policy Studies report, America Loses: Corporations that Take Tax Holidays Slash Jobs. www.ips-dc.org

Originally Published at IPS’s Blob: http://www.ips-dc.org/blog/uncle_sam_should_support-built-to-last_companies

If you care about the future of the republic, the health of our communities, and the prospects for a transition to a new green economy –the fight over taxation and concentrated wealth is your fight.

If you care about children –and the kind of society we are going to leave for the next generation – in terms of ecological health, infrastructure, functioning government –the fight to tax the wealthy and close corporate tax abuses is your fight.

President Obama has put forward a revenue proposal worthy of vocal support and organizing. Progressives need to engage the media and our neighbors –and dramatize the reality that a majority of people support increasing taxes on millionaires and corporate tax dodgers.

Why We Should Increase Taxes on the Wealthy

There will be a vigorous debate over this proposal that will flow all the way into the 2012 election.  There are four reasons for taxing the wealthy that we should repeat in any conversation we have:

1. Taxes on the Wealthy Have Declined Steadily for Decades.  Over the last decade –and really over the last fifty years — the portion of income paid in taxes by our wealthiest citizens has steadily declined.  In 1961, when Barack Obama was born, the effective rate paid by households with income over $1 million was 43 percent.  Today it is 23 percent.  The richer you are, as Warren Buffett has illustrated, the smaller the percentage of your income you pay.

2. The Wealthy Benefit Enormously from U.S. Society.  The U.S. wealthy have disproportionately benefited from the public investments we have all made together over the last several generations in technology, scientific research, infrastructure and the system of property rights protections, education and stable market regulations that enable wealth creation to happen.  If they have any doubts about the centrality of the U.S. system to their good fortunes, they should try somewhere else.

3. We All Have A Moral Obligation to Future Generations.  Those with significant wealth at this time have a moral obligation to pay back the society that made their wealth possible.  Progressive taxation is an “economic opportunity recycling” program, enabling present generations to ensure that future generations have the same opportunities they had.  We all have a responsibility to future generations –and the wealthy have an obligation to pay their fair share of taxes as their parents and grandparents did.

4. Progressive Taxation will Reduce Extreme Inequalities of Wealth and Power.  Over the last thirty years, we’ve seen a dramatic increase in inequalities of income, wealth and opportunity.  The wealthiest one percent of households own 35.6 percent of all private wealth, more than the bottom 95 percent of households combined.  These extreme inequalities have undermined all that we care about –our democracy, education, mobility, economic stability.  This concentrated wealth and power is threatening the fundamental tenets of our democracy –and progressive taxation is one of the few ways to reduce inequality.

President Obama’s Tax Plan

The President’s Tax Reform Plan has many components and covers eight pages of provisions in the summary released, “Living within Our Means and Investing in the Future.” But they fall into three areas:

1. Allowing Bush Tax Cuts Expire and Reform the Estate Tax. President Obama has renewed his campaign pledge to allow the 2001 and 2003 Bush tax cuts for the wealthy expire on households with incomes over $250,000.  Since 2001, we’ve effectively borrowed almost $1 trillion to give the highest income households in our nation these tax breaks.  Reversing them is part of how we’ll get our fiscal house in order.

The President also proposes restoring the estate tax to 2009 levels when the tax applied to individuals with wealth over $3.5 million and couples with wealth over $7 million. The estate tax is our nation’s only levy on substantial inherited wealth. The combined revenue of these provisions would generate over $866 billion over 10 years, according to the Office of Budget and Management.

2. Millionaire Tax Rates and the Buffett Rule. The Obama proposal includes the “Buffett Rule” that no millionaire should pay an effective rate lower than a middle class taxpayer.  It was inspired by the billionaire investor’s disclosure of the ways our tax code gives preferential treatment to higher income taxpayers.  Buffett revealed that in 2010 that he paid an effective tax rate of 17.4 percent while many middle class and higher income taxpayers pay over 25 percent of their income.

High wage earners pay at 35 percent rate while income from wealth — capital gains and dividend tax rates — are 15 percent.  This preference creates all kinds of distortions, including hedge fund managers who claim their income should be taxed at the lower 15 rate.  The President’s tax proposal would eliminate this so called “Carried Interest” loophole and require hedge fund managers to pay at higher rates.

3. Corporate Tax Reform.   The Obama proposal includes a number of important tax reforms, including elimination of subsidies for the oil and gas industry and reform of huge loopholes the insurance industry uses.  It closes down some of the accounting games that corporations play that contribute little to jobs or economic health.

A Few Missing Pieces

There are few major missing pieces in the President’s revenue plan.  There is no proposal for a financial transition tax, a modest levy on transfers of stocks, bonds and other financial instruments.  European countries have been pressing the U.S. to join a global move to institute such taxes to slow unproductive currency and financial speculation.  A penny tax on every four dollars of transactions could generate over $150 billion a year in revenue.

The president’s proposal unfortunately does not fully address the huge corporate loopholes that encourage offshore tax havens and aggressive corporate tax avoidance by U.S. companies.  He should fully embrace Sen. Carl Levin and Rep. Lloyd Doggett’s “Stop Tax Haven Abuse Act,” which would raise an estimated $100 billion a year.

The president’s proposal still gives preferential tax treatment to income from capital over income from work.  The tax rate gap between earned wage income and investment income is a glaring problem that creates huge abuses and distortions.  We should tax all income under the same rate structure system, whether it comes from dividends or paychecks.

Organizing Time: Celebrate and Get to Work

The principles and policies behind President Obama’s revenue proposals are worth lifting up and defending.  They would restore progressivity and fairness to the tax code.  They would raise $1.5 trillion over the next decade from those with the greatest capacity to pay.

The push back will be enormous.  Hedge fund managers, corporate CEOs, the offshore tax dodgers  –together will spend hundreds of millions if not billions to attack these proposals.  They believe income from their investments is more virtuous that income from wages.  They believe they should get special treatment for everything they do.   They would be comfortable living in an American with great disparities of income, wealth and opportunity.

They’ll accuse Obama of class warfare.  But as Warren Buffett himself observed, “There is a class war in a America, and my class is winning.”  Obama noted that his proposal is not based on class war, but math.

We must talk to our friends, families and neighbors –post articles on social media and send around information. Tell people you know why the fight for fair taxes matters to everything they care about.

Get the facts –and counter the mythology offensive.  Check out Citizens for Tax Justice, the Center for Budget on Policy Priorities and the Tax Policy Center.

Join groups like U.S. UNCUT and The Other 98 Percent and other social networking and direct action groups that will be keeping the pressure on.

If you know a wealthy person who believes their taxes should be raised, tell them to join Wealth for the Common Good and speak out for the tax fairness.  It does no good if they keep their position private.  Warren Buffett made a difference by telling his story and exposing that there is one tax system for the wealthy and one for the other 98 percent.

If you are a small business owner, don’t let the right wing perpetuate the myth that tax increases on the wealthy and closing corporate tax loopholes are bad for small business and destroy jobs.  You have a unique voice in this debate.  Join Business for Shared Prosperity along with thousands of other small business people who believe that taxes are the price we pay for an unparalleled business environment and infrastructure.

We should remember to celebrate.  The fact that these tax proposals are on the agenda is testament to a decade of work by organizers, netroots activists, workers, researchers, and policy advocates who have made the case for progressive taxation.

It is the result of groups like Patriotic Millionaires and Wealth for the Common Good –that lift up the Warren Buffetts of the world, the thousands of other business leaders and wealthy individuals who believe they should pay more and are willing to face the cameras and say so.

It is a celebration of legislative champions like Sen. Bernie Sanders, Rep. Jan Schakowsky, Rep. Barbara Lee, Sen. Carl Levin, and Rep. Lloyd Doggett who introduced and incubated many of the policies that are in the President’s proposal when they were considered “off the table.”

This fall will be decisive –and the debate over taxes will go to heart of what kind of country we become.  All hands on deck!

This article was initially published at www.Commondreams.org

As the Super Congress eyes trillions in budget cuts that will undermine the quality of life for most Americans, here’s a stunning fact to contemplate: Twenty-five hugely profitable U.S. companies paid their CEOs more last year than they paid Uncle Sam in taxes.

In other words, the more CEOs dodge their civic responsibilities, the more lavishly they’re paid. That’s the key finding of a new Institute for Policy Studies report, Massive CEO Rewards for Tax Dodging, which I co-authored.

These artful dodgers include the CEOs of Verizon, Boeing, Honeywell, General Electric, International Paper, Prudential, eBay, Bank of New York Mellon, Ford, Motorola, Qwest Communications, Dow Chemical, and Stanley Black and Decker. Their average annual compensation totaled $16.7 million, well above last year’s average of $10.8 million for the CEOs of S&P 500 companies.

Instead of paying their fair share, these companies spend millions lobbying for additional tax breaks and loopholes. Twenty of the 25 companies spent more lobbying Congress last year than they paid the IRS in federal corporate taxes. General Electric invested $41.8 million in lobbying and got $3.3 billion in tax refunds. Boeing spent $20 million on lobbying and got a $35 billion contract from the U.S. government, while paying a paltry $13 million in U.S. taxes for a company with $4.3 billion in U.S. income last year.

Eighteen of the 25 companies aggressively use off shore tax havens to shift profits around the globe to avoid U.S. taxes. These 18 companies together had 556 subsidiaries in the Cayman Islands, Singapore, Ireland, and other havens. The offshore scam works like this: companies pretend their profits are earned in low-tax or no-tax jurisdictions — and then feign losses from their U.S. operations at tax time.

Whatever happened to corporate civic leadership? A previous generation of CEOs would have been ashamed to be compensated so lavishly while their companies abandoned responsibility for paying their fair share. They would have been embarrassed to go year after year contributing little or nothing to the public investments that make the United States a vibrant business environment.

Here are a few examples of these champion tax-dodgers:

• Chesapeake Energy paid its CEO Aubrey McClendon $21 million last year but paid zero federal corporate income tax in 2010. Chesapeake is fracking the tax code, drilling it for every possible subsidy it can extract — while lobbying to preserve antiquated tax breaks for oil and gas industry.

• Online retailer eBay paid its CEO John Donahoe $21.4 million last year while collecting a federal tax refund of $131 million. eBay’ 31 subsidiaries in Switzerland, Singapore, and seven other tax havens facilitate its efforts to move money around the planet as a tax-dodging strategy.

• Insurance giant Marsh & McLennan paid its CEO Brian Duperrault $14 million yet collected a $90 million tax refund from Uncle Sam. The company has 105 subsidiaries in 20 off shore tax havens, including 25 in Bermuda  — a favorite locale for insurance companies seeking to avoid both taxes and regulation.

These super-moocher companies happily benefit from the privileges and advantages of doing business in the United States. If a competitor tries to steal their product or idea, these corporations rush to the U.S court system and law enforcement agencies for remedies and justice. The U.S. military guards their global assets.

They use the fertile ground of publicly funded research and infrastructure to bolster their own profits. They create new products from a foundation of Uncle Sam’s investments in medical and scientific research and government funded technologies like the Internet. Our taxpayer-funded roads, ports, and bridges bolster their business environment. Our public schools and universities educate the workers these companies rely on. In fact 16 of these 25 CEOs attended public universities. They personally were educated with help from U.S. tax dollars.

These CEOs profess to love America. But when it comes time to pay the bills, they’d rather outsource that job over to you or the small business down the road.

Congress should pass the Stop Tax Haven Abuse Act which would limit some of these tax shenanigans. In the face of growing fiscal austerity, these companies should contribute to the solution and pay their fair share of U.S. taxes.

For more information, see the new Institute for Policy Studies report, Executive Excess 2011: The Massive CEO Rewards for Tax Dodging.

By Chuck Collins & Alison Goldberg

Billionaire superinvestor Warren Buffett has done it again.  The Oracle of Omaha has made a bold and revealing statement about “taxing the wealthy.” In his  op-ed in Monday’s The New York Times, Buffett wrote, “While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks.”

Buffett revealed that his own effective tax rate –the percentage of his income that he actually pays –is far below his co-workers, thanks to how investment income is taxed at lower rates.  Buffett pays an effective rate of 17.4 percent, whereas most middle and upper income individuals pay over 30 percent of their income.  He revealed one of the dirty secrets of tax policy –the privileged treatment of income from wealth over income from work and wages.

We now need ten thousand more like Warren Buffett to speak up, people with incomes over $250,000 that know in their hearts that they should pay more.

Of course, we need an engaged public –people in the bottom 98 percent –to mobilize and press for tax increases on the wealthy before any further budget cuts.  But enlisting the voices of wealthy people for the common good is a key part of the strategy to change the political dynamics.

The good news is there are already several thousand who have stepped forward and spoken up. Several hundred business leaders and wealthy individuals have joined Patriotic Millionaires for Fiscal Strength, a joint initiative of the Agenda Project and Wealth for the Common Good. On June 7th, the tenth anniversary of the Bush Tax Cuts for the wealthy, they issued a powerful video calling on Congress to let the tax cuts expire.

These folks, in the top 2 percent of income and wealth holders, eloquently make the case that they have benefited from the generations of public investments that made their wealth possible.  They celebrate the fertile soil we have created together in US society for business and wealth creation and believe they have an obligation to future generations to pay their taxes so that others have the same opportunity.

Almost 500 high-income taxpayers support the Fairness in Taxation Act, that would increase top tax rates on millionaires, generating an additional $78 billion in urgently needed revenue.  This legislation would also tax both capital gains and wage income over $1 million at the same rates.  It would eliminate the “carried interest” loophole that enables billionaire hedge fund managers to have their income taxed at a low 15 percent.  This legislation would eliminate the economic distortions that come from taxing income from work at twice the rate as income from wealth and investments.

There are now thousands of business leaders and wealthy investors calling on Congress to stop aggressive tax corporate dodging.  They point out that it is bad for business when companies like General Electric and Verizon pay no taxes –and force patriotic domestic companies to compete on an unlevel playing field.

In early July, Senator Carl Levin reintroduced the Stop Tax Haven Abuse Act.  At a press conference Senator Levin was joined by spokespeople from Business for Shared Prosperity and the Business and Investors Against Tax Haven Abuse campaign. Rep. Lloyd Doggett introduced a version in the House.

Polls show that the public supports raising taxes on millionaires and closing offshore corporate tax shelters as part of getting our fiscal house in order.  Yet the Tea Party Republicans have pledged to destroy the economy before raising taxes on their rich patrons.  The bottom 98 percent needs to get organized  –in mobilizations like the “Other 98 Percent” –to press for tax fairness. But it will enormously help the cause to have more of those who will pay these taxes step forward and speak up.

In our organizing work at Wealth for the Common Good, we share Warren Buffett’s view that many of the rich “love America and appreciate the opportunity this country has given them…Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.”

Polls show that wealthy people know the tax code is getting less fair and is out of balance.  But many of them –like the population as a whole — don’t feel the intensity about tax fairness that they feel about other pressing matters such as education, children’s health, and ecological degradation. Very few people of any economic class feel passionately about tax fairness –to the point where we are politically engaged.

Now is the time for all of us to understand how important this tax debate is –and that everything we care about is under attack by the current drift in politics.  We have to get real fired up about tax fairness.

Revenue must be on the table as part of debt and budget debates in the coming months. Congress must let the Bush tax breaks for the wealthy expire, increase top tax rates for millionaires, and eliminate aggressive corporate tax dodging.

Right now, our silence is consent to the status quo of budget cuts and unequal sacrifice. We need millions of ordinary citizens to speak up.  And to compliment this, we need tens of thousands of our nation’s business leaders and wealthy individuals to speak out.

The alternative is austerity for everyone but the rich –and a growing economic apartheid in America.

If the companies that offshore their profits and design tax scams paid their fair share, we might not have a budget crisis.

Like a pack of men in suits mud wrestling, Washington’s budget battle would be entertaining to watch if we the people weren’t about to get hurt.

The zeal of Republican lawmakers and their compliant counterparts in the Democratic Party to slash spending on Medicare, Social Security, Medicaid, and the other essential programs will lower the quality of life in our communities and take a toll on public health.

Off to the side of the mud pit, however, is a $1 trillion dollar idea that would support patriotic U.S. businesses, discourage job exports, and restore fairness to our tax system. It’s an idea that already commands widespread public support. It deserves broad bipartisan political support too.

In the last two weeks, congressional leaders, led by Democrats Carl Levin of Michigan in the Senate and Lloyd Doggett of Texas in the House, have introduced an updated version of the “Stop Tax Haven Abuse Act.” Their proposal would shut down the offshore tax loopholes that encourage corporate tax dodging.

Over the last year, we’ve learned that there are dozens of profitable and prominent U.S. companies that pay either no or very low corporate income taxes. These include Verizon, General Electric, Boeing, and Amazon. One of these companies’ common gimmicks is to shift profits to subsidiaries in low-tax or no-tax countries like the Cayman Islands. They pretend corporate profits pile up “offshore,” while their losses accrue in the U.S., reducing or eliminating their company’s obligation to Uncle Sam.

Yet these same companies use our public infrastructure, hire workers trained in our schools, and depend on the U.S. court system to protect their property. Our military defends their assets, yet they’re not paying their share of the bill. In wartime, the unequal sacrifice and tax shenanigans of these companies is very unseemly.

Corporate tax dodging hurts Main Street firms that are forced to compete on an unlevel playing field. “Why should we be subsidizing U.S. multinationals that use offshore tax havens to avoid paying taxes?” asked Frank Knapp, CEO of the South Carolina Small Business Chamber of Commerce at a press conference where the legislation was introduced.

The Stop Tax Haven Abuse Act would end tax games that are costly, harmful to domestic U.S. businesses and workers, and blatantly unfair to those who pay our fair share of taxes. These same offshore systems facilitate criminal activity, from drug money laundering to terrorist financing networks. Smugglers, drug cartels, and even terrorist networks like al-Qaeda thrive in secret offshore jurisdictions where individuals can hide or obscure the beneficial ownership of bank accounts and corporations to avoid any reporting or government oversight.

The offshore system has spawned a huge tax-dodging industry. Its teams of lawyers and accountants add nothing to the efficiency of markets or products. Instead of making a better widget, companies invest in designing a better tax scam. Reports about General Electric’s storied tax dodging dramatize the ways that modern multinationals view their tax accounting departments as profit centers.

The combination of federal budget concerns and a growing public awareness of corporate tax avoidance promises to focus greater attention on this proposal than past years.

As leaders in Congress debate how to wring out $2 trillion to $4 trillion in deficit reductions over the next decade, this legislation should be at the top of the bipartisan list. The Stop Tax Haven Abuse Act would generate an estimated $100 billion in revenues a year. That’s $1 trillion over the next decade.

Lawmakers should also reject calls, currently being debated in Congress, for a tax holiday for corporate tax dodgers,. A coalition of global companies, including Google, Apple, and drug giant Pfizer, have stashed an estimated $1.2 trillion in profits offshore. They want to repatriate their profits at drastically reduced tax rates.

Congress should vigorously oppose a “tax holiday” for these tax dodgers. Instead of rewarding fiscally irresponsible behavior, lawmakers should fix the root cause of the problem and outlaw tax haven abuse.

Originally Published at OtherWords.

10 years on, the Bush tax cuts are a disaster—and we’re contemplating more tax breaks for the wealthy. How can we stop the madness?

GOP candidate Tim Pawlenty observed the 10th anniversary of the Bush-era tax cuts by proposing $2 trillion in additional tax cuts, primarily for millionaires and global corporations.

Have we learned nothing?

A decade since their passage, its clear that the Bush tax were a $2.5 trillion mistake that put us on the road to fiscal instability.

At the time they were passed, Congressional budget analysts projected a $5.6 trillion surplus over these last ten years. But even after the rosy projections turned to red ink, the tax cut bonanza continued. As a result, Congress engaged in a “decade of magical tax cut thinking,” responding to the deep economic challenges of the last ten years with a one-point program: cut taxes for the wealthy and expand tax loopholes for global corporations.

In 2001, Bob McIntyre of the group Citizens for Tax Justice argued that the tax cuts were a bad idea—that they were overly tilted to benefit the rich—and would eventually lead to deficits. Last week, in the face of massive deficits and deep cuts to crucial programs, CTJ released a report projecting that another ten-year extension of the Bush tax cuts would cost $5.5 trillion.

“There are some in Congress who believe that the best way to deal with the struggling economy right now is to extend the tax cuts and see if they work the second time around,” said McIntyre. “They didn’t work the first time, and they aren’t going to work the second time.”

A report from the Economic Policy Institute points out that the Bush tax cuts cost over $2.5 trillion over the last decade. An estimated 38 percent of those tax cuts—almost $1 trillion—went to households in the richest 1 percent, those with incomes over $645,000. Tax cut beneficiaries include some of the highest paid CEOs in America.

Bleak Moment or Emerging Movement?

At first glance, the prospects for shifting this anti-tax environment appear bleak. GOP presidential candidates and Congressional leaders are beating the same drum: “We’re broke,” “Deficits Kill Jobs,” “Must Cut Taxes…”

Behind the headlines, however, public attitudes are shifting. A growing number of citizens are taking on the fundamental unfairness of the current tax system. They see how growing inequality is destroying the middle class and contributing to economic instability.

Historically, public attitudes about taxing the wealthy have been somewhat ambivalent. In the abstract, many U.S. voters are reflexively anti-government and anti-tax. But when it comes down to the concrete ways we use tax revenues, citizens want a responsive government that includes retirement security, environmental protection, healthy communities, and the wide range of public services that we enjoy.

As states and the federal government make deep budget cuts, the things people appreciate about government will start to deteriorate or go away: the bus will be late, the state park closed, the school art department gone, the police unavailable.

Though GOP congressional leaders talk austerity and imply that the only solution to budget deficits are spending cuts, a strong majority of people in the U.S. want to put raising taxes on the table.

Public opinion polls reveal that over 72 percent of the public favors increasing taxes on millionaires and closing tax loopholes before further budget cuts. And support for progressive taxes will only increase as the impact of budget cuts further degrades the quality of life, public services, and infrastructure in our localities.

Revelations that huge corporations and the wealthy are paying historically low tax rates are fueling this public attitude shift. Recent IRS data reveals that the richest 400 U.S. taxpayers have seen their effective tax rates fall to their lowest levels since prior to the 1930s Great Depression. The cover story in Business Week during April’s tax season was “The Billionaires Guide to Paying No Taxes.” And reports that General Electric pays no federal taxes—and that other companies including Verizon, Federal Express, Boeing and bail-out recipient Bank of America pay no or ridiculously low taxes—touch a deep nerve.

The grassroots US Uncut movement has emerged to draw attention to the powerful juxtaposition between budget cuts and corporate tax dodging. As a result, the public conversation is shifting. A year ago, the Tea Party narrative dominated April 2010 tax day. This year, however, the news on Tax Day focused on millionaire and corporate tax deadbeats.

The 10th anniversary of the Bush tax cuts focused new attention on the irresponsibility of further tax cuts. Grassroots groups convened actions and press events around the country to dramatize the link between the tax cuts and local budget cuts that worsen unemployment.

Activists are coalescing around a number of revenue proposals that could raise trillions of dollars over the next ten years. One initiative is the Fairness in Taxation Act, introduced by Illinois Congresswoman Jan Schakowsky. Her legislation would add additional tax rates for millionaires, generating $74 billion a year. In an op-ed in the Chicago Tribune, Rep. Schakowsky writes, “Middle-class and low-income families didn’t create these budget deficits or reap economic rewards over the last generation. So our nation’s plan to get our fiscal house in order should not sacrifice the vitality of our middle class and our commitments to address poverty.”

An organized group of 200 millionaire business leaders added their voices to the debate. The Patriotic Millionaires, organized by the Agenda Project and Wealth for the Common Good, released a video message to Congressional leaders to increase taxes on millionaires. “It is self-defeating to pursue these tax policies, and it is inconsistent with our values as Americans,” said Dennis Mehiel, Chairman of US Corrugated at a press conference on the tenth anniversary. “We need to throw out the Bush tax cuts in a hurry and begin the process of restoring some fiscal sanity to the country’s budget.”

Business leaders are also speaking up about troubling economic implications created when global corporations use offshore tax shelters to dodge taxes. Paul Egerman, founder of eScription, wrote in the Madison Capital Times, “it is myopic to require domestic enterprises to compete on an unlevel playing field against another company based not on product quality and services, but on accounting gymnastics.” A new business coalition is backing the Stop Tax Haven Abuse legislation that will be reintroduced later this June.

Opposition is also building against the idea, lobbied for by companies like Google, Apple, Pfizer, and Oracle, of a “tax holiday” for corporations that have shifted more than $1 trillion in profits to offshore tax havens—a move that would cost the U.S. Treasury $80 billion. Business for Shared Prosperity is circulating a business sign-on letter to Congress calling on them to “reject demands by U.S. multinationals for a tax holiday to “repatriate” the funds they shifted offshore to avoid paying taxes.” Last week, US Uncut began to challenge Apple Computer for its role in lobbying Congress for a “tax holiday” for corporations that have moved over $1 trillion in corporate profits to offshore tax havens.

The message of these emerging movements is getting louder: No more budget cuts until millionaires and corporate tax dodgers pay their fair share.

Originally Published at YES Magazine

As you pony up to pay your taxes –or fill out forms to get back a portion of what Uncle Sam has already withheld from your paycheck – pause to contemplate how wealthy and corporate tax dodgers deal with Tax Day.

If you write a check over $10 to the IRS, then you just paid more than Verizon, Boeing, Bank of America, Citigroup and General Electric combined in federal taxes.

And you may have paid a higher percentage of your income than the billionaires who appear on the pages of the Forbes 400.  As super-investor Warren Buffet has pointed out, he pays a lower actual tax rate than his secretary.

Business Week’s cover story this week is “The Billionaires Guide to Paying No Taxes.”  Reporter Jessie Drucker declares, “the more you make, the less you pay.”  For our nation’s millionaires and billionaires, “this could be the best tax day since the early 1930s.”

Don’t worry, we’re assured, these wealthy investors and global corporations are the great productive engines of the American economy.  To tax them at all, we are told, would be to “kill jobs” and hurt the economy.  In fact, we should pay them –like the $3.2 billion we taxpayers funneled to General Electric last year in various forms of tax breaks and subsidies.

Here’s the thing:  If you gave me $3 billion –I would create jobs too.  Or if our society invested in green infrastructure and our small domestic U.S. business sector, we’d create even more jobs.  But the key question is what kind of country do we want to be –and how will we pay for it together?

When we hear our governors and lawmakers lament that “we’re broke,” consider this fact: If corporations and households with $1 million income paid at the same levels they did in 1961, the Treasury would collect an additional $716 billion a year –or $7 trillion over a decade.

Our budgetary stress is the result of declining revenue, thanks to the economic downturn and decades of tax cuts.  A new report that I co-authored, Unnecessary Austerity, argues that before we make draconian budget cuts at the federal and state level — we should reverse huge tax cuts for the wealthy and tax dodging corporations.

There are two important explanations behind our current budget “squeeze.” First, income and wealth have become extremely concentrated in the hands of the super wealthy. The richest 1 percent of households own over 35.6 percent of all private wealth, approximately $20 trillion. The number of households with incomes exceeding $1 million has grown from 15,753 in 1961 to 361,000 today, adjusted for inflation.  Meanwhile the middle class standard of living is collapsing and poverty rates are at a 15-year high.

Second, we’ve dramatically reduced taxes on these wealthy households and the global corporations they largely own. Congress and special interest lobbyists have made mincemeat of our tax code, losing hundreds of billions in revenue. A new study from Public Campaign shows that a dozen companies spent over $1 billion on lobbying Congress for subsidies and tax breaks.

That’s how a profitable company like General Electric legally and aggressively avoids taxes. Since 2006, General Electric has reported over $26 billion in profits, yet paid not one penny in U.S. taxes.

In his new book Treasure Islands, journalist Nicholas Shaxson describes how these artful tax dodgers use accounting gymnastics to move money to overseas tax havens like the Cayman Islands or Ireland. They pretend to earn their profits offshore and then report their paper losses here in the United States—reducing or eliminating their U.S. taxes.

Our “Unnecessary Austerity” report identifies over $4 trillion in potential revenue over the next decade. Closing offshore tax havens could generate an estimated $100 billion a year.  Adding new top tax brackets for millionaires could generate another $60-80 billion.  Instituting a financial transaction tax could generate $150 billion a year.

Public opinion polls show that the majority of voters would rather hike taxes on millionaires and tax dodgers before budget cuts.  But with Congress captured by corporate interests, it’s going to take a powerful movement to push back.  The emerging US UNCUT movement is pressing the point: “No Budget Cuts before tax dodgers pay up.”  There are over 100 actions planned for this tax weekend to underscore this point.

Without such a social movement, reasonable solutions will be drowned out by the drumbeat of “we’re broke.”

Government must stop doling out ever-larger tax breaks to the superrich and vast corporations.

Have you heard? America is broke, according to many governors and lawmakers.

They’re calling for deep cuts in teacher pay, firing cops, slashing medical services for working-class kids, and scrapping other essential services to narrow state and federal budget deficits.

There’s a better and fairer way to tackle this situation. Government must stop doling out ever-larger tax breaks to the superrich and vast corporations.

Around the country, states and towns are gutting their budgets, undermining the quality of our lives.

“Our country is not really broke,” said Cynthia Carranza who directs a food pantry in Niles, Illinois. Carranza witnesses the growing number of hungry people at her food pantry door even as government support for her program is slashed. “We’re an incredibly rich and prosperous nation. But our wealth is skewed to a very few fortunate at the top. We’re not broken, just twisted.”

Our communities are enduring mammoth state and federal budget cuts because we have, in large part, failed to sufficiently tax America’s millionaires and billionaires or prevent aggressive tax avoidance by multinational companies. The rest of us are paying to pick up the slack.

Congress has blown holes in our tax code, losing hundreds of billions in revenue. Worse, lawmakers have averted their eyes as corporate lobbyists drill new tax loopholes and extract new corporate welfare subsidies.

How else can we explain how a profitable company like General Electric pays no taxes? Since 2006, General Electric has reported over $26 billion in profits, yet paid not one penny in U.S. taxes. It gets worse. They’ve actually received more than $4 billion in subsidies and corporate welfare.

GE isn’t alone. Other huge global companies such as Verizon, Boeing, ExxonMobil, and Bank of America also pay no taxes. These artful dodgers aggressively solicit government subsidies and use accounting tricks to move money to overseas tax havens like the Cayman Islands. They pretend to earn their profits offshore and then report their paper losses here in the United States–so they don’t have to pay the IRS a dime.

Wealthy individuals have also benefited from a half-century of tax reductions. If U.S. millionaires and billionaires paid taxes based on 1961 tax rules, we would have raised an additional $231 billion in federal revenue this year.

By reversing years of tax giveaways to America’s rich and the corporations that enrich them, Congress could raise trillions in revenue. We could fund the public structures that safeguard our families and our future.

There are four revenue raisers that Congress could institute tomorrow that would generate $400 billion a year–or $4 trillion over the next decade. Such programs would restore greater fairness to our tax system and reduce the extreme levels of inequality polarizing our society.

Congress could levy a modest financial transaction tax on the transfers of stock, currency, and speculative investments that do little to strengthen the real economy. This would generate $150 billion a year while exempting smaller investors.

Lawmakers could reduce corporate tax dodging by closing overseas tax havens and requiring companies to pay U.S. taxes on the profits they actually earn in this country. This could generate as much as $100 billion a year.

Congress could establish new top tax rates on households with annual incomes over $1 million, which could generate another $100 billion a year. Under our current tax system, a person earning $374,000 a year pays the same top tax rate as someone earning $10 million a year.

Lawmakers could institute a progressive estate tax on fortunes over $5 million, with higher rates on billionaire estates. That would generate $45 billion a year.

Taking all four of these straightforward steps could raise a total of approximately $400 billion per year.

Sure, some politicians would rather cut services for children and the mentally ill before they dare to propose tax hikes on millionaires and tax-dodging corporations. But that doesn’t mean we’re broke. It just means we need to get our priorities straight.

Originally Published in OtherWords.

Do You Pay Your Taxes?  Bank of America Doesn’t

In 2009 and 2010, according to their SEC K-10 report, filed on Friday, Bank of America paid no taxes. Meanwhile, the federal government and many state governments, facing large budget shortfalls, are cutting services and benefits that help the poor and middle class. For many people, that just doesn’t add up.

On Saturday Feb 26th, many of those people took to the streets in cities across the country to protest corporate tax dodging. In more than 50 cities, those protests focused on Bank of America.

Local activists protested inside and outside of Bank of America branches, conducting teach-ins about corporate tax avoidance and theatrical “bail-ins.”  They stopped passers-by to ask, “Do you pay your taxes? Bank of America doesn’t.”

In Washington, D.C., and San Francisco, protests forced the early closure of major bank branches. The San Fransico protestors presented bank tellers with fake checks, made out from Bank of America to “The United States of America, c/o Tax-Paying Citizens.”

This effort, called U.S. Uncut, has been inspired by UK Uncut, which formed in response to drastic spending cuts—the deepest in 60 years—being proposed in Britain. Tens of thousands of English activists have targeted corporations that have paid no or very low corporate income taxes, largely thanks to elaborate use of overseas tax havens and other tax loopholes, pointing out that the cuts would be unnecessary if only the corporations would pay up.

As in England and across the Middle East, the decentralized protest movement now underway in the United States is organized largely through the Internet, including Facebook, Twitter, and the website www.usuncut.org.

These protests are putting a spotlight on the shadowy world of overseas corporate tax havens.  Irresponsible U.S. corporations shift their earnings around, reporting losses in the U.S. while reporting profits in tax havens like the Cayman Islands, where they pay little or no taxes.

Nicholas Shaxson, author of the forthcoming book Treasure Islands, writes that tax havens are a major mechanism through which “wealthy and powerful elites take the benefits from society without paying for them.”

Congressional budget officials estimate that over $100 billion a year is lost because of such tax loopholes. That would go a long way toward closing state deficits—according to the Center on Budget and Policy Priorities, the combined budget gaps in U.S. states is between $102 billion and $148 billion.

Protests against corporate tax dodging could be one of the ways that the spark of the Wisconsin workers’ rights protests could spread widely.  While not every state has a reckless anti-union governor like Scott Walker or the union solidarity to push back, the whole country is facing serious budget cuts.

The U.S. movement officially started two weeks ago in Jackson, Mississippi, where 23-year old Carl Gibson, in between working three part-time jobs, organized a website and the first group. Within days, other groups were being formed in dozens of cities across the United States and Canada.

“Why has the knee-jerk reaction for our politicians been first and foremost budget cuts to critical social services?  They tell us that no other options are on the table, yet cracking down on corporate tax avoidance has received little, if any attention,” said George Taghi, an organizer for the Washington, D.C., Uncut action.

What’s Next?

There will be another wave of protests, focusing on other tax-dodging corporations with high profiles and retail outlets. You can organize a local demonstration and coordinate it through the US Uncut web site: www.usuncut.org or on Facebook: http://www.facebook.com/usauncut.

The newly fledged groups are planning to make April 15, tax day, a day of national demonstrations calling attention to corporate tax doding—and its effect on budgets.

Small and U.S.-rooted businesses, competing with tax dodgers on on an unlevel playing field, are fighting back, organizing their voices under the banner, Business and Investors Against Tax Haven Abuse. Businesses of any size can get involved here: www.businessagainsttaxhavens.org

Originally Published by YES! Magazine