Sunday, January 1, 2012

My Fair Lady

For all the years I've lived, you'd think I be accustomed to it, but I still find human nature strange, if not bizarre.

I'm still flummoxed by it.

Sure, I'm aware that people can, and will, do certain things out of the ordinary--things for which I'm always scratching my head in total amazement, bewildered beyond words.

And when they do, I'm taken aback, sometimes pleasantly when they offer a kindness (such as holding a door open), and sometimes exceedingly perplexed, especially when people behave in ways that are foreign to my sensibilities, and my expectations.

One instance from my life will serve to illustrate this. I once worked for an organization that required that some of us meet at least once every other month to coordinate system-wide activities. We were a fairly good size group, perhaps as many as thirty or forty of us.

We would meet at various locations throughout the system and the meeting organizer from each location was responsible for providing morning refreshments, and arranging for a restaurant that would accommodate our number for lunch, as it was customary for us all to eat at the same time, and in the same place.

When the collective bill arrived, each would pay for what they had ordered, and, in a similar fashion, each would leave tips, in the middle of the table according to the generosity of each, or how each felt about the quality of the service.

On one occasion, the tip was left as usual, a fairly large amount, as there were many in our number, and the service had been excellent.

Most of us had filed out of the room where the lunch tables and chairs had been assembled, with me and another straggling behind, my companion straggler a well-respected, middle-aged woman, who had stopped suddenly to eye the pile of money that constituted our collective tip, left there by those who, after settling up, fully expected that the money that remained on the table would go to the restaurant staff that brought the food and drinks to our table.

With out hesitation, my coworker reached into the pile and withdrew a handful of the bills deposited there. "That's too much money for a tip," she said simply, and stuffed the money into her coat pocket and walked out.

I was stunned.

Not only did she take an unwarranted initiative, she had, in effect, stole money, stealing it twice--first, from those who waited on the table, and then from those who had left the money as a tip.

Not only did my coworker not pay her fair share, she took from those who had.

Some corporations are like my coworker: Not only do they not pay their fair share (using tax loopholes, and tax dodges), they also take from those of us who do pay our fair share. (Click to enlarge chart.)

Here's how the headline reads from this International Business Times article: 30 Major U.S. Corporations Paid More to Lobby Congress Than Income Taxes, 2008-2010. [1]

By employing a plethora of tax-dodging techniques, 30 multi-million dollar American corporations expended more money lobbying Congress than they paid in federal income taxes between 2008 and 2010, ultimately spending approximately $400,000 every day -- including weekends -- during that three-year period to lobby lawmakers and influence political elections, according to a new report from the non-partisan Public Campaign.

The Public Campaign, a non-partisan research and advocacy organization, reports 30 major U.S. corporations spent more money lobbying Congress than they did on federal income taxes between 2008 and 2010.

Despite a growing federal deficit and the widespread economic stability that has swept the U.S since 2008, the companies in question managed to accumulate profits of $164 billion between 2008 and 2010, while receiving combined tax rebates totaling almost $11 billion. Moreover, Public Campaign reports these companies spent about $476 million during the same period to lobby the U.S. Congress, as well as another $22 million on federal campaigns, while in some instances laying off employees and increasing executive compensation.


This revelation is enough to make one take to the streets and start a blood-less revolution--a new movement. Perhaps we'll call it the Occupy Wall Street movement. Wait a minute: Don't we have such a movement already?

Not only do we have such a movement, with each passing day, certain information comes to light to justify its existence, and to silence those critics who have done all that they could on behalf of these offending corporations to besmirch the movement.

And if you believed that it is only the federal government that's being stiffed by these corporations, think again:

"Our report shows these corporations raked in a combined $1.33 trillion in profits in the last three years, and far too many have managed to shelter half or more of their profits from state taxes," Matthew Gardner, Executive Director at the Institute on Taxation and Economic Policy and the report's co-author, said in a statement. "They're so busy avoiding taxes, it's no wonder they're not creating any new jobs."

According to the report, titled "Corporate Tax Dodging in the Fifty States, 2008-2010," state corporate tax revenues have been declining for 20 years, due to the passage of multiple state tax subsidies, as well federal tax breaks that further reduce state corporate income tax revenues since states usually accept corporations' federal tax. Moreover, Gardner said multi-state corporations are constantly "devoting their money and legal firepower to coming up with tax avoidance schemes."

Between 2008 and 2010, the 265 companies analyzed paid state income taxes equal to only 3 percent of their U.S. profits, half of the statutory 6.2 percent state corporate tax rate. As a result, these companies avoided a total of $42.7 billion in state corporate taxes over three years.


What is the Republican position on all this? They believe that these supposed corporate job creators shouldn't have to pay more taxes (their fair share)--and, if they had their way, no taxes at all. But are these tax-avoiding corporations actually creating jobs?

Even while dodging most of their state and federal taxes between 2008 and 2010, Verizon (VZ) laid off more than 21,000 U.S. employees, while Boeing, Wells Fargo, General Electric, American Electric Power, and FedEx also let go of thousands of workers. Because companies can be reluctant to make data changes in U.S. employment available, Public Campaign reports it was not able to find up-to-date employment statistics for many of the companies evaluated in the report.

Moreover, as it was laying off employees, General Electric gave their top executives a 27 percent pay raise between 2008 and 2010 -- executives received more than $75 million in compensation in 2010. Wells Fargo increased executive pay by a whopping 180 percent, upping executive compensation from $17.8 million in 2008 to almost $50 million in 2010, while Boeing, FedEx and American Electric Power also instituted lavish executive pay raises while laying off thousands of lower-level workers.

In fact, 2010 year was a record year for executive compensation. The CEO's of some of the largest U.S. corporations made, on average, $11.4 million in 2010, about 343 times more than workers' median pay, according to an analysis by the American Federation of Labor, the widest gap between executive and employee pay in the world. CEO pay has skyrocketed since 1980, when chief executives were only paid about 42 times more than the average blue collar worker.


Corporate compensation is symptomatic of the income disparity that's become a gaping hole in our economy, looking more like a chasm than a ditch. For better or for worse, corporations are now elevated to the status of gods, permitted to do pretty much as they choose with little or no interference from government regulators, and with politicians at all levels tripping over themselves to regale them with gifts of additional tax breaks, some of which come in the form of negative effective tax rates, tax cuts, and a potential tax reparation holiday:

A negative effective tax rate means that a company enjoyed a tax rebate, usually obtained by carrying back excess tax deductions and credits to an earlier year, thereby allowing the company to receive a tax rebate check, according to Citizens for Tax Justice.

U.S. House Deputy Whip Kevin Brady, R-Tex., is currently making a last-ditch effort to include a corporate tax repatriation holiday on legislation to extend a payroll tax cut....While those in favor of the corporate tax repatriation provision -- which would give U.S. businesses a temporary tax break on as much as $1 trillion in overseas income -- insist it would boost the nation's sluggish economy and make it easier for corporations to create jobs, the Congressional Budget Office reports tax repatriation holidays ranks dead last among 13 policy options for creating jobs. The CBO estimates that over the 2012-2013 period, a repatriation holiday would, at best, create the equivalent of one-full time job for every $1 million in federal costs.


My Fair Lady, my coworker of many years, not only was unfair, so, too, are many of the corporations that make this fair nation their home. Not only have these corporations transferred the tax burden of supporting this country to the average taxpayer, they have become, despite this, one of the chief recipients of government largess--the backing of the world's largest, and most powerful military, and the support of practically every politician in the country, many in the courts, and, at times, the executive branch.

Unfortunately, these corporations have money to burn, and it's burning the pockets of legislators and judges, who, increasingly, are more anxious to fill their campaign coffers, than fill state and national treasuries.


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6 comments:

msladydeborah said...

I really liked your opening into this post. I use to work as a server and believe me, I have had to literary pry my tips out of someone's hand because they thought I earned too much. I have always believe that this type of behavior is a form of greed on their part. Much like the corporations who are encouraged to avoid doing the right thing.

Until there are enough people aware and willing to stand up and demand justice, this type of behavior will continue.

We just have to keep on sharing information and trying to make everyone aware of the real problems within our society.

Black Diaspora said...

@msladydeborah: Thank you.

"I have always believe that this type of behavior is a form of greed on their part. Much like the corporations who are encouraged to avoid doing the right thing."

Of all human shortcomings, "greed" rarely gets the attention it deserves. You'd think that it would, given that it is at the heart of much of the evil we see played out in our world.

Perhaps it's our capitalistic system that makes us unwilling, as we're told that "Greed is good," as we pay deference to the wealthy among us, while at the same time scorning the poor.

It has a kind of Puritan feel to it: The poor are damned, while the industrial wealthy are blessed with God's special grace.

"Until there are enough people aware and willing to stand up and demand justice, this type of behavior will continue."

The Occupy Wall Street protesters are sounding the alarm, and many are listening, but there are others who're doing their utmost to mute the sound, fearing that, if people do "stand up and demand justice," their gig is up.

And where would Fox News, Rush Limbaugh and other propagandist be without their million of minions to keep them rolling in the cash, and number one in their respective venues?

Greg L said...

Another excellent post here my friend. In my experience, there are two sets of tax laws; one set for the super wealthy and influential and another set for the rest of us. Expenditures for lobbying pays and the tax favors they get get recycled back to those who've arranged for them. It's corruption at its finest and marks a low point in American history in general. Quite frankly, we're gonna to have hell to pay because of all of this.

The entire idea of supply side economics, popularized under Reagan, is that cuts in marginal tax rates counter intuitively raise government revenues and spur economic growth, yet the empirical evidence of this is scant to non-existent. The ONLY thing this has done is create yawning budget deficits and accelerated wealth disparity in general. It also helps build share prices by leaving more profits on the table for shareholders--who, by the way, are also the recipients of favorable tax treatment. However, the capital markets (stock and bond markets) have been unhinged from the real economy for so long, that one would be hard pressed to suggest that an increase in prices for shares have anything at all to do with employment. It does not and has not for quite some time. Investing in the markets nowadays is about gambling rather than investing in productive enterprise.

What we have here is a badly listing ship and the favored few are being allowed to bum rush the lifeboats while the rest of us sit in steerage and are about to go down with the ship. For now, there are too many who are unaware of their position in this regard having gorged themselves on supposed American exceptionalism and all of the other crap that's been force fed to them by major media. When they wake up, and economic conditions will awaken them, it will be the French revolution redux.

GrannyStandingforTruth said...

I agree it was an excellent post. Disapora, I worked for I.R.S. in the past and I can tell you first hand that Corporations don't pay taxes, but they sure do shell out big money to a slew of lawyers to avoid paying them.

You learn a lot when you work for the government. I worked in three different government agencies before and boy was it an eyeopener. The good ole boy network was alive and well in Uncle Sam's house.

Black Diaspora said...

@Greg L: Thanks.

"In my experience, there are two sets of tax laws; one set for the super wealthy and influential and another set for the rest of us."

An arrangement contributing to the income inequality that's reducing the size of this nation's middle class, and the range of its opportunities--against which the Occupy Wall Street protesters rail.

"It's corruption at its finest and marks a low point in American history in general. Quite frankly, we're gonna to have hell to pay because of all of this."

The kleptocrats are smugly at peace with what they've wrought, believing that the people will tolerate any and all abuse at their hands.

I agree: A day of reckoning is coming, which congress is busy preparing for. Consider this: American citizens accused of terrorism can now be arrested and held indefinitely without a trial.

"Investing in the markets nowadays is about gambling rather than investing in productive enterprise."

Why lend money when you can speculate your way to wealth, and why use your own money when capital requirements aren't that onerous.

"When they wake up, and economic conditions will awaken them, it will be the French revolution redux."

Red Eye calls them suckers, those who drink the Republican Kool-Aid, and operate against their own best interest.

It's my hope that the revolution begins in the neighborhoods of those who lulled the people to sleep, and kept them asleep with one soporific lie after the other--Fox News, Rush Limbaugh, and other Republican pundits, who put money and their accumulated wealth ahead of their patriotic duty to inform people beyond political propaganda, and idealogical claptrap.

Black Diaspora said...

@GrannyStandingforTruth. Thanks, Granny.

"Corporations don't pay taxes, but they sure do shell out big money to a slew of lawyers to avoid paying them."

And this is the group that Republicans are protecting?

I'm told: Paying taxes if our civic duty. What does it say about those who don't pay them, and those who enable them to avoid paying them?

"The good ole boy network was alive and well in Uncle Sam's house."

It's not happenstance that our Representatives in congress are growing richer by the day, allowed to participate in insider trading (forbidden to others), and then leave congress to lobby congress over at K Street, not to mention those working in other agencies of the government who leave their government jobs for more lucrative ones in the private sector--those working for the Federal Reserve, and those charged with the responsibility of protecting us from the rapaciousness of Big Business.