This is the story of Kevin McQuaide and how the Trans-Pacific Partnership threatens his ability to earn a living. The TPP is a trade agreement that will stimulate the outsourcing of American jobs and devastate manufacturing.
Millions of Americans can’t get bank accounts, so they can’t even cash a check. Many millions more might have an account but can’t get even a small loan. The numbers (below) are just outrageous.
These millions are forced to turn to predators like the payday loan and check cashing industry. Even those who can get full-service accounts are scammed by the likes of Wells Fargo.
Meanwhile We the people are prevented by our captured-by-Wall-Street Congress from setting up the obvious solution that would solve so many problems: Postal Banking.
One of the biggest fights coming up in the newly elected Congress next year will be “corporate tax reform.”
If you follow policy news you’ve been hearing that Congress wants to “reform” corporate taxes (again). When you hear talk of “reform” from our corporate-captured Congress it means you need to run as fast as you can — and organize. The way they use the word, it always means give them more and We, the People get less.
Senator Schumer Talking About Massive Break On Taxes Corporations Already Owe
Senator Chuck Schumer (D-Wall Street) might be Senate Majority Leader after the election. In a Tuesday CNBC interview he said he is hoping to work with Republican House Speaker Paul “Gut the Government” Ryan on “some kind of international tax reform tied to a large infrastructure program.” In the interview Schumer said:
If you can get overseas money to come back here, even if it’s at a lower rate than the 35 it now comes back at, and you can use that money for a major constructive purpose such as infrastructure, if you did an infrastructure bank, for instance, you could get $100 billion in equity in the bank and get a trillion dollars of infrastructure.
When Schumer says “at a lower rate” he is talking about a “tax holiday” allowing corporations to pay less than the 35% tax rate they owe (minus deductions for taxes already paid overseas) on some $2.5 trillion of profits they have stashed in “overseas” tax havens. These corporations owe around $720 billion or so on those profits. So rewarding them for tax dodging with a lower tax rate means handing them up to hundreds of billions of dollars that the country needs for schools, health care and yes, infrastructure repair.
These tax-dodging, multinational corporations used schemes and tax havens to dodge paying taxes they owe. Meanwhile other corporations — usually smaller, domestic companies — paid their taxes. This gave the multinational corporations that used schemes and tax havens to dodge paying their taxes an advantage over the honest, domestic companies that did pay their taxes.
So why should Congress reward tax-dodging, multinational corporations by letting them keep some of the taxes they dodged, thereby punishing the domestic corporations that did the right thing for the country? See if you can guess why. (Hint: the tax-dodging corporations have “captured” Congress using a portion of that money.)
The corporations are also trying to sell “tax reform.” This “reform” is really just another huge corporate tax cut that is explained as a “revenue neutral” deal to “cut corporate tax loopholes” and use the resulting revenue to cut the corporate tax rate. The term “revenue neutral” means the tax revenue coming to the government stays the same. “Revenue neutral” sounds like a good deal but in reality it’s just a trick. It means taxes go up for some companies but way, way down for others. Guess which companies lose out. (Hint: it won’t be the giant multinational corporations that have captured Congress.)
The top corporate tax rate used to be 52 percent. Under Reagan it was 46 percent. Then Congress “reformed” taxes and dropped the rate to just 35 percent. Corporations used to shoulder 32 percent of the total tax burden. It has fallen to only 10 percent of the burden. That is a drop of two-thirds. See if you can guess who pays that two-thirds difference. (Hint: it isn’t corporations or their wealthy owners. It is cuts to schools, infrastructure, health care and all the things that used to make our lives better. This is one part of the economic squeeze everyone feels.)
On top of that they are also trying to sell a scheme that lets them off the hook for profits made outside of the country. See if you can guess how fast every corporation moves its profit centers and production out of the country if that passes. (Hint: every single corporation will move every job, factory, profit center etc out of the country if that passes.)
What Budget Deficit And Debt?
Our country has a budget deficit and a large debt caused by tax cuts and wars. The current hysteria over deficits is driven by corporate-and-billionaire-funded PR “think tanks” that pump out propaganda and hysteria 24/7/4/12. Can you guess what 24/7/4/12 means? (Hint: 24 hours, 7 days, 4 weeks, 12 months of the year.)
With a budget deficit and a large debt the fact is that a “revenue neutral” tax reform for corporations who have already had their tax rates cut and cut and cut is the very last thing the country needs to do. What we need to do instead is close that loophole that lets giant, multinational corporations hide $2.5 trillion in profits in “overseas” tax shelters, and make them pay the $720 billion or so of taxes they owe now, plus the $90-100 billion or so of taxes they will dodge every year after. Period.
Revenue neutral, Schumerutral. Just make these giant, tax-dodging, multinational corporations pay what they owe. Don’t reward them for tax-dodging. And restore the 52% corporate tax rate instead of cutting it even further.
One (more) of the way this country is split is a sharp divide between what small businesses need and what the giant, multinational corporations want (and usually get.) According to a coalition representing small businesses, Donald Trump’s policies would widen this divide, hitting small businesses hard.
Small businesses around the country are squeezed by the giant WalMarts and other national billionaire-owned chains that put local businesses out of business, pay low wages and few if any benefits, and then drain local and national resources by exporting their profits from the communities and states to offshore tax havens to dodge taxes.
The Main Street Alliance is a national network of state-based small business coalitions working with “real small business owners, on the ground, in their shops and restaurants.” They issued a statement warning that Republican presidential candidate Donald Trump’s prescription for America is wrong for the small businesses that speak for. Representatives of small businesses provided statements making their point.
Trump “brags of his massive and phenomenal wealth while skipping out on his taxes.” Billionaires using corporate fronts and various schemes to dodge their taxes are starving communities and states of the resources needed to provide good schools, infrastructure and the rest of the things government does to provide a foundation for local prosperity and business growth.
“Trump has exploited the tax system for decades and threatens the safety nets in place to help struggling business and families. Taxes are a cost of doing business and are essential in funding the infrastructure my business depends on”, said Doron Petersan, the owner of Sticky Fingers Sweets & Eats and Fare Well Diner Bakery Bar, in D.C. “Skipping out on your taxes year after year doesn’t make you qualified to rewrite our tax code, it qualifies you for an extended visit from the I.R.S.”
“Trump’s recently released tax plan would only worsen the unfair U.S. tax system by disproportionately benefitting the highest-income earners and putting a strain on the rest of us. We need to move away from a system that has been manipulated by greed and self-indulgence to create a tax code that levels the playing field, said Matt Birong, the owner of 3 Squares Café in Vergennes, Vermont.
Trump insults immigrants, during the Wednesday debate calling them “bad hombres.” He demands a giant wall that would “keep our customers, future business owners, and innovators out.”
“As an immigrant and the owner of an architecture firm, the walls I build are on homes, designed to keep families safe. We don’t build walls designed to keep good people out. It’s not how our country or our economy works. Trump’s idea of an immigration policy would be a disaster for our country,” said Francisco Garcia, the owner of The Building Workshop in San Diego.
“This country depends on a strong immigrant community. Any ‘business’ person who uses these hard-working employees to make millions, but turns on them for political gain, is no leader to fit to hold our nation’s highest office,” said Alma Rodriguez, the owner of Queen Bee’s Art and Cultural Center.
To see the Clinton campaign’s positions on small businesses, click here.
Much of Congress is captured by corporate money. So literally nothing gets through Congress if it interferes with the corporate/1% -boosting agenda. Many in the federal regulatory agencies are captured by promises of corporate payoffs after leaving government, so these agencies do almost nothing to crack down on corporate abuses of We the People.
At the state level, the corrupting power of corporate and billionaire money can have an even greater effect. For example, after the Republican-dominated Supreme Court opened up the floodgates of corporate money with the Citizens United decision, that money helped Republicans take over statehouse after statehouse.
In these states, taxes on corporations and the wealthy were cut, and schools, roads, healthcare and the rest of the things government does to make the lives of We the People better were gutted. In other states, corporate money blocks needed taxation and essential government programs.
With corporate and billionaire money determining the outcome of policy decisions at the national and state levels, people in the cities and states are using ballot initiatives to try locally to take back power. Around the country we’ve seen successful efforts to pass measures such as minimum wage increases, fracking bans and anti-tobacco initiatives.
Oregon’s Measure 97
Oregon’s Measure 97 ballot initiative is one example of We the People trying to take back control of government from the 1% and their powerful corporations.
Oregonians will vote soon on taxing larger corporations to protect programs that help Oregon’s people instead of just the wealthy and their corporations. Specifically, Measure 97 would increase the minimum tax for large and out-of-state corporations with more than $25 million in annual Oregon sales.
This is not a tax increase, this is requiring corporations that might otherwise dodge taxes to pay a minimum tax to generate money to cover the state’s budget needs.
The NY Times summed up the effect Measure 97 would have in September’s report, Measure 97, Seeking to Raise Corporate Taxes, Splits Oregon Voters,
If approved by the voters here in November, Measure 97 would create the biggest tide of new tax revenue in any state in the nation this year as a percentage of the budget, economists said — and one of the biggest anywhere in recent history. Oregon’s general fund would grow by almost a third, or about $3 billion a year, through a 2.5 percent tax on corporate gross receipts. The initiative language says the money would augment state spending on education, health care and senior services, but does not bind the Legislature to a specific plan.
Make large corporations — many of which take the profits out of the state — pay at least minimal taxes.
With that money Oregon gets to maintain or increase programs like:
● special education,
● hire 7,500 teachers,
● provide PE & Arts classes and make sure there is a nurse at every school,
● add 2 weeks to the school year,
● fund a statewide, modern public health system
● maintain Oregon’s Cover All Kids, a Basic Health Program,
● expand health insurance subsidies for working families
● provide mental health and substance abuse care,
● providing in-home assistance to 15,180 more seniors, and
● fully fund Adult Abuse Prevention to investigate every case of possible abuse or neglect.
That’s good trade-off, which brings out lots of supporters. The Vote Yes On 97 website says that, “6,000 volunteers, over 1,250 endorsements from community organizations, economists, parents and teachers, local leaders, and over 435 Oregon businesses.” Click here to see the list of businesses, educators, community groups, labor unions, elected officials, and community leaders
Darlene Huntress, associate director of Unite Oregon, says of Measure 97,
“This is about corporations investing in communities. With the budget shortfall that we have this is about taxing corporations, many of which aren’t paying taxes now. what this could do for education, health care and senior services is a real gamechanger.
On top of that Unite Oregon works with communities of color, immigrants and refugees. Many of these corporations are the same corporations that have invested in private prisons and detention centers. We’d prefer this money was invested in our communities instead of invested in separating families.”
The Times’ report also lays out who is for and against Measure 97, (hint: the usual suspects)
Labor unions, led by teachers, are leading the fight for passage, arguing that decades of erosion in education funding are the cause of the state’s dismal high school graduation rate, among the lowest in the nation. Opponents have raised about $8 million — four times as much as supporters — through contributions from large companies like Amazon, General Motors and the grocery chain Kroger/Fred Meyer.
Corporations are doing what they always do: pouring millions into the campaign, and extorting citizens by threatening to raise prices, cut jobs, or just leave the state.
CAN Corporation Raise Prices To Cover Taxes?
A short examination of just one of these arguments — can corporations really raise prices to “pass on taxes to customers?” — shows that the corporate arguments against taxation have little credibility.
● Companies try to price ‘optimally,” meaning they already charge as much as they can. If they could raise prices, they already would have.
● Taxes are determined long after a sale takes place and are not a cost to be added into the pricing of a product. There is no way to know what the taxes might be later.
● Companies have competitors. If “Company A” raised prices, competing “Company B” would get more business, which would mean that “Company A” loses sales, which would mean they have lower profits and therefore lower taxes, which would mean they would have to lower prices…
● Suppose a company could raise its prices regardless of competition. That would mean the profits would be even greater, which means the taxes on profits would be greater, which would mean they have to raise prices even more. But that would mean profits would be even greater, which means the taxes on profits would be greater, which would mean they have to raise prices even more. But that would mean profits would be even greater …
People in corporations know they can’t raise prices to “pass on taxes to customers,” yet they are making the argument anyway. Other corporate arguments against raising taxes have similarly low credibility.
If you live in Oregon, take a look at Measure 97. If you don’t live in Oregon, learn from Oregon’s amazing activists and organizers and organizations like the coalition behind Measure 97. You can how power in your state to take on corporate power and restore government of, by and FOR the people.
“Tax cuts skewed towards the wealthy elite starve our communities of much-needed resources while further tilting the scales towards large corporations and the rich.”
– Stephen Rouzer at Main Street Alliance
If you cut taxes for the rich and giant corporations, what happens to the rest of us? Tax cuts mean budget cuts, so what suffers is education, infrastructure and all kinds of things government does to make our lives better and our local businesses stronger.
Republicans argue that pushing wealth and income to the top few has a “trickle down” effect. They say wealthy people (like Paris Hilton) are “makers” who “create jobs” and therefore deserve to have heaps of money pushed their way for their benefit. They say that government spending on things that make the lives of We the People better really just makes us into “takers.”
But in reality, policies that push more and more of our country’s resources into the largest hands put our smaller hands at even more of a disadvantage. The giant corporations have huge advantages over small, local businesses just due to their size; huge tax breaks on top of their size-given advantages just make it that much harder for smaller businesses to compete. So the “WalMart business model” of undercutting and bankrupting a community’s small businesses and draining entire regions of wealth gains even more power. After decades of these “trickle down” policies, this is also known as “look around you.”
Trump’s Tax Plan Means Fewer Customers With Money To Spend At Local Businesses
The Main Street Alliance is a “is a national network of small business coalitions” that “works to provide small businesses a voice on the most pressing public policy issues across the nation.” (Donate here.)
A Main Street Alliance blog post by Stephen Rouzer, “Donald Trump’s Revised Tax Plan Won’t Work for Main Street,” begins,
The latest version of Donald Trump’s ever-changing tax plan is facing scrutiny from the Center on Budget and Policy Priorities and Main Street Alliance leaders. The plan, one that features across the board tax cuts, disproportionately benefits the highest-income earners, those grossing more than $1 million annually.
This description of Trump’s plans as a huge benefit to the wealthiest is based on a Center on Budget and Policy Priorities (CBPP) post explaining a Tax Policy Center (TPC) analysis of Donald Trump’s tax proposals. The CBPP post, “Revised Trump Tax Plan Heavily Tilted Toward Wealthiest, Tax Policy Center Analysis Shows” explains how the analysis shows that Trump’s tax cut raise the after-tax income of the already-wealthy by another 14% or more, while hardly benefiting the rest of us – or even cutting the take-home incomes of the poorest.
This would seriously affect small, local businesses. Rouzer explains how passing so much to the top few while starving the rest of us means local businesses have fewer customers with money to spend:
A 2015 report released by the Main Street Alliance, “Voices of Main Street,” surveyed over 1000 small business owners and found that 52 percent of respondents cited “more customers” as the most important key to increasing small business success. Doubling the number of respondents that said “lower taxes” and more than quadrupling the number that responded “fewer regulations.”
Tax cuts skewed towards the wealthy elite starve our communities of much-needed resources while further tilting the scales towards large corporations and the rich.
Rouzer concludes with some great comments from business owners:
“To level the playing field for Main Street businesses our tax code must no longer skew in favor of large corporations and their shareholders,” said Deborah Field, the owner of Paperjam Press in Portland, Oregon, and a former corporate tax accountant. “Without holding multinational corporations accountable to pay what they owe and first providing relief to low and middle-income earners we shouldn’t begin to consider tax cuts for the rich.”
“The vast majority of small business owners don’t support a tax system that augments their piece of the pie by cheating their fellow citizens out of theirs. When we contribute our fair share of taxes, those dollars get reinvested in our local communities,” said David Borris, the owner of Hel’s Kitchen Catering in Chicago and Main Street Alliance Executive Committee member. “Local communities that support tens of millions of small businesses nationally.”
Amanda Ballantyne, national director of the Main Street Alliance, says that “Mr. Trump’s tax breaks would deprive the government of badly needed funds for investments in infrastructure, transportation, education, and social services. The resulting budget cuts hinder the types of investments that drive local economies and put small businesses in a better position to succeed.”
The kind of tax policy that small businesses need is one that supports their customer base and their communities. “In that regard, Trump’s plan falls flat,” says Ballantyne.
Donald Trump wants to dramatically cut taxes for the already-wealthy and their giant corporations. This would starve local communities of resources like teachers and infrastructure, while stacking the deck further against smaller, local businesses.
“Multinational corporations’ use of tax havens allows them to avoid an estimated $100 billion in federal income taxes each year,” says a new report just released by Citizens for Tax Justice (CTJ), Institute on Taxation and Economic Policy (ITEP) and U.S. Public Interest Research Group Education Fund (U.S. PIRG).
That report, “Offshore Shell Games 2016,” explains how “U.S.-based multinational corporations are allowed to play by a different set of rules” when it comes to paying taxes.
Congress – for obviou$ rea$on$ – refuses to stop this “deferral” loophole. And then these same companies fund “think tanks” and other propaganda mills that tell us we have a huge budget “deficit” and “debt” problem and therefore need to cut spending on things that make people’s lives better.
From the report’s executive summary:
Most of America’s largest corporations maintain subsidiaries in offshore tax havens. At least 358 companies, nearly 72 percent of the Fortune 500, operate subsidiaries in tax haven jurisdictions as of the end of 2014.
-All told, these 358 companies maintain at least 7,622 tax haven subsidiaries.
-The 30 companies with the most money officially booked offshore for tax purposes collectively operate 1,225 tax haven subsidiaries.
Some of the key findings from the report:
● Fortune 500 companies now hold nearly $2.5 trillion in earnings offshore and we estimate that they are avoiding $718 billion in taxes on these earnings.
● More than 73 percent of Fortune 500 companies maintain at least one subsidiary in a tax haven.
● Apple has booked $215 billion offshore on which it owes $65.4 billion in taxes.
The solution is for Congress to end the “deferral” loophole and make these companies just pay the taxes they owe.
I listened to this on a walk, and it is a must, must, must listen podcast.
Robert Reich, speaking Tuesday at the Commonwealth Club in San Francisco: “The Oddest Presidential Election in Living Memory”
From the website:
Tue, Sep 27 2016 – 6:30pm
Robert Reich, Chancellor’s Professor of Public Policy, University of California, Berkeley; Former Secretary of Labor; Author, Saving Capitalism
Holly Kernan, Executive Editor for News, KQED—Moderator
In the midst of an unpredictable presidential election, get insight from a veteran political figure who knows Washington inside and out. Time magazine named Reich one of the 10 most effective cabinet secretaries of the 20th century. He is a founding editor of the American Prospect magazine and chairman of Common Cause. Come hear his provocative thoughts on the presidential election and the future of America.
The manager instructed her to push accounts but not to tell the customers about the downfalls and fees of new accounts. “Make them read the paperwork.” She replied, “But you know no one ever reads the paperwork.” His response: “Exactly.”
You might have heard that Wells Fargo Bank was busted by the Consumer Financial Protection Bureau for opening millions of fraudulent accounts – ruining customer credit scores and finances to rack up profits from big fees – and had to pay a $185 million fine.
You might have heard that the bank said management didn’t know about the 1.5 million to 2 million fraudulent accounts that were racking up big profits, gave the head of the division responsible for those accounts a $125 million bonus, blamed low-level employees and fired more than 5,000 of them. Now those former employees have the words “ethics” and “fraud” on their records.
BuzzFeed is running a very important investigative series called “Secrets of a Global Super Court.” It describes what they call “a parallel legal universe, open only to corporations and largely invisible to everyone else.”
Existing “trade” agreements like NAFTA allow corporations to sue governments for passing laws and regulations that limit their profits. They set up special “corporate courts” in which corporate attorneys decide the cases. These corporate “super courts” sit above governments and their own court systems, and countries and their citizens cannot even appeal the rulings.
Corporations are more and more in the habit of telling governments that they are the boss of them. If corporations get their way, “trade” agreements like the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) will formalize their dominance. But not quite yet.
The European Union (EU) just told Apple that it is the boss of them, and not the other way around. The EU has ruled that Apple’s tax-avoidance scheme with Ireland’s government is illegal, and Apple owes Ireland $14.5 billion — plus interest. The EU decided that Ireland’s tax deal with Apple, based on Apple demanding a tax break to “bring jobs” to Ireland instead of somewhere else, constitutes “state aid” to the company. The EU pointed out that other, smaller companies are hurt when giant corporations like Apple get special tax deals.
In other words, the EU has ruled that it is illegal for an EU government to give in to corporate extortion, because giving in and paying the extorting company a tax break ransom means the government is providing “state aid.”
In other other words, where last week Apple’s CEO told the US government that the giant corporations are the boss of government, this week the EU told Apple that, actually, government is still the boss of the giant corporations.
Are We the People the boss of giant multinational corporations, or are they the boss of us?
Imagine, if you will, going to the IRS and saying, “I don’t think the tax rate is fair so I’m not going to pay it.” Regular Americans can’t do that. But Apple just did.
Apple’s CEO Tim Cook was interviewed by The Washington Post early this month. He was asked about the vast sums of profits that Apple has shifted into overseas tax havens thanks to a loophole in US tax law that lets them “defer” paying taxes on those profits as long as the money technically stays outside the country. Cook said (emphasis added, for emphasis):
And when we bring it back, we will pay 35 percent federal tax and then a weighted average across the states that we’re in, which is about 5 percent, so think of it as 40 percent. We’ve said at 40 percent, we’re not going to bring it back until there’s a fair rate. There’s no debate about it.
What would happen to any regular American if they did what Cook did, and said they they aren’t going to pay taxes because they don’t think the tax rate is “fair”? (Hint: Jail. And maybe 2 or 3 years added to the sentence for the contempt of saying, “There’s no debate about it.”)