07 April 2011


YOU AND TAXES. Most folks were outraged (thought not particularly surprised) when it was revealed in the NYTimes that "General Electric, the world's largest corporation, had a very good year in 2010. The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States. It's American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion .... the company has been cutting the percentage of the American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than at most multinational companies.

"Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore .... While General Electric is one of the most skilled at reducing its tax burden, many other companies have become better at this as well. Although the top corporate tax rate in the United States is 35 percent, one of the highest in the world, companies have increasingly been using a maze of tax shelters, tax credits and subsidies to pay far less."

Lobbying. Offshore accounts. Tax shelters. It burns my grits when misinformed people whine about individuals on welfare, when the towering thundercloud casting that tiny shadow is that we live in a nation of corporate welfare. It is one of the most egregious failures of capitalism in its current mutation that if you have the financial means, you can hire accountants, lobbyists, and tax attorneys to shield you from paying your fair share of the burden of running a nation -- all the while raking in obscene profits to reward your CEOs (but not your struggling average workers). Am I alone is seeing both a financial and an ethical disconnect here?

It would be interesting to trace the evolution from the philosphy of the founders of this nation, who pledged "our lives, our fortunes, our sacred honor" to establish and defend the republic, to the philosophy of those in power today -- take the money and run. Let no one labor under the illusion that we live in a democracy. Our government resides on Wall Street, not in Washington. We go through the motions of holding elections, and sometimes we send a president or congressman to the capitol with high hopes of effecting change. As I noted to a friend recently, it's like tossing a pebble into a pond. Reform may produce a few spreading ripples, but the pond remains intact.

Incidentally, here is a satirical explanation of G.E.'s Aggressive Tax Strategy. I particularly like "brought a few hundred million good things to life, then claimed them as dependents".

So what to do? We can complain about the unfairness of it all, but where are the solutions? Over thirty years ago, Pulitzer Prize-winning investigative journalist Jack Anderson proposed a reform that is elegant in its simplicity. His suggestion -- that ALL individuals and corporations pay a flat 10 percent tax on their gross income. Period. No deductions, no exemptions, no tax shelters, no deferments, no exceptions for offshore accounts. If you made money, whether inside the U.S. or overseas, you would owe 10 percent of that income. The resulting income to the government would be a floodtide sufficient to finance the repair and modernization of our nation's infrastructure (roads, highways, high speed rail, air traffic control, clean power), as well as insure the finest education system in the world, establish quality universal health care, create jobs for all who are able to work, and remove the necessity for waging war in the far corners of the globe over natural resources.

If you earned $40,000 a year, your tax would be $4000 -- at first blush a staggering amount, until you consider that you would receive value for value in the form of affordable healthcare, education, and other services. If you as a corporation made $14 billion (and remember, that figure represents profits, not gross income), you would pay $1.4 billion. Can you imagine the galvanizing effect that would have on our economy? Everyone paying their fair share, and everyone reaping the benefits. Doubtless there would be details to be ironed out -- and perhaps the specific percentage would have to be revised. But it strikes me as a good starting point.

Reality check -- I don't live in la-la land. I realize that the status quo maintained by the super-wealthy and their armies of minions in Congress would fight such a change to the death. Even the mildest tax reforms are resisted tooth and nail. But guess what? When 1 percent of Americans control 40 percent of the nation's wealth, and the gap between the rich and the rest of us widens every year, there will come a breaking point. Even the sheep who elect the conservatives who perpetuate our economic shipwreck, once educated, are capable of growing fangs. One hopes sooner rather than later.

Speaking of taxes and national defense (when did we stop calling it what it is, the War Department?) -- check out this handy calculator from Rethink Afghanistan -- you simply input your income and your filing status from 2010, and up pops the amount you contributed to war. I doubt that the algorithm takes into account niceties like itemized deductions or those dreaded offshore accounts, but it is still an interesting approximation of your financial support of the wars in Iraq, Afghanistan, Libya, and a dozen other hot spots on the planet. I'm just sayin'.

FACEBOOK COPS. I got a kick out of the NYTimes article Police Lesson: Social Network Tools Have Two Edges. Facebook and Twitter may be ubiquitous, but they are far from anonymous. Increasingly, police departments across the country are having to establish rules of conduct for their officers who maintain a Facebook presence. Why? Because certain officers allow their egos or their sociopathic tendencies to compromise criminal investigations or criminal trials. I mean, common sense would tell me, if I were a police officer and posted a profile photo of myself in a uniform identifying my employer, not to list my occupation as "human waste disposal", or posting on my news feed that I'd watched the movie Training Day to "brush up on proper police procedure". Live and learn, eh?

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