A special pre-tax day letter to the American Tea Party
Dear Tea Partiers-
With April 15th around the corner, it’s once again that special time of year – a time to gather up the kids, give those shotguns a good oiling, apply a little magic marker touch up to last year’s ‘Obama is Hitler’ sign and head on down to a FOX sponsored Tea Party rally near you to play ’spit on the Congressman’ with friends and family.
As you make ready to once again lay into the president for attempting to turn the good old USA into a socialist style European dictatorship dedicated to overtaxing you – the hard working men and women of American -I thought I might bring a few recent developments to your attention to better get you in the spirit of things.
Last week, Fortune Magazine published an article providing us with some information on what America’s corporations paid in federal taxes last year.
Let’s begin with General Electric, that All-American company dedicated to bringing good things to your life. Last year, GE raked in $10.3 billion in pre-tax earnings. Not bad for a recession year and an accomplishment that should certainly put a few sawbucks into the national treasury, right?
When tax day rolls around next week, GE will pony up a grand total of …zero….nada… a very large goose egg. In fact, the company recorded a tax benefit of $1.1 billion – meaning we kind of owe them a bunch of money. S0, assuming you teabaggers haven’t been on a tax strike these past 365 days, you will be paying more taxes than the nation’s sixth largest corporation.
How did that no good commie who stole the White House out from under us let that one get by?
He didn’t. In fact, he’s proposed legislation to get some of that money back home for the good people who made those big company profits possible. That would be you.
Before you get too upset over the confusing concept that the president actually wants to help you, keep in mind that, according to your Republican friends in Congress, requiring big corporations to pay their fair share of taxes is actually bad for America. You see, if we make them pay taxes, they are going to pass those costs on to you in the guise of higher prices when you buy their products. Worse still, if they have to pay taxes, the big corporations will have less money available to give jobs to you and I – and we all know how these companies have been handing out jobs like candy this past year.
It’s all a bit complicated, but the long and the short of how this works involves the time honored, American tradition of corporations allocating profits and losses in such a way that all the money is somehow earned by overseas companies owned by the large corporations while all the losses are incurred by their subsidiaries here in the United States. Why?
Because our corporate tax rate is much higher than the rates of those foreign countries where the large companies park their big earnings.
It only makes sense that multinationals “put costs in high-tax countries and profits in low-tax countries,” says Scott Hodge, president of the Tax Foundation. Those low-tax countries are almost anywhere but the U.S. “When you add in state taxes, the U.S. has the highest tax burden among industrialized countries,” says Hodge. In contrast, China’s rate is just 25%; Ireland’s is 12.5%.
Via Forbes Magazine
Remember, we are not talking about those excessively high personal income tax rates you are out there screaming about – you know, the ones hovering around the lowest levels since the advent of the federal income tax – what we are talking about are corporate tax rates.
While General Electric seems to have worked out a pretty sweet deal for themselves, they are not alone . Companies like Microsoft avoid US taxes by putting ownership of its software rights into overseas corporations and then license those rights back to their companies in the US in order to sell their products back here at home. In return, the U.S. company pays their foreign sister companies a handsome royalty payment. That leaves the profits in the overseas companies that get taxed at much lower rates while the costs/losses stay here in the U.S.
Rich oil companies, like Exxon, are not quite so lucky as many of the oil rich countries where they do business have even higher tax rates that the United States. As a result, Big Oil is required to do a little extra work in order to avoid paying federal taxes in America. They do it by structuring perfectly legal off shore corporations in places like the Bahamas so that they can shelter all that money flowing into their bank accounts from the clutches of the United States taxing authorities.
The good news is that it works out just fine for Exxon. Their financial statements reveal that they too will not owe any income taxes to Uncle Sam – although a company spokesman would beg to differ.
A company spokesman insists that once its final tax bill is figured, Exxon will owe a “substantial 2009 tax liability.” How substantial? “That’s not something we’re required to disclose, nor do we.”
If this isn’t free market capitalism at its finest, well I just don’t know what is.
So, it is little wonder that when President Obama tries to keep more corporate tax money on our shores to lessen the burden on the rest of us, he is accused by the very people you follow as attempting to redistribute the wealth – a truly un-American concept. So far, you’re buying it -which is precisely why we should not expect our largest corporations to pick up their share of our tax bill at any time in the near future.
Come this tax day, as you gather to honor the likes of Sarah Palin, Michele Bachmann and your other leaders who claim to be fighting for the American Way, try to keep in mind that these are the very people who fight to support a corporate status quo that leaves the tax responsibility to you rather than take on their fair share of the burden. Keep in mind that while Michele Bachmann leads you into the new American revolution, inciting you to resist and demean a president who dared to attempt a stimulus program to revive the economy and create jobs, the people back home in her Minnesota congressional district are suffering the highest unemployment rate in the state. Keep in mind that while Sarah Palin urges you to paint bulls-eyes over the names of those actually attempting to help the middle class, Palin’s big oil agenda is keeping billions in the pockets of the oil industry, billions that should be in the national tax coffers.
Try to grasp that the GOP congressional leaders to whom you pledge your support have long done everything in their power to protect the corporate status quo that keeps them in campaign money as you are left to pay the big bills.
If you know all of this come tax day and you’re still good with the leaders who are using you to regain control of government for the benefit of their corporate backers, then enjoy your day. I know the big corporations will be hoisting a few at your expense.