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Apr. 7 2010 - 6:47 pm | 1,309 views | 7 recommendations | 16 comments

A special pre-tax day letter to the American Tea Party

Tax protesters participating in a 'Tea Party' ...

Image by AFP/Getty Images via Daylife

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?

Wrong.

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.”
Via Forbes

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.


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11 T/S Member Comments Called Out, 16 Total Comments
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  1. collapse expand

    Sometimes we look like the dumbest people on the planet, just speechless.

  2. collapse expand

    So let me get this straight;
    Large Corporations pay little or no taxes and I heard yesterday that ~40% of workers make so little they will pay no income taxes (only payroll taxes), Obama is trying to make taxes from Corporations and Wealthy Americans more fair to the middle class, and the TeaBaggers and Republicans are fighting everything that he tries to do.

    How is it that this pair of Screeching Wing Nuts are fighting for “Real America”?

  3. collapse expand

    May non-corporate citizens do that, too? If not, maybe the Roberts court would consider allowing citizens corporate rights?

  4. collapse expand

    this is soooooo going on my facebook page!

  5. collapse expand

    A short refresher course on economics.

    Politicians like the corporate tax because it appears to be on the corporations. But the economic evidence shows otherwise.

    Corporation taxes are passed on to others such as emplyees through lower wages and customers through higher purchase costs.

    Taxes aren’t tithing. Taxes are statutory. Everyone has a legal right to arrange their financial affairs to minimize taxes. A fair share has no legal basis.

    And remember, paper money has a spotty history.

  6. collapse expand

    “It only makes sense that multinationals “put costs in high-tax countries and profits in low-tax countries.” I wonder how much of that is creative accounting vs. actual capital equipment and labor in those foreign markets? I really believe that if U.S. corporations aren’t taxed at a flat rate regardless of where their operations are located, the government should revoke their corporation status. Let’s see: they don’t pay taxes,they outsource their labor to cheaper markets, and their executives live the good life in the U.S. of A. Scandalous.

  7. collapse expand

    “… the government should revoke their corporation status.”

    The government is basically a general corporate subsidiary. The fox guarding the henhouse. Not only does the government look the other way–*see recent derivative scam–but diverts tax revenues to subsidize the corporate bottom line. That is the process that pushed America to the top and kept it there long enough for the top 2% to reap the benefits. But the inevitable outcome is upon us ie: crumbling infrastructure, high unemployment, huge deficits, failing state economies, etc. The Tea Party is just one last joke, a collection of ill-informed clowns serving as a distraction from reality.

  8. collapse expand

    Rick, I thought my point was obvious.

    You unreasonably disparaged Tea Party members and GE and other corporations for their concerns or conduct,or both, they have legal rights to perform.

    Citizens pay almost all of the taxes governments levy even if they don’t know it. The Tea Party knows it though.

    We have a growing debt that must be addressed. Tea Party followers know this and know it will mean additional taxes. If the government doesn’t timely and effectively address the debt, the markets will force it which may have many unintended consquences.

    Government doesn’t seem to be concerned by the growing debt. This should concern all citizens not just the Tea Party.

    • collapse expand

      No, I disparage Tea party members for not understanding that they are being completely had by their leaders who are using them to continue the status quo that is, ultimately, hurting the Tea Party members. While I never once suggest that anyone is doing anything illegal, are you suggesting that simply because it is legal that (a) it is right or (b) it should continue to be legal despite the fact that it is seriously harming the middle class?
      There is little need nor upside to arguing the logic of law with a lawyer like me. However, it is fairly basic to understand that because something is made legal, it does not make it right. As I recall, you were a fairly ardent opponent of the health care reform legislation. It is now the law. Do you like it any better because it is now law? Do you feel that you should no longer work to change it if you think it is wrong?
      If you continue to disparage and seek change in health care legislation that you disagree with, will you be acting unreasonably as you accuse me of doing in your comment? After all, it is the law now.
      I’m sorry, but your point just don’t register beyond the obvious. I think if you polled the overwhelming majority of Tea Party followers, they would not agree with what you appear to be suggesting – more taxes will be necessary to deal with the federal debt and they are prepared to accept this. While I agree that higher taxes will ultimately be required, I don’t think I’m on the same page of the those who follow the Tea Party.

      In response to another comment. See in context »
  9. collapse expand

    Palin and Bachman’s only real value would be in a lesbian porn flick.

  10. collapse expand

    It’s only fair that we make the Tea Baggers happy, so I propose this idea:
    Tea Baggers should pay no taxes, but they can can no longer enjoy the tax-payers supported benefits: roads (no more driving beyond the drive ways), public schools, fire departments, police, trash pickup, water & sewage, libraries, social security, medicare, air traffic control (no more flying), public parks, US Mail at the low postage rate tax-payers pay, child services…..the list is endless.

  11. collapse expand

    I wonder how many Tea Partiers look forward to filing their income tax because they know they will get a nice little check from Uncle Sam? I know when our kids were young (and living at home) I filed taxes as early as possible so that we had a 1 or 2k check to spend on something we wouldn’t have been able to afford on our weekly wages. dmollaun has an excellent point so let’s put both of these concepts together and tell them that if they really want to make a difference they should be willing to donate the check they are expecting (or have already gotten) to the gov’t to show that they are serious about doing whatever is necessary to lower the national debt.

  12. collapse expand

    Sort of on topic/an aside perhaps: Been listening to Bob Dylan lately. All this Tea Party business reminds me of his lyrics to “Only a Pawn in Their Game.” Remember it?
    http://www.youtube.com/watch?v=oUpfMFOoYpA&feature=relatedr r

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    About Me

    I am an attorney in Southern California, and a frequent writer, speaker and consultant on health care policy and politics. To that end, I am active member of the Association of Health Care Journalists. Based in beautiful Santa Monica, California, I'm very pleased to have the opportunity to be a contributing editor to True/Slant. I've recently finished a book designed to make the health care debate understandable to the average reader, and expect it to be out in the next five months or earlier. In my 'spare time', I continue to write for television and, occasionally, for comic books.

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