ataxingmatter

Friday Animations: Jon Stewart on GE's $14.2 billion profits and zero federal income taxes

The New York Times ran a lengthy expose of GE's offshoring of profits and other tax avoidance techniques.  David Kocienieski, GE's Strategies Let It Avoid Taxes Altogether, NY Times, Mar. 24, 2011.  Don't miss the great  "interactive media" link:  General Electric: Where Taxes are a Source of Profits.

 US companies are supposed to pay a tax of 35% on their worldwide profits.  But there are lots of loopholes (some intended, some not) and many of those have been expanded over the last 20 years, as Congress races to satisfy the corporate lobbyists.  After the 2001 tax cut bill, Congress basically promised the corporate lobbyists they'd get their wish list.  And they did.  The 2003 and 2004 bills weakened the way the foreign tax credit works, so that multinationals can use high taxes paid in one country to offset low taxes paid in another and avoid paying US taxes even on that low-taxed income.  It gave them the 15% rate on dividends, so that the wealthy elite who own most of the capital assets now get preferential rates on their regular streams of income (15% on dividends, 0% on muni-bond interest) as well as low 15% rate on their sales of stock and other securities.  There were lots of goodies from the corporate lobbyists' wish lists that got passed--expensing, shorter lives for depreciation, that special rate reduction for "manufacturers" (that ends up covering the oil and gas industry) that was passed when the WTO made us stop a discriminatory tax provision that favored US industry, the R&D credit, the "active financing" exception to subpart F, and on and on. 

Companies like GE, that hire lots of well-trained tax attorneys and make cutting taxes a big piece of how their businesses work, have made hay out of the laxer code.  They talk a lot about how that 35% statutory rate is just killing them.  But meantime they make huge profits and pay zero taxes.  That's just one facet of corporatism that is damaging ordinary Americans today.

Read the New York Times story first.  But then watch this March 28, 2011 Jon Stewart take on the GE tax avoidance success story.  

Friday Animations: Why is health care reform so difficult

If you think about it, health care surely is one of the basic human needs that we should try to ensure is met for every person, if at all possible.  That's the idea behind universal health care--that is, that the US should have a system that covers everyone, not just the wealthy.  That no one should have to give up home or job to have health care.  That no one should die from an easily treatable illness simply because they didn't have enough money to pay a doctor.  That our health system should work for the people, and not for corporate interests.  That health insurers, if they are to be involved, should only be making a reasonable profit out of guaranteeing that the services we want are available--they should not be able to deny care, they should not be able to decide what kind of care is available, they should not be able to rip people off for exorbitant profits.  Because they are providing a service that meets basic human needs, they are a quasi public utility and must be regulated as such, if they are to exist at all. 

Other countries seem to have managed this much better than we have.  Canada's health care system costs about half what ours does yet provides better service.  Same in Europe.  We have missed the boat.

The health care reform act is just a first step in the right direction.  It involved way too much payoff for the health insurers, and not enough reform.  But it is a start.  The new rules about pre-existing conditions are very important.  The mandatory coverage is very important.  Eventually maybe we'll finally be able to enact a public option.  And then, who knows, maybe we'll finally enact a single-payer system that will provide to Americans the quality of health care, at the lower expense, that Europeans have enjoyed for decades.

So here's today's animation feature--a reminder that health care reform made some progress, but that we have a long way to go.  What we don't need, however, is gutting of the little progress we did make.

 

Friday Animations--being a good mother

These days the tea partiers and libertarians have tended to mock those who think that we should all tax ourselves to take care of those who are less fortunate, and that the wealthiest amongst us--corporate managers, private equity managers, and shareholders--should pay more in taxes.  Libertarians claim that everything they have "earned" is theirs, and that the government is stealing from them.  They forget, or fail to notice, that nothing they have earned would have been possible without roads, contracts, internet, schools, disease control, decent food, clean air, clean water, clean soil, etc.  Those are the things we want government to do for us--protect and preserve the environment that nurtures us, protect and preserve the infrastructure that gets us to and from our work and homes and lets us socialize with our friends and co-workers, protect and preserve our sources of food, clothing and housing.  Help those of us who are most vulnerable whether from inherited traits or catastrophic illness or unfortunate accident or lack of work or old age.   Protect and preserve.

So this struck me as a good video feature for today--a pup whose young ones had grown up and been adopted, willing to mother some motherless kittens who needed milk and warmth and pulling out of danger.  Mothering. Maybe that isn't far from what is at the heart of good government, community spirit, and neighborliness --caring and showing a willingness to help others, to protect them, and preserve for them a home.

 

 

New Feature: Friday Animations--Wall Street Gorges

IN the interest of proving that I am not a troglodyte (Is that the way to spell it?), I hereby declare Fridays to be "animation days".  We'll see what entertaining, educational, or just plain worth watching videos we can find with a tax/economic theme that would be interesting to readers of A Taxing Matter while, hopefully, animating the concerns about democratic egalitarianism that this blog expresses.

Today being the first entry in the Animation Days feature, it seems worthwhile to kick off with something on Wall Street, fat bonuses--projected to amount to about $144 BILLION for this year, and the fate of ordinary Americans whose houses are being foreclosed on with robo-signers.  All tied neatly in the following package from Next Media Animation (Taiwanese, with English substitles, which is an interesting comment in itself):

http://www.nma.tv/2010/11/05/wall-street-gorges-on-record-bonuses/

and your bonus, to help lighten your election blues (for the vast majority of Democrats/liberals and other lefties) or throw a few serious moments into your election celebrations (for the teapartiers and GOP victors in the House and many state races):

    

http://www.youtube.com/watch?v=2TEia3QZ1ec&feature=player_embedded