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Big Corporations Lobbying For Big Tax Breaks

As Congress tightens the national budget belt, big corporations are getting monster tax breaks, with the help of high paid lobbyists.

In this Jan. 26, 2006, file photo pigeons fly over the intersection of 17th and K streets in northwest Washington Thursday, Jan. 26, 2006. K Street has long been invoked as shorthand for moneyed lobbyists who ply influence in the city. (AP)

In this Jan. 26, 2006, file photo pigeons fly over the intersection of 17th and K streets in northwest Washington Thursday, Jan. 26, 2006. K Street has long been invoked as shorthand for moneyed lobbyists who ply influence in the city. (AP)

Tough times for the US federal budget.  Everybody knows that.  We’re “sequestering” spending right and left and talking about – talking about -raising taxes.

But for an amazingly big world of American businesses, all that is somebody else’s problem.  They’ve got special tax breaks – huge ones – written into law.  And as long as they keep feeding and stroking the right politicians, those monster tax breaks just keep coming.

Each has its rationale, or at least its backers.  But they add up to a big question.

This hour, On Point:  monster corporate tax breaks, and is this any way to run a country?

-Tom Ashbrook

Guests

Christopher Rowland, Washington bureau chief for the Boston Globe. Author of the article, “Tax Lobbyists Help Businesses Reap Windfalls.” (@globerowland)

David Cay Johnston, Pulitzer Prize-winning investigative reporter, columnist at “taxanalysts.com.” Author of “The Fine Print: How Big Companies Use ‘Plain English’ to Rob You Blind.”(@DavidCayJ)

Closing Segment on Cyprus

Peter Spiegel, Brussels bureau chief for the Financial Times. (@spiegelpeter)

From Tom’s Reading List

The Boston Globe “Lobbying for special tax treatment produced a spectacular return for Whirlpool Corp., courtesy of Congress and those who pay the bills, the American taxpayers. By investing just $1.8 million over two years in payments for Washington lobbyists, Whirlpool secured the renewal of lucrative energy tax credits for making high-efficiency appliances that it estimates will be worth a combined $120 million for 2012 and 2013. Such breaks have helped the company keep its total tax expenses below zero in recent years.”

The New York Times “At the root of the bitter semantic back-and-forth is a simple truth: every tax expenditure — and there are scores of them, used to encourage employers to provide their workers with health care, to make houses more energy-efficient, to aid timber cutters and much more — benefits a certain group of taxpayers or a specific industry. And nobody wants to give up anything.”

The Huffington Post “It was 2004 and Congress was considering a law that would provide substantial tax breaks to nearly any company engaged in manufacturing. Though this term conjured images of textile factories and steel mills, Starbucks argued that the definition of manufacturing should — for purposes of calculating its tax bill — be stretched to include the roasting of coffee beans.”

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  • Fiscally_Responsible

    Tax loopholes for both corporations and individuals should be ended.  A few examples include lower rates for non-sweat-of-your-brow income like Mitt Romney has, offshore tax havens including Delaware where corporations move their income to avoid paying any U.S. income tax, and many more.  But tax breaks that liberals may like such as subsidies for putting solar panels on your roof, and mortgage interest deductibility etc. should also be eliminated.  If we are going to end tax breaks and simplify the code, it needs to be done across the board as serving some small group’s interest or some social goal is how each of these provisions get codified in the first place.

    Unfortunately, many of these “lobbyists” and corporate executives interacting with lobbyists are ex-congressmen, ex-senators, and ex-federal officials such as Tom Dashle, Robert Rubin, and many others from both political parties.  So don’t hold your breath expecting anything to be done to even the playing field for the little guy.  The revolving door and post-government service income gained from taking advantage of contacts still serving in government is why our system is so rotten.  Unfortunately, the greed is entrenched and will prevent anything but meaningless cosmetic changes to be made to our system.

    • http://www.facebook.com/profile.php?id=100003854179878 Orange Sunshine

      I can hardly see where you can compare individual “loopholes” with the ones that corporations get.

      At least a tax break for solar can help create a local job installing, selling, maintaining, etc., as well as lighten the load on the power grid.  What do we get as a country from the breaks the big corps get? We get our jobs devalued and our tax coffers lower than they should be.

      • JobExperience

         Big oil wants an earned income tax credit, just like the mom driving her 1993 Ford Falcon to work 23 hours a week at Costco. And by the way, Costco wants to lower the minimum wage while you’re at it. Reality will hit us in about 6 months like an asteroid: Austerity for workers is welfare for the corporate rich. We will then begin selling our offspring to Rumplestiltskin to pay corporate levies directly without the IRS middleman.

        • Doubting_Thomas12

          Austerity for workers actually becomes austerity for the wealthy who rely on said workers to buy goods. Walmart realized this, but don’t seem to get that paying their workers almost enough to buy their products doesn’t count…

      • Fiscally_Responsible

        My point is that everyone can justify the tax breaks that benefit them.  A prime example is the corn lobby’s subsidy for ethanol in gasoline.  It has driven up the demand and therefore the price of corn and food derived from corn (including meat prices).  The energy required to make ethanol from corn (as opposed to sugar cane as they do in Brazil) is about the same as the energy that is gotten out of the ethanol, meaning little net gain. It started out as a logical, energy-saving social policy that is little more than another subsidy to large industrial farmers that don’t need another subsidy.  If we had the political will and sense of fairness to eliminate all of these very targeted incentives and instead came up with a simple, progressive tax rate structure (not a flat tax), those in the bottom 60% would benefit the most at the expense of the upper 40% (or whatever the percentages are).  Unfortunately, the upper 40% control all of the levers, which is why it doesn’t happen.

        • JobExperience

           The top tenth of 1% control the 40% you mention. Maybe that explains all these zombie films. I think a few vampires own all the zombies. That’s probably why dead flesh in the American diet dwarfs our appetite for fresh fruits and vegetables. Disease as archetype is more profitable than health for the vampires.

      • MrNutso

        Grants or rebates are better than tax breaks.  Once written into the code, breaks are hard to eliminate, even when classified as temporary.

  • Shag_Wevera

    You need a tax code that accepts the fact that most individuals and businesses are greedy and immoral.  All will use every loophole and advantage to pay as little as possible.  We need a tax code that exists in the full light of day.

    As far as corporate taxes…  You can’t win.  They’ll leverage state against state, and American workers against the 3rd world.  They have no national loyalty, and many are essentially stateless.

    • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

      When it comes to the tax code, I suggest individuals and businesses aren’t “immoral”, but rather “amoral”. (The rest of your post is spot on.)

      To me it’s a big change in framing. These companies aren’t twirling their Snidely Whiplash mustaches and consciously saying “Let’s tie Nell to the railroad trakcs.”

      They’re simply looking at the spreadsheet and realizing that three million in lobbying is an investment.

      • keltcrusader

        Love the Dudley DoRight reference!

      • geraldfnord

        Over a century ago, in a discussion of John D. Rockefeller, H.G. Wells said of laissez-faire capitalism, and using different words, ‘Don’ t hate the player, hate the game, ‘…but on the other hand, some players seem to play the game such that its worse features are more in play than they must, and with particular gusto, leading me to conclude that sometimes one should have room in one’ s reasonable, considered, hatred for both.

  • Yar

    The old saying we have the best Government money can buy is more true today than ever.  Crony capitalism is alive and killing its host.  That’s us by the way, for example agribusiness has inserted riders into the continuing appropriations bill that would allow farmers to plant GM crops even during legal appeals of the USDA’s approval process, and even if a federal court orders that the crops not be planted. No legislator claims the inserted language of the biotech rider. The same is true for the GIPSA rider.  The GIPSA rule, which provides basic contract fairness protections to livestock growers, went into effect in 2012, after decades of work and effort by RAFI, the Campaign for Contract Agriculture Reform, farmers and numerous advocates. Unfortunately, corporate groups responded with well-funded congressional lobbying efforts to repeal the rule. http://rafiusa.org/takeaction/urgent-action-alert/

    Why not use statistical analysis to indicate which legislator is bought and paid for by lobby money? (They all are in my opinion!) The only way to change this is to pass laws that prevent our law makers from taking campaign contributions while in office. I would add that they should not be allowed to trade in the financial markets while office as well.  

    Capitalism is the dominate religion in Washington, I advocate for separation of Church and State.

  • LinRP

    They need to start being called tax ENTITLEMENTS. We need to beam the spotlight now on where the real big-time moochers are.

    • Gordon Green

      If people on the right are going to start calling those in poverty “takers” and “moochers”, it is not surprising if those on the left to start referring to wealthy capitalists as “leeches” and “parasites,” which is no less appropriate.  I hope we can return to some kind of respectful and inclusive public discourse free from these kinds of terms; it will help us avoid having to re-learn the lessons of 20th century.

      • JobExperience

         It’s ironic that those who hate people in poverty the most are the ones who put them there.

      • LinRP

        Leeches, parasites? Damn straight.

  • albert Sordi

    This is why voting is useless in the US. 

    And these thieves and their spineless politicos wage war and kill millions of people around the world to supposedly bring them this brand of democracy.  What a cruel joke.

    • JobExperience

      Voting would not be useless if  the candidates were not commercial brands like Tide and Coke, selected and designed by ad agencies, chosen on a subjective basis. “American politics cannot change to a democracy by the shortening of the big business shadow over it. That shadow must be totally eliminated.” John Dewey (educator, in the 1920s))

  • MrStang

    ” Some contemporary economists do not
    consider supply-side economics a
    tenable economic theory, with Alan
    Blinder calling it an “ill-fated” and
    perhaps “silly” school on the pages of a
    2006 textbook. [23] Greg Mankiw, former
    chairman of President George W. Bush’s
    Council of Economic Advisors , offered
    similarly sharp criticism of the school in
    the early editions of his introductory
    economics textbook. [24] In a 1992 article
    for the Harvard International Review ,
    James Tobin wrote, “[The] idea that tax
    cuts would actually increase revenues
    turned out to deserve the ridicule…” [25]”
    en.m.wikipedia.org/wiki/Supply-side_economics

    • JobExperience

      Supply side is pure sadism.
      Keynesian is also kaput.
      With the typical Chinese urban worker now earning 35K per year, and eclipsing the shrinking American workforce in spending power Corporate dons are assured they can suck the USA dry to the last drop without consequences.

      Only local enterprise, self-sufficient to this continent, often worker owned and run; and massive Protectionism can save us now… and we’re way behind, duped by brainwashing, and way behind. But I say let big corporations flee… good riddance. They want our tax money and their gougeings too. Goodby you Nephillim.
      Empire has fallen and our military are now corporate mercenaries.

  • MrStang

    “… supply-side economics was merely a
    cover for the trickle-down approach to
    economic policy—what an older and less
    elegant generation called the horse-and-
    sparrow theory: If you feed the horse
    enough oats, some will pass through to
    the road for the sparrows.”
    John Kenneth Galbraith quoted in a pretty funmy graphic retelling trickle-down’s history:
    http://www.addictinginfo.org/wp-content/uploads/2012/11/horseandsparrowdotcom.jpg

  • TrueAdventure

    Tax needs to be simplified. 
    A certain percent. 
    No exceptions. 
    No breaks.

    • JobExperience

      A corporation is a private tyranny, legally secret in its dealings, an immortal being with unrestricted mobility possessing total impunity. More and more governments, dominated by such an example, begin  to mimic it. Taxation can never be fair without full public disclosure of all government workings, including security and the military. Those who disproportionately benefit from the system should pay the freight disproportionately, and always be tried when they commit crimes. Failure to do this results in  Totalitarianism. Business is a dangerous model for government or society.

      • TELew

         You can call a corporation a private tyranny, but it is a person, and it has feelings.  You might make it cry, you big meany!  (all written fascetiously; smiley face)

        • JobExperience

          I wish it had balls so we could kick them.
          A kickball economy… that’s an inspiration.
          Romney is always surrounded by athletic supporters, just in case. And the Big O is probably a Eunich.

  • nj_v2

    Brace for regressive, baseless, conservo-clown, corporo-apologist arguments from the usual suspects.

    Blahblahblahblahbu-bu-bu-bu-bu-…the unions…blahblahblah…

    Blahblahblahblah…quashing free enterprise…blahblahblah…

    Blahblahblahblad…businesses taxed too much in the U.S.…blahblahblah…

    Blahblahblahblah…higher taxes will mean fewer jobs…blahblahblah…

    Blahblahblahblah…taxes just get passed through to the consumer…blahblahblahblah…

    We could have a drinking game every time one of these is mentioned, but no one would be able get out of their chair by the end of the program.

    • JobExperience

      I would warn you about the blah-blahing of the  pro-business liberals too.
      Even with reforms in campaign finance,
      with universal healthcare,
      with affordable education for all,
      and with environmental protections we might still not achieve democracy, because Capitalism as we know it is unsustainable. It is unsustainable because it can never be policed, never be satiated. It swallows itself taking everything with it.

      • nj_v2

        No disagreement from me there.

  • JobExperience

    Austerity= Corporate Assteroid Impact
    Why didn’t we see it coming?
    We could have deflected it 20 years ago.
    But Daddy Bush and Slick Bill said “There’s gold in them there comets!”

  • JobExperience

    Paid fascists inject disproven arguments to forestall discussion. They don’t even believe what they say.
    People end up wasting time replying to nonsense. I’ve gotten to the point where I’m “partisan blind”, and now I pretend those idiots are invisible.

  • William

    Everyone, company, organization, church etc…should pay something in taxes. Yes, even PBS/NPR should pay taxes.

    • JobExperience

       Fetuses should pay as soon as a heartbeat is detected.

    • Shag_Wevera

      Ah yes…  “skin in the game”.  Good luck squeezing water from pebbles.

    • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

      Nice false equivalence there.

      And while we’re at it, do you also include in this idea no longer hobbling the IRS so it can do the job of collecting tax receipts?

    • hennorama

      William – you typed “Everyone, company, organization, church etc…should pay something in taxes.”  This is the usual “everyone should have skin in the game” argument.  Let’s examine your idea, OK?

      Let us assume that we all agree that “Everyone should pay something” when discussing Federal Income Tax (FIT), which is the view that you express.  Fine.  Everyone has to pay at least one dollar ($1.00) of FIT, annually.

      First, we need to define “everyone.”  Every person living in the US?  Every citizen?  Everyone over age 13, 18, 21?  Everyone under age 100?  Everyone who votes?  Everyone who drives?  Everyone who has income of any kind?

      OK, let’s assume this gets resolved somehow and we’ve defined “everyone.”

      Now let’s think about the incomes of “everyone.”

      What happens if I have no income?  I got injured while playing soccer, and can’t work the whole year.  I have no health insurance, no disability insurance, and no savings.  I lose my house and my car and move into a homeless shelter,   Do I still have to pay the $1?

      What happens if I have income of $1.00, or $10, or $100 or $1000?  Do I still have to pay the $1?  Does the answer change if I have dependents?

      What if I run a business, the economy goes into a Great Recession, and I lose all my customers and have a loss?  Do I still have to pay the $1?

      What if I have no income, sell $10 million of stock at a loss?  I have $10 million in the bank, but I lost money on the stock.  Do I still have to pay the $1?

      Do you see how things get a bit silly when you say “Everyone should pay something”?

  • Markus6

    This topic is ripe for demagoguery. Corporations are bad. Business leaders are fat cats. All politicians are on the take. Well, maybe the last one is close to always true. 

    From what I’ve seen, some tax breaks are good in that they help create jobs. A lot are just gifts from lobbying efforts. If the issue to be discussed is which are good and which are not, it’s probably too complex for this show. However, if the issue is the influence of lobbying on Congress, it’s more black and white. I heard on some show (might have been Planet Money) that a congressperson spends on average 30% of his or her time collecting money. Most of it comes from lobbyists. At the risk of being simplistic, this comes close to being the source of everything bad that occurs in government. But since we keep voting the same people back in, I don’t see a solution … ever.

    • JobExperience

       Corporate welfare is a Rube Goldberg machine, too complex to analyze for reasons of obfuscation. Dissolving all corporate charters would be good for the 99%. Talk about “personal responsibility”, you’d get it in tankers without limited liability and corporate secrecy.

      Also, I propose a maximum wage (total income) below half a million yearly. I know of no one in any endeavor worth anything near that. Minimum wage should now be $16/hr for teens just starting out, to teach the work ethic instead of celebrity worship.

    • Bluejay2fly

      Probably the last intelligent thing that is going to be said on this topic. Good Job.

      • JobExperience

        Thanks, and thanks for calling me Good Job.

    • jefe68

      Well there is a counter argument to your comment that tax breaks create jobs. By the way if your such a huge believer in the capitalist system I would have thought that demand was the thing that created jobs not giving tax breaks.

      http://www.forbes.com/sites/billharris/2012/11/05/tax-cuts-dont-create-jobs/ 

      http://www.nytimes.com/2012/12/02/us/how-local-taxpayers-bankroll-corporations.html?pagewanted=all&_r=0

      http://www.salon.com/2012/12/12/the_ceo_who_says_tax_cuts_dont_create_jobs/

      • Doubting_Thomas12

        The captains of industry realized that, a century ago. The robber barons did not, attempting to squeeze every last egg out of that goose.

    • Steve_the_Repoman

      A delicate balancing act by the US Government/Estates General.

      Will the spring of 2013 be similar to the pagaents of 1787?

    • Doubting_Thomas12

      Markus,

      We have just under an hour to hear why there might be two sides to this story. Am I correct in deducing your position as “they’re always good no matter what” ?

      Tax breaks encourage certain kinds of activity. When they reduce effective tax rates to 0% for companies like GE, then they encourage the kinds of decisions that led to GE capital being bailed out to the tune of $140B+.

      We should not be allowing companies to profit here without contributing anything to the local infrastructure we provide. Bailout recipients lost any say they may have initially had when it comes to rules regarding their own illicit behaviour. Therefore…

  • Gregg Smith

    I’m all for flattening out the tax code but why do I get the feeling “big corporations” doesn’t mean all big corporations just the ones Democrats don’t like. Do we treat big oil the same as big solar? I remember the libs who want to cut military spending being all for the massive increase in military spending resulting from a switch to biofuel. There also should be a distinction made between tax breaks where no tax payer money is exchanged and subsidies where tax money is squandered.

    • jefe68

      Man, are you drinking something? Because your view points are getting stranger by the day.

      Here’s a little news flash: Both parties are in on this.

      • nj_v2

        Newt, Palin, Flush, Allen West are among his intellectual (using the word loosely) heroes. What do you expect?

        • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

          Has Newt’s Foundation handed out “Best Business Awards” to any strip clubs lately?

      • JobExperience

        The flat tax is about as desirable as a flat tire for wage earners, but Luntz-heads think people don’t know that. Let Bill Gates pay 99%, because he owes it.

        • Gregg Smith

          I said “flatten out” as in closing loopholes.

      • Gregg Smith

        My only reference to party was to the Democrats on this show and blog who use the term “big corporations” as a catch all.

  • DrewInGeorgia

    The only way to stop the abuse is to remove the incentive.

    • JobExperience

       But if we pull down the idols we’ll have to copy Socrates and ask questions. That sounds hard, too hard for zombies.

  • Michiganjf

    Republicans launched the K Street Project, shortly after winning political majorities in BOTH Houses in 1994…

    http://en.wikipedia.org/wiki/K_Street_Project

     Under Republican control, Washington saw the number of lobbyists EXPLODE from under 1000 to a high of over 15,000 by the time Dems re-took control in 2007…

    http://www.opensecrets.org/lobby/

      The number of lobbyists on Capitol Hill has decreased every year since Dems re-gained some level of control in Washington, but Republicans left America with a lasting legacy of corporate influence which will be hard to break, and the number of lobbyists still remains high, at around 12,000 (of course, not all are corporate lobbyists, though the vast majority are).

    • JobExperience

      And the crippling legacy of corporate and security state judges also haunts us.

  • Charles Vigneron

    “… For instance, at home when people go to lawmakers and induce them with trips and money and so on to pass legislation, it’s called corruption. But in the U.S. it’s actually a profession called lobbying.”
    Ngozi Okonjo-Iweala
    Foreign Policy, Mar/Apr 2013, pg. 23.

    I read this yesterday and couldn’t have said it better myself.

  • JobExperience

    Maybe  states could tax savings and checking accounts 10% and use the revenue to attract corporate headquarters. It wouldn’t create many jobs but the lobbying perks would sweeten up. Seems to be popular among Cypriot Oligarchs.

    • creaker

      What Cyprus is being forced to do is pay for money they’ve been padding people’s pockets with over the years without taking in the revenue to pay for it – which they are now being required to pay for.

      Eventually it will happen here – they’ll have to choose between nailing who profited and nailing everyone else, and they’ll nail everyone else.

      • JobExperience

        I heard Homeland Security was buying a box of nails. (Alex Jones I think?)

  • creaker

    Not only do these places get huge tax breaks – when they don’t show a profit they don’t pay taxes anyway, even though they still use the same infrastructure and resources the rest of us are paying for.

    • JobExperience

      And some even get refunds in profitable years.

      • creaker

        And it doesn’t even touch on subsidies.

  • Shag_Wevera

    My greatest fear in tax reform is that due to the influence of wealth we will end up with something terribly regressive.

    • DrewInGeorgia

      You mean something like what we have now?
      Progressive in appearance. regressive in reality.

    • JobExperience

      M’on back. M’on back. We crushed the dock several months ago.

  • creaker

    With all the animal abuse films coming out of the meat industry, lobbyists have worked hard to fix this – by getting politicians to pass laws making it criminally illegal to film these companies breaking the law, and for animal activists to apply for jobs in the industry (and they have). Not about taxes, but it speaks to the power lobbyists have in government.

    • JobExperience

       Congress: Animal rights=Terrorism

  • atakemoto

    Corporate tax breaks can help corporations amass more money to buy political influence.  What a neat, tidy circle.

    • JobExperience

       It’s getting jerkier all the time.

  • jefe68

    With large corporations such as GE, Google, and Apple paying almost nothing one has to ask. When does this nonsense end?

    These corporations were given the freedom to grow in a country that has laws, a decent police force and legal system to enforce them. They also have fire departments, infrastructure ( wich is in dire need of repair) and yet they want more.

    George Carlin was right: http://www.youtube.com/watch?v=LuH1D2OCnn8 

  • John_in_Amherst

    “Citizens’ United” gave corporations the same right of “free speech” as people.  Maybe the SCOTUS would like to give real people the same tax breaks as big corporations? 
    When will we wake up and stop kowtowing to the golden calf of big business?

    • StilllHere

      Yawn.  What are you so afraid of? 

      • John_in_Amherst

        Yawn indeed. a right wing troll rejoicing in big business interests trumping the rights and economic welfare of individuals….

  • IzzyFurreal

    Reinforces the disastrous decision by the Supreme Court on citizens united.  Money is not free speach, it is corrupting our republic

    • JobExperience

      Supreme Court: Corruption=Free Speech

    • StilllHere

      How so?  What’s the evidence?

      • IzzyFurreal

        Take a look at the sources of Federal Revenue at CBO http://www.cbo.gov/publication/43153.  Over $1.9 Trillion is collected in taxes and social security from individuals a sixth (<$200 billion) is collected from business.  The lobbying which is subsidized as a business expense exacerbates this problem.  Tax breaks are a form of subsidy.  We need to have a level playing field. No reason why GE should have an effective tax rate of 15% when I have an effective of 28%.   

  • creaker

    People go on and on how the tax code should be simplified – the monster share of the tax code are tax breaks. And you’ll never simplify the code without getting rid of these.

  • Coastghost

    “Honesty in reporting”: hark! a novel concept! To hear Chris Rowland, the secular economy belongs to the Federal government by default. Tom Ashbrook doesn’t contest the notion, either. A distinct pity WSJ’s James Taranto wasn’t invited to challenge these fair notions . . .
    http://online.wsj.com/article/best_of_the_web_today.html
    e. g.

    • Doubting_Thomas12

      So what I see here is a lot of distraction and willful misinterpretation of a rather simple concept. Nobody in the comments thread even discusses the concept, amusingly enough.

      To answer the question though: yes. If you paid someone else to build it, then you didn’t build it, but you helped to build it. If you try to lobby to pay no taxes to contribute to the building of something, then you’re nothing but a mooch, and you most certainly did NOT build it.

      Try contributing something to our great country, so you feel like you have some sort of stake in it. Otherwise, hurry up and move elsewhere like the rest of the tax-dodgers, so the real makers can fix the mess you left us.

  • William

    Tom, How much did PBS/NPR get? 400 million?…does that bother you? 

    • WorriedfortheCountry

       Those were the ‘good’ lobbyists.

      • creaker

        There are a number of industries who spend way  more than $400 million just for their lobbyists.

      • JobExperience

         An all-embryo puppet show is coming to Sesame Street using sonogram TV. With TIVO you can watch  it 24/7, and I know you’ll pledge because you’re so Gynecological. The Koch Bros. will never let go of NOVA with their subtext of volcano and  solar caused climate change. PBS is in the thrall of corporate money just like ABC. Nothing escapes a Black Hole.

        • WorriedfortheCountry

           Black helicopter much?

      • DrewInGeorgia

        At least that subsidization yields something other than an ultimately uninhabitable environment.
        And you both HATE public broadcasting right?
        Neither of you would EVER feed at what you see to be the publicly funded trough, would you?

        You two have refined biting the hand that feeds you into a science. Or a cult. If the goggles fit…

        • William

           It is about being honest. How can Tom complain but his company is receiving the same thing.

          • DrewInGeorgia

            This will cover both replies:
            Clueless.

          • WorriedfortheCountry

             That was cowardly since apparently you can’t answer my specific question.

          • jefe68

            No the cowardice resides in your comments.

          • DrewInGeorgia

            You’re right I’m “cowardly”.
            What was the question? Oh yeah, borrowing from China to pay for NPR.

            Do you really think that any of the money we’re “borrowing” from China goes directly to subsidizing NPR? You can move the cups around all you want, the ball has already left the table.

            I’m sticking with clueless.

          • William

             Look in the mirror.

        • WorriedfortheCountry

           Is it worth borrowing that $400M from China each year to fund it?  What would happen if it was cut?  Does On Point really need 8 producers?  These are all valid questions and are worthy of debate.

          I suspect NPR/PBS would function just fine if they severed the cord.  This is the perfect example of the inertia of government.  Once it is there it is impossible to remove.

        • jefe68

          Here, here.

    • MrWakiki

      this is a good point, but I wonder, are you saying it is okay for whirlpool to do it, but not NPR… I would say it is wrong for both

      • William

         Tom is not being honest. His company is receiving a huge welfare check and yet does not mention it.

    • nj_v2

      ^ Unclear on the concept (National Public Radio)

    • Michiganjf

      Snap out of it, ‘Pubbie….

      NPR got 2% of it’s 180 million total budget from the Gov., or appx. 3.6 million.

    • IzzyFurreal

      PBS/NPR are used as interests of national power overseas. Foreign national know that the comercial outlets are puff piece journalists.  When PBS/NPR brand is used it is the gold standard like the BBC.  While I dont like the subsidy, a nation that cant provide for arts or culture is no longer great.

  • Yar

    Call it what is is. Quid-Pro-Quo!  This is how we fund our election and perpetual campaign system.

    • JobExperience

      Today we’re financing Obama’s bid for President of Israel. He’s an Apartheid Buddy.

  • ElihuJ

    Here’s an idea: tax code has NO CREDITS! Not for anything – child care, mortgages, whatever. Instead, Congress has to vote for each subsidy as a line item, with votes reported. Then it will be perfectly clear to whom the nation is giving money, and what influences are steering national policy. It also takes pressure off legislators currently coerced into what they know to be bad economic policy. Would also make bookkeeping and projections a lot simpler.

    • DeJay79

       and stop the gravy train/ Lobbyist would have to work hard and be scrutinized, they will never let that happen.

    • StilllHere

      .

  • creaker

    I work for a financial company – because of SEC rules I can’t even accept a t-shirt from a vendor. I can’t buy or sell as much of a share of stock without reporting it.

    Then I look at lobbyists in Washington and the revolving door between political office and the corporate world and wonder what the hell?

    • StilllHere

      Yeah, and they’ve got nice t-shirts!

  • geraldfnord

    I don’t see the problem with this:

    As is obvious from how much better a deal they have than the rest of us: rich persons, whether people or corporations, and whether their money were honestly earned, borrowed, inherited, or stolen, are by their wealth marked as smarter, cooler, and fundamentally better than us. They are God’s Elect—’Touch ye not the LORD’s Anointed! ‘ and the Parable of the Talents come to mind, as does what some liebruls derided as the ‘Abominable Fancy’.

    This why, as everyone knows, that the Government, for which everyone has an equal vote, should do essentially nothing, and the Market, where rich persons, natural and artificial, dominate, should make all of our world’s decisions. It is only just and fair that those dominant market players have as much freedom as possible to exercise their essential better-than-us-ness.

  • MrWakiki

    what I understand is people like Mitt Romney, John Kerry and corporations get something like a 3-1 return on lobbying, so of course they do it and of course it benefits the well off, not the small businesses — who I might add ARE the job creators 

  • DeJay79

    154 Billion!! now that is wealth redistribution.
    and its all for profitable Corporations.

  • Thinkin5

    Ironic that all the tax breaks and subsidies for oil companies is just dandy to many of those on the right but, any of these same breaks or hand outs going to energy efficiency or green energy is an outrage. Kind of obvious whose the favorite, chosen winner. And the oil is coming out of America’s land!

    • creaker

      All depends on where your money is invested. Or who your future employer might be when you leave office.

    • MrNutso

      As one guest said, these breaks should be removed and the “spending” in the budget where it can be seen.

  • IzzyFurreal

    Corporations continue to hold the U.S. hostage. Give us Tax breaks or we wont hire and the economy won’t grow.  Americans need to break this cycle by eliminating gerrymandering, passing a constitional amendment reversing Citizens United and learning to live less extravagently.. 

  • WorriedfortheCountry

    Of course the tax code needs to cleaned up by massive simplification, removing special loopholes AND lower the rates.  The tax code is over 70,0000 pages.  The compliance costs are huge and hurt small companies the most.

    Equally important are the bloated regulations that have built up over the years.  The Feds should invest in a project to dramatically reduce regulatory bloat that is killing our competitiveness. Every regulation should be put through a cost benefit analysis.  They usually only measure the benefit side of the ledger when passing regulations.

    • MrWakiki

      Not to deride your point too much, but I have read several books (Walmart Effect for one) that shows what hurts small companies the most are large companies.. Large companies that do things like the current show points out — Large companies lobby to make the tax code better for them and often to hurt small company competition

      • WorriedfortheCountry

         GE has 2000 tax lawyers on staff and they voila they pay zero tax despite huge profits.  I’m not sure where we disagree.

        • MrWakiki

          The guy just proved my point… I don’t think we do, but it isn’t the complication of the tax code because of politicians in themselves, but the fact that big business is screwing up the country… 

          I say bring back the monopoly laws.. or enforce the ones that exist

          • MrWakiki

            PS, I don’t think we do disagree

    • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

      Equally important?

      Nice false equivalency there.

  • Coastghost

    Boston Globe’s tax status? NYT getting any tax benefit in selling the Globe? How is Boston University’s tax status these days? Any companies based in Massachusetts you’d care to illustrate your arguments with, Mr. Rowland? It could be very interesting to hear you say.

    • WorriedfortheCountry

       Harvard isn’t moving to Cyprus any time soon.  The EU would be licking their chops to get their grubs on the multi-$Billion Harvard endowment.

  • http://www.facebook.com/jurgen.weiss.1481 Jurgen Weiss

    Two comments:
    1. Christopher’s article in the Globe mentions a report by the Joint Committee on Taxation. It would be great to include the source here so that interested citizens can go to the real source.
    2. Tax credits are a really lousy way of accomplishing societal goals. Renewable energy is mentioned a lot -Investment and Production Tax Credits are touted as being very important for the development of renewable energy. While this is true, they are very inefficient mechanisms for supporting the development of renewable energy. Making non-renewable energy more expensive (through carbon pricing, for example), properly structured feed-in tariffs etc. are much better approaches.

  • Coastghost

    Oh yes, by all means, let’s trust our trustworthy journalists. Let objective detachment and financial disinterest reign!

  • StilllHere

    Flat tax, no breaks for anybody or any entity!
    No charitable deduction.
    No mortgage interest deduction.
    No state tax offset.
    No earned income tax credit.
    No itemized deductions period.

    • nj_v2

      ^ Champion of regression!

    • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

      At some point I’m not going to throw up my hands and say “The only way out of this is a flat tax”.

      Because somewhere in a boardroom a bunch of people in suits are plotting to make millions of ordinary Americans give up on this. That’s their goal to screw things up to the point that framing the tax rate the same on $20k, $200k and $20m as some sort of effing good change.

      I’ll be damned if I’ll be their helpful cog.

  • MrNutso

    The deep pockets are the people who put them in office.

  • creaker

    Tax breaks are also just a piece of the pie – huge, costly functions are outsourced by industry onto the government. Just using airlines as an example – why am I paying for TSA and flight control when I haven’t flown in years?

  • TomK_in_Boston

    Deja vu! Ryan wants massive tax cuts on the rich, and super rich corporations paying less to support the USA than ever and wanting to pay even less. Class warfare is non stop. These two graphs tell the story. No, US corporations are not overtaxed – their burden has been SHRINKING over time, just like with rich individuals. Even worse, they used to use their wealth to pay good wages and benefits to US workers, and now they simply regard Americans as expenses to be cut. 

    Screw them. http://betweenthebalancesheets.files.wordpress.com/2011/10/effective-corporate-tax-rate.png?w=630&h=458http://thinkprogress.org/wp-content/uploads/2012/02/corporatetaxcharts0222.png

  • ericd725

    why can’t they just make lobbying  illegal (It’s basically bribery)

    • jefe68

      1st amendment.

  • jbfromsc
  • http://www.facebook.com/profile.php?id=1585791806 Karen N Basso

    Along with 4 others, I own a small business that employs onnly about 18 people. We pay the 35% corporate tax rate and also, pay personal income taxes on our incomes from the business. We are not looking for a tax break, just a fair shake. Our representatives in Washignotn need to wake up and realize that this outrageous situation has to be cleaned up.

    • MrWakiki

      and you deserve it

    • StilllHere

      What does your representative in Washington say when you tell him?

    • jefe68

      this is why when I hear any politician talk about “small businesses” I know they are just talking aout of the sides of their mouths. It’s not about people like you, you don’t count in DC, it’s about the GE, Apple, Google, Westinghouse, Exxon/Mobil and on and on.

      What you are describing is a rigged game. 
      And it’s a shell game at that.

    • hennorama

      Karen N Basso – congratulations.  Paying taxes means you’re profitable, which has been no small feat over the last few years, especially for micro-businesses like yours.

      We really should be calling businesses of this size “micro-businesses” rather than lumping them in with “small businesses” that have as many as 500 employees. IMO

      FYI – SBA’s common Size Standard for “small business” is
      •500 employees for most manufacturing and mining industries, and
      •$7 million in average annual receipts for most non-manufacturing industries.

      Source:http://www.sba.gov/content/summary-size-standards-industry

      You might want to check with a tax professional who specializes in corporate taxation of businesses of your size, as there may be strategies that could reduce your overall Federal (and state and local) taxation.  Just one example would be to restructure (reduce) salaries for shareholders, and instead pay out qualified dividends, which would generally be taxed at a lower Federal rate.  This would also reduce Social Security and Medicare taxes paid by the corporation and the shareholder employees.

      On the other hand, such salary reductions may reduce future SS benefits of those whose salaries are reduced.  You’d need to weigh out the pros and cons of any changes, obviously.  There could also be strategies for various retirement plan options that might be worth looking into.

      Congratulations again on your success.

  • CatInBoston

    Until politicians stop needing such massive financial backing to get elected, we’ll never get rid of lobbying. Campaign finance reform is a huge piece of this puzzle.

  • WorriedfortheCountry

     Here is a good example of stupidity in the tax code.

    The government is providing a $7,500 tax incentive for electric cars.  Who could be against electric cars right?  The government sends $billions in incentives and loans to companies to develop electric cars so let’s get rich consumers to buy them; all in the name of reducing CO2 emissions.

    Guess what?  They’ve analyzed the CO2 savings over the life time of the electric car and the CO2 is only worth $44 — and that is only if somehow you magically avoid coal power plants from your power source.  That’s right.  A $44 savings for that $7500 tax break for your rich friend.   Only in Washington would this ‘deal’ be allowed to stand.

    http://online.wsj.com/article/SB10001424127887324128504578346913994914472.html

    • nj_v2

      Desperately wanting to be taken seriously while offering no alternative to that which he (erroneously) decries, I’mOhSoWorried keeps posting dubious calculations from Lomborg (of course given a venue by Big Biz friendly mangers of the WSJ Op-ed page) as the entire basis for his case against subsidies for electric cars.

      Bebunking Lomborg here:

      http://cleantechnica.com/2013/03/17/bjorn-lomborg-dirty-little-mistakes/

      Bjorn Lomborg’s Dirty Little Math

      • WorriedfortheCountry

         Your link is busted.

        Lomborg has written books on the subject of the policy stupidity driven by activists — and he is also a warmist not a ‘denier’.

        • nj_v2

          Your computer is broken. The link works for me. Maybe you’ve got your browser filter set to allow only right-wing distortion.

          Lomborg’s “analysis” is full of bogus assumptions.

          Add http://

          to

          cleantechnica(dot)com/2013/03/17/bjorn-lomborg-dirty-little-mistakes/

          • WorriedfortheCountry

             It works for you because you fixed it.  Give me  a break.

      • WorriedfortheCountry

         I read the rebuttal and it is very weak.  Even if you take the 4x numbers put forth by the ‘bread baker’ author for the cost of carbon it is still a horrible deal.

        The author doesn’t adequately address the logic in Lomborg’s thesis that the lifetime mileage will necessarily be low since the range per charge starts at 73 miles and goes down over time.  If the batteries are replaced then another large carbon deficit must be made up.

        Notice the author doesn’t add up HIS new numbers.  Why?  Because it would still show a large deficit vis a vis the $7,500 tax credit.

        Try again!

    • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

      WSJ OpEd?

      I shoulda known.

    • StilllHere

      Hard to argue with the facts presented, so they’ve no choice but to go after the source.

  • Ellen Dibble

    So we have a plutocracy or corporatocracy, basically puppets being run by those who have escaped competition, knowing how to keep the moats in place, as David Cay Johnston puts it.
          What does Citizen United have to do with this?  I don’t hear that this anti-competitive system spiked after that decision?  But was primarying such a big deal before lobbyists had so much sway?

  • MrWakiki

    this is almost too ironic to be true — white collar outsourced… who is left to pay taxes

  • terry7

    For those of us who are incensed by this vicious cycle of congressmen, addicted to corporate contributions, serving the interests of the corporations rather than than the interests of the voters, WHAT CAN WE DO TO CHANGE THIS?  Calls to our congressional offices are ineffective.  Even good bills are undermined by last minute special interest add-ons. Elections are determined by special interest campaign contributions to unseat any lawmakers who oppose them.  Which clean government organizations, having the best chance of changing this system, are worth our support?

  • Ellen Dibble

    Johnston says we have to figure out what sort of workforce/products and services we should be doing, on a global scale.
        What about an international code of behavior that prevents governments warping things?  Level THAT playing field.

    • JobExperience

      WTO was supposed to do that but instead followed the secretive, tyrannical and elitist corporate model.
      UN with World Courts was supposed to do that but is always vetoed by the Perpetrators.

      Duh, what do you think the Battle in Seattle was about? Occupy Northampton!

  • Ellen Dibble

    So instead of a Communist government nationalizing the major industries, we have the major industries “nationalizing” (owning) the government.  

    • JobExperience

      A-definition of Totalitarianism
      B-definition of Fascism

  • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

    This interest in Coburn and Republicans, or Beltway “centrists” like Simpson and Bowles, saying what us lefties have for years and years: Just an indication that it’s “safe” for the media to talk about the subject in depth?

    • WorriedfortheCountry

       ’centrist’?  Simpson and Bowles tax reform locks in revenues at 21% of GDP.  A record high.  I’m shocked that leftists aren’t chomping at the bit for those kind of revenues flowing into the federal government.

      • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

        Yes, “centrist”. Very Beltway, very “Catfood Commission”.

      • Ray in VT

        Given the history of federal spending over the past 30 or so years, if we want to pay down the debt, then that might be what it takes.  Of course we also need to deal with entitlement growth.

        • WorriedfortheCountry

           You might be right. Given they can’t even agree to balance the budget within 10 years, I don’t hold out much hope that they’ll try and pay down the debt — at least with this set of clowns in DC.

          • Ray in VT

            That’s the problem with reform attempts.  You’re always going to step on someone’s toes, and most of the people in Congress are locked in a perpetual campaign, where millions are spent and the opposition jumps on any misstep.  I still hold out hope for some “grand bargain”, where both sides leap together.  After all, Americans always do the right thing, after we’ve tried everything else.

          • WorriedfortheCountry

             I hope you are right but I’m not as optimistic since they can’t agree on the goals of fiscal discipline.

            IF they could agree on the parameters then all that remains is give and take on priorities — granted there are major differences on priorities.  Without the parameters, there are no constraints and you’ll never get anywhere.

  • Ellen Dibble

    Both politics and competitive enterprise are corrupted.  We have to encode this into public discourse so there is no way not to always have this reality “on the table.”

    • JobExperience

      The conductor will be coming up the aisle folks, so get those bribes ready….
      Knowing is good, but doing something about it is better.

    • WorriedfortheCountry

       Yes, but often corrupted enterprises eventually go away.  However, the tax code just grows and grows.  70,000 pages and growing daily.

      • StilllHere

        I think 70,000 is a low estimate.

  • creaker

    One of the problems is “free trade” – basically giving our markets to whoever can make stuff cheapest elsewhere.

    They should revive the idea of tariff’s, but not on countries. They should levy tariffs on corporations that don’t contribute much to our bottom line. If they don’t like it, they are free to stop selling their products here.

  • Coastghost

    “Very interesting”, “very informative”, “very compelling”. Very hyped, very much so.

    • StilllHere

      Zero substance, no context, journalism at its worst.

  • MrWakiki

    Is this story on Fox News or CNN…

    fair and balanced

  • StilllHere

    Apparently that was too complicated for you.

    Another suggestion:  end taxing of corporations at all, increase tax on dividends, interest and capital gains.

    • Ray in VT

      If they could come up with a way to do that that would balance out the numbers and shift that burden to those who were really benefiting, then that might be worthwhile.

    • WorriedfortheCountry

       One serious problem with long cap gain taxes is they aren’t indexed to inflation.  It is possible to have a large tax liability on a ‘real’ loss.

  • DeJay79

    If it is about jobs for the people and profitability for the corporations then remove all Corp taxes. A tax free market for companies and just shift government income to peoples income and sales taxes.

    • JobExperience

       Nazi Germany emphasized “Efficiency” too.
      We often call it “productivity.”
      It’s how much you can squeeze out of your hires in a set period of time before they need discarding. Government covers decommissioing by taxing the hires remittances.

      DeJay is full of shifts.

      • DeJay79

         like the citizens are all professional athletes, yet not compensated as well.

        full of shifts, lol were do you suggest the gov. get its money?

  • http://www.facebook.com/profile.php?id=631311553 Chuck Sherwood

    Are you folks aware that Fred Upton Congressman from Michigan and Chairman of the House Commerce and Energy Committee is one of the Upton Family, who owns Whirpool?

    • ericd725

      Rockefeller all over again

    • StilllHere

      Are you sure?  Doesn’t show up on Yahoo Finance.

    • jbfromsc

      What da    wow    

    • WorriedfortheCountry

       You too can own Whirlpool.  It is traded on the NYSE under ticker WHR.

      His ancestors founded the company.

      • JobExperience

        Let’s pork him, not her.
        A rich minority owns most stocks.
        They are no good without insider info.

    • JobExperience

      Whirlpool includes Kenmore and Hotpoint usually, among others. Like cars these items are nearly completed offshore or in Mexico. With the cord or nameplate added here it’s “Made in the USA” American wages are reflected in the price although not in the cost. Same with many other products. And the profits remain offshore. Even tater chips from Lays use this accounting method.

  • GrannyKG

    Why aren’t the Tea Partiers using their votes to stop this unfair system? Could it be that they are really just puppets of the big corporations themselves??

    • WorriedfortheCountry

       Couldn’t you make that charge on all sides, including Obama?

      Personally, I think it is criminal that corporate tax reform was tops on Obama’s agenda 4 years ago since it could be more powerful than any spending stimulus they could have dreamed of to stimulate the economy and grow jobs.

      • JobExperience

        But the Tardiers are in the sub-basement when it comes to knowing the facts. Obamanauts may know some facts and still worship the Uberwealthy. I can’t decide which is more degenerate. Both categories have developed big appetites for sadism.

      • TomK_in_Boston

        “Reform”, LOL. That’s voodoo econ code for cuts. I’d like real reform, to reward creating jobs in the USA and to penalize offshoring. Maybe even incentivize providing decent wages and benefits. The corporate tax burden has been shrinking over time despite the propaganda to the contrary, no need for more cuts:

        http://betweenthebalancesheets.files.wordpress.com/2011/10/effective-corporate-tax-rate.png?w=630&h=458

        • Ray in VT

          There’s also the share of corporate income taxes as a share of GDP, Tom.  That number, which was 1.2% in 2011, has been substantially lower in recent decades than it was previously.

          • TomK_in_Boston

            Sure. They pay less, have their pet media blow smoke that they’re paying too much, demand that they pay even less, and scream about the deficit. Time for the pitchforks and torches yet?

          • Ray in VT

            I’m reluctant to go with the pitchforks and torches route.  Personally I think that the citizenry can affect a lot of change via personal choices, but the question is will the citizenry do that.  I’d consider government action to probably be a somewhat less effective, although maybe more likely, method, although that also has problems.  I don’t see some of our systemic problems correcting themselves, especially when some are profiting greatly and others are willing to just let it be.

          • TomK_in_Boston

            We can take our $ out of the RICO megabanks (I did), patronize businesses that treat workers decently (Costco) and try to buy made in USA products, but for some items almost nothing IS made in USA. Of course, don’t vote for class warriors.  Did you have something else in mind?

    • TomK_in_Boston

      Dupes of the corporations and plutocrats, manipulated into opposing their own interests.

      The corporate tax burden has been shrinking over time. It wd be insane to make it even lower. 

      The code should be modified to reward creating jobs in the USA and to penalize offshoring. Maybe even incentivize providing decent wages and benefits.

  • ericd725
    • WorriedfortheCountry

       Move to Cyprus. 

      • Ray in VT

        I’d rather just try to get us back to a more equitable distribution of income such as existed under Clinton or even Reagan.

        • WorriedfortheCountry

          The question is how?  Instead of focusing on the rich we should focus on growing the economy and creating opportunities for folks to move up.

          If you look at the tax code, the top rate is higher than Clinton’s (with the new Obamacare tax) and rates for the middle and low end are much lower and there are large EITCs that didn’t even exist under Clinton.

          • Ray in VT

            That is the $64,000 question, right?  I am skeptical regarding the idea that growth in and of itself will create broad based prosperity.  For instance, we’ve seen median income drop for 4 straight years, and, granted, we have had a rough go of it during that period of time, but the economy has grown, although not enough to be sure, but those gains have not been shared.  We are seeing record corporate profits, but tight wages, and the pressures of globalization have created problems for some sectors of the traditional economy.

            To be sure there are likely to be some changes to the distribution of income with the higher taxes on the top earners down the road, but even given the Bush tax cuts that were made permanent for lower income earners and things like the earned income tax credit, the nation’s income has continued to filter to the top, and I think that that is bad for society.  We have decreased social mobility, and a lot of people who are working very hard are seeing their efforts less rewarded.  For instance, I spoke to one of my former co-workers from IBM a while back.  He, and the others that I know there, have seen their shift differentials cut and their benefit costs highly increased.  He’s bringing home less in absolute terms now than he did 3 years ago, while the company raked in $5.8 billion in profits last quarter.  Now, I am not one to think that government can fix all problems, but it certainly seems as though the marketplace is not doing anything to alleviate some of the problems that are going on in the labor market, and I’m not sure what the solution is, but I don’t trust the invisible hand to take care of it.

          • WorriedfortheCountry

             It is difficult for the market to create upward pressure on wages when unemployment is hovering around 15% (U6) for such a long period.

            You’ve given some good food for thought. 

            However, I bet the IBM employees are pretty happy cashing their profit sharing checks.

          • Ray in VT

            My friend didn’t mention anything about that, but I didn’t ask.  I know that my father in law is scared to death that his division is going to get sold off and that he is going to get screwed on his retirement.

          • Ray in VT

            I will also just say that I think that part of the problem is us as a people.  In our search for the cheapest price for goods, we’ve forgone the goods that were once made by our neighbors in favor of goods, which sometimes are as good and sometimes not, made in low wage nations.  Just take a look at the shoe industry, textiles and furniture making.  They’ve all been hit very hard, and, to a certain extent, those wounds are all self-inflicted, although the desire for greater profits has certainly caused some companies to go that route.

          • Gregg Smith

            I agree but it’s tricky. On one hand, buying cheap goods saves money in the short term but cost more in the long run. A good quality widget that lasts twice as long as the cheap widget makes more sense. On the other hand, if the cost of the widget is high not because its better but because of the costs of regulation, compliance, inflated wages and unsustainable pensions then it’s a wash. I  try to buy American when I can but I have my limits. I’m looking for value, bang for the buck, and if I’m going to pay more there needs to be a good reason.

            I also think good ethical practices result in more profit.  If a business wants to make huge profits then the best way, in the long run, is to provide good value at the lowest possible price, so I look at profit as a good thing.

          • Ray in VT

            Profit generally is a good thing, but I question it when a company pays top management millions while not paying many of its workers enough to get by, or, say, by producing a product that is known to cause cancer and using various lobbying groups to fight efforts to get that known carcinogen out of products.

          • Gregg Smith

            If the jobs are filled then the pay is adequate. If the pay is not adequate the jobs will not be filled. If the top management’s pay is not justified the business will fail. Ditto everybody down to the janitor.

            No one advocates spreading cancer for profit.

            There is a caveat of extenuating circumstances and this relates to my previous reply above regarding distribution of wealth as well as this one. When we have a President and Congress making policies that are killing jobs and running the economy into the ground as we do now then things get skewed and choices are limited.

          • jimino

            If all the gains from that growth go to less than 10% of the population, what good does it do to make growth your goal?

            http://elsa.berkeley.edu/~saez/saez-UStopincomes-2010.pdf

          • hennorama

            WorriedfortheCountry – presumably you are talking about the dollar amounts of the Federal Earned Income Tax Credit (EITC) when you typed “there are large EITCs that didn’t even exist under Clinton.” 

            This acknowledges the expansion of the EITC in 2001 under Pres. Bush II, which was part of the reason for Mr. Romney’s “47%”.  Remember, the fact that many of “the 47%” pay no Federal Income Tax is a result of policies enacted by Mr. Romney’s “good friend” Pres. Bush II.

            The EITC has been around since 1975, and has been expanded under several administrations, both Republican and Democratic.  It generally benefits low income working families with children, and is widely viewed as the most successful anti-poverty program in the US.

            It is based on EARNED income (wages or self-employment) and therefore provides significant incentive for people to work rather than be more dependent on other social assistance programs.

            Even during the Clinton era and the enaction of “welfare-to-work”, the EITC was valuable.  According to the Center on Budget and Policy Priorities (CBPP):

            “Economist Jeffrey Grogger of the University of Chicago has found that the EITC is one of the most effective policies for increasing the work and earnings of female-headed families.  Grogger found that the EITC expansions enacted in the 1990s “appear to be the most important single factor in explaining why female family heads [of households] increased their employment over 1993-1999.”[16]  He concluded that the EITC expansions actually had a larger effect in increasing employment among single mothers than the 1996 welfare law.

            “The EITC expansions phased in between 1994 and 1996 not only boosted employment among single mothers, but the women who benefited most from them likely had higher wage growth in later years than otherwise-similar women, according to research by Molly Dahl and Jonathan Schwabish of the Congressional Budget Office (CBO) and Tom DeLeire of the University of Wisconsin.[17] 

            ” In a recent CBO working paper, Dahl, Schwabish, DeLeire, and University of Wisconsin economist Timothy Smeeding project that the EITC — by raising employment and earnings levels for working-age women — will also boost their Social Security retirement benefits, which should result in lower poverty in old age. [18]   (Social Security eligibility and benefit levels are based on how much one works and earns.)

            “Other studies have found that the EITC, by boosting employment among single mothers, has produced large declines in the receipt of cash welfare assistance. ”

            Source:http://www.cbpp.org/cms/index.cfm?fa=view&id=3793

            Do you consider what you describe as “large EITCs that didn’t even exist under Clinton” to be bad things, and if so, why?

          • WorriedfortheCountry

            My biggest concern with the EITC is fraud, particularly from illegal immigrants.  Also, I also believe it is important that most people should have skin in the game.  That said, EITC probably has some benefits.

            I remember a few years ago when my coworker told me that his  son in his early 20s (with a young wife and child) was incredulous that he was getting a check from the government.  He gladly took it but he didn’t think he deserved it.

          • hennorama

            WorriedfortheCountry – Thank you for your response. I respect your views.

            Indeed, fraud is a problem with the EITC, as it is with many Federal programs. The recent incident of the FBI raid on The SCOOTER Store headquarters in New Braunfels, Texas comes immediately to mind, since from 2009 to 2012, government auditors found The SCOOTER Store had overbilled Medicare by as much as $108 million.

            Hopefully sequestration does not impact IRS and other Federal tax fraud enforcement efforts.

            There are other issues with the EITC as well, notably a “marriage penalty.” This was significantly reduced by the 2009 Recovery Act, and EITC marriage penalty relief was extended through 2017 with the recently enacted American Taxpayer Relief Act.

            See:http://www.cbpp.org/cms/index.cfm?fa=view&id=2505

          • Gregg Smith

            When Clinton kicked 6 million off of welfare and turned them into tax payers it was a huge boon to the economy. Bush’s expansion of the EITC was a huge gift to the poor and the difference was made up by the rich. The rich ended up paying 2% more of the overall bill and 6 million poor saw their tax liability disappear completely. Not only that, they received money, checks in the mail, that came from the rich. The rest of the poorest that still had to pay taxes got their rate lowered more than the top rate was lowered. I will never understand how the Bush tax cuts are said to have favored the rich.

        • Gregg Smith

          Income is not distributed, it’s earned.

          • Ray in VT

            Bull.

            Income is distributed throughout the economy, and it is not always earned.  Sometimes it is inherited, although one might just call that wealth and perhaps not income, sometimes it is what is considered unearned income, such as when a guy without a job makes 22 million in a year.

            The fact is that the financial rewards of our system have been consistently been going into fewer and fewer hands over recent decades, while many hard working people have been left further and further behind.  Some people get millions to hit a ball, and others walk away with millions after running their companies into the ground.  At the same time farmers have suffered through unstable price periods where prices have fallen below the costs of production and workers at highly profitable companies have had their wages frozen.  We used to do better as a nation, at least until about 30 years ago.

          • Gregg Smith

            “The fact is that the financial rewards of our system have been consistently been going into fewer and fewer hands over recent decades, while many hard working people have been left further and further behind. ”

            I have no idea how you take that and conclude income is being distributed. None. 

            I have no problems with millionaire athletes, it takes zero money out of my pocket. Warren Buffet or George Soros takes don’t affect me a bit. Nobody tells me where to work. No one but me determines my worth in the marketplace. Regarding farmers, the problems they are having have nothing to do with the wealthy. 

            I earn every penny I make, no one distributes squat to me.

          • StilllHere

            Undeniable.

      • nj_v2

        I’d rather send you to Cyprus.

      • Gregg Smith

        What is happening in Cyprus is chilling. It is the result of failed Keynesian policies. It can happen here and has been suggested.

      • JGC

        I wonder if Gérard Dépardieu had already transferred his millions into a new account at First National Cyprus Bank, and is just finding they may grab 10% of his savings. I hope he at least got a free toaster to go with his new Russian passport and Cyprian Jumbo Savings Plan.

    • nj_v2

      Thanks!

    • OnPointComments

      I thought about linking to the same video I did before, but I was afraid Disqus would explode.
       http://www.youtube.com/user/LearnLiberty?v=44LHBViTZI0 
       
      The report noted in the video:
       ”Income Mobility in the U.S. from 1996 to 2005″
       http://www.treasury.gov/resource-center/tax-policy/Documents/incomemobilitystudy03-08revise.pdf 
       
      The key findings of this study include:
      •  There was considerable income mobility of individuals in the U.S. economy during the 1996 through 2005 period as over half of taxpayers moved to a different income quintile over this period.
      •  Roughly half of taxpayers who began in the bottom income quintile in 1996 moved up to a higher income group by 2005.
      •  Among those with the very highest incomes in 1996 – the top 1/100 of 1 percent – only 25 percent remained in this group in 2005. Moreover, the median real income of these taxpayers declined over this period.
      •  The degree of mobility among income groups is unchanged from the prior decade (1987 through 1996).
      •  Economic growth resulted in rising incomes for most taxpayers over the period from 1996 to 2005. Median incomes of all taxpayers increased by 24 percent after adjusting for inflation. The real incomes of two-thirds of all taxpayers increased over this period. In addition, the median incomes of those initially in the lower income groups increased more than the median incomes of those initially in the higher income groups.

      • OnPointComments

        Or if Disqus didn’t explode, posting the previous video again would have surely pushed Hennorama over the edge.  :)

        • hennorama

          Wow.  I get a separate mention?  Whatever for? ;-)

          BTW – just off the top of my head, as I haven’t yet read the study:

          Examining income mobility during a period of two US market bubbles (stocks and housing), and just prior to the Great Recession, might not give one the best picture.  Imagine for example, if one sold their home during the housing bubble in 2005 for a large taxable gain, and as a result this moved one into a higher quintile.   Conversely, imagine if one sold stocks at a large gain in 1996, then had no corresponding sales in 2005, after the stock market bubble had exploded.

          It would also be interesting to learn the persistence of the movements cited in the study.  In other words, how long did those who moved from one quintile to another stay in the new quintile?  And was there any subsequent reversion to the prior quintile, or other quintile?

          Again, that’s just off the top of my head.

          Thanks for not posting that other nonsense.

          • OnPointComments

            I think one of the primary points of the study and the video is the fluidity of wealth and income, and that looking at static composite data at a point in time, or comparing static composite data from two points in time, doesn’t tell the story that looking at individual households tells.  It’s somewhat intuitive:  the bottom quintile today likely includes many new high school and college graduates that a decade or two later will have moved to higher quintiles; likewise the 60 year old in the top quintile today will likely have moved to a lower quintile in retirement.
             
            “The degree of relative income mobility among income groups over the 1996 to 2005 period is very similar to that over the prior decade (1987 to 1996). To the extent that increasing income inequality widened income gaps, this was offset by increased absolute income mobility so that relative income mobility has neither increased nor decreased over the past 20 years.”  The study states that income mobility hasn’t changed a lot from an initial study done for 1967-1976, and a study for 1977-1986.
             
            If you want to watch a slightly longer video (4-1/2 minutes ) on income mobility covering 40 years:
             
            http://www.youtube.com/watch?v=UbueX92CKPk

          • hennorama

            OPC – TY for your response. Indeed there are obvious reasons for movements among various income quintiles, as you mentioned. Even a one-time event, such as the sale of a home or business is enough to do it.

            It’s important to point out that Video 1 (posted by ericd725) discusses WEALTH Inequality, whereas Video 2 (ver.2) and the Treasury report that you posted discusses INCOME Mobility. Wealth and Income are far different from each other. For example, one can have no income and be wealthy, and one can have high income and no wealth.

            The word “wealth” appears in (your) Video 2 (ver.2) exactly TWICE, once right at the start, from the narrator of the excepted video “WEALTH INEQUALITY IN AMERICA”, then again when Professor Horwitz conflates “wealth or income” (as if they are the same), at 1:17.

            The word “wealth” appears in the Treasury study ZERO times. They were careful to not conflate these terms.

            So let’s be sure we are talking about the same things here, OK?

            For this discussion, wealth = assets – liabilities. In other words, net worth.

            Income is defined differently by various entities, but let’s use the IRS definition of Income items, since that what most people will have in mind, and that’s what the Treasury report studied. From IRS Form 1040 (2012), all of the following are Income:

            Wages, Salaries, Tips, etc.
            Interest Received
            Dividends
            Taxable Refunds, Credits or Offsets
            Alimony
            Business
            Capital Gains and Losses
            Other gains and Losses
            IRA Distributions
            Pensions and Annuities
            Rentals, Royalties, Partnerships, S corps, trusts, etc
            Farming Income and Losses
            Unemployment Compensation
            Social Security and Equivalent Railroad Retirement Benefits
            Gambling Income and Losses
            Bartering Income
            Scholarship and Fellowship Grants
            Canceled Debt
            Other Income

            Source:http://www.irs.gov/pub/irs-pdf/f1040.pdf

            Income and wealth are associated with each other, of course, but they are not necessarily directly correlated. So looking at Wealth Inequality by quintiles, and then discussing Household Income Mobilty by quintiles does not necessarily allow one to conclude the same thing regarding these separate topics.

            Let me use two extreme examples to illustrate my points about the differences between Wealth and Income:

            Taxpayer 1 (TP1) owns a house that has been refinanced multiple times. TP1 used some of the re-fi proceeds to pay for living expenses and to pay off credit cards and auto loans. Due to a decline in housing values, the mortgage of $400,000 far exceeds the house’s value of $200,000. TP1′s only asset other than an older vehicle and a few personal possessions is a 401(k) account containing $575,000.

            Having no other income, TP1 cashes out the entire 401(k), pays off the mortgage and Federal taxes, and has $402 left over. TP1 has high income ($575,000), but is TP1 wealthy? No, since net worth is barely positive ($402, an older vehicle, and a few personal possessions).

            Taxpayer 2 (TP2) has no recurring income, but owns a house outright, has many other assets, and zero debt. TP2 sells $10 million of stock for a total net gain of $100. TP2 pays no income tax since TP2′s total income is $100.

            TP2 takes the $10 million, buys gold bullion, then stores it in a safe at home. TP2 is not a high income taxpayer, but is wealthy, with $10 million in gold bullion, a paid off house, other assets and zero debt.

            If you find a study about WEALTH mobility, then we can see if there are any conclusions that can accurately be drawn concerning both Wealth Inequality and Wealth Mobility.

            One suspects Wealth to be far less mobile than Income.

          • OnPointComments

            I would hazard a guess that more often than not, income and wealth go hand in hand.

          • hennorama

            OPC – indeed, but that’s only a guess. Income and Wealth don’t necessarily go hand in hand.

            Recall too the arguments in the most recent Federal Income Tax Rate brouhaha. When the President wanted to hold the line at $250K, others squawked “But $250K is NOT RICH! Look at the cost of living in (fill in your favorite high cost of living area here)!”

            In addition to the cost of living disparities, we all know people who have what seems to be high income, but they spend every last dime (and often more), without any Wealth accumulation. They have three cars, a boat, dine at fine restaurants, take expensive vacations, have a kid in college that they’re paying for, just paid for another kid’s wedding, are helping Grandma with her nursing home expenses, etc. etc. In other words, their money is spent on consumables and depreciating assets. If they had to come up with $10,000 in less than a week, the only way they could do it is to take a cash advance on their credit cards.

            The US is a nation of CONSUMERS, not Wealth Accumulators (aka Savers). The most recent Personal Savings Rate, per FRED data, was only 2.4% (January 2013), down from 3.7% in January 2012.

            See:http://research.stlouisfed.org/fred2/series/PSAVERT

          • OnPointComments

            I’d like your opinion — no studies, links, data, just an opinion.  Do you think if you looked at the income of people who have accumulated sufficient wealth to be in one of the top two quintiles in wealth, that those people would have what most consider to be high income?

          • hennorama

            Without knowing where the breakpoints are:

            The top quintile – yes.
            Next to the top quintile – probably.

  • jbfromsc

    They hate it when someone tags that video bringing the hits up

  • ericd725

    with all this rich folk bashing, I do have to say, the “Kalamazoo Promise” prabably wouldn’t exist with government  bureaucracy.

    • JobExperience

       I think they require students to study business or marketing. A loyalty oath to the Chicago School of Econ is mandatory. And it’s not like jobs go wanting in Michigan, although youngsters may replace the experienced at half wages. Maybe they’ll all be gun vendors in Detroit.

    • TomK_in_Boston

      “rich bashing”? When the 1% have a greater share of the total income than any time since 1929, the corporate tax contribution as a % is lowest since 1945, and the class warriors are screaming that we have to sacrifice SS and medicare to appease the big bad deficit God, I wouldn’t call asking the ultra privileged to pay more “bashing”. I would call outrage when they ask to pay even less well justified.

  • terry7

    As to the loopholes in the tax code,  I would like to see enumerated and given broad press ONE LOOPHOLE EACH DAY in a national column.  When President Obama asks for support for his effort to close tax loopholes, it is too non-specific.  The word washes over people.  Clear pictures need to be presented as to what these loopholes are:  how many dollars are given to which corporations, which congressmen are supporting those tax loopholes, and how much money those corporations give to those congressmen?

    Is there a database of congressmen, linking their voting records with
    their campaign contributions, special interest by special interest?

    • WorriedfortheCountry

      I disagree.  We need to eliminate ALL the loopholes at once by simplifying the code.  No exceptions. Everyone’s ox gets gored at once.  This is the best way to remove the power of ALL lobbyists.

      • Bruce94

         You know that has no chance of happening thanks to the obstructionism & intransigence of the GOP in their refusal to consider any tax reform (i.e. the elimination of any loopholes whatsoever) that generates a dime of new revenue if that revenue is applied to “deficit reduction” or job creation instead of tax cuts for the wealthy. 

        • Gregg Smith

          With the exception of Erskine Bowles I don’t know of any Democrat who has proposed tax reform. I don’t know of any who have not opposed tax reform proposals from the GOP. I’m sure there must be some. Steve Forbes has the flat tax, Paul Ryan had his tax reform proposal, Herman Cain had 9-9-9 and the Fair tax is supported by many Republicans. I’m not sure how you reach the conclusion that the GOP refuses to consider any tax reform.

          • Bruce94

             I’m defining “tax reform” as the elimination of tax loopholes, particularly those that disproportionately benefit the taxpayers in the top two brackets.  I was not referring to the array of flat, fair, sales, consumption or other tax schemes (with the possible exception of the VAT) that, to the extent they are regressive, would deliver yet another blow to working poor and middle-class families.  In my reply to Worried, I was just pointing to the absurdity of calling for the elimination of ALL loopholes given the reality that conservatives in general and the GOP in particular have stubbornly resisted closing even a single loophole unless the revenue generated is used to lower taxes on the wealthy.

          • WorriedfortheCountry

             Actually both the Fair tax and flat tax proposals (no loopholes) have come from conservatives.  It is the entrenched lifers in both parties that have blocked tax reform.

    • Bruce94

       I disagree.  It was Romney and remains the GOP who have been “non-specific” about which loopholes they would close.  From the early days of the Presidential campaign to the present day, the GOP and their leadership have consistently refused to identify the specific loopholes they would get rid of and have demagogued the issue in general.  On the other hand, Obama and the Dems have identified specific loopholes they would eliminate including:  tax breaks for companies outsourcing jobs or off-shoring their operations; tax breaks for oil companies, tax breaks for hedge fund managers and corporate jet/yacht owners; estate tax loopholes.  In addition, Obama has advocated limiting the total value of itemized deductions and certain exclusions for taxpayers in the top two brackets to 28%, and he has called for changes in the way businesses account for inventory that would result in more revenue.  And don’t forget the “Buffett Rule,” which would have required those earning $1 million or more to pay at least 30%, thereby, offsetting some of the distortions created by the loopholes available primarily to the super rich.  

       

  • http://www.facebook.com/profile.php?id=503540664 Christopher Fortin

    so many selfish things are always being tacked on to otherwise popular, sensible bills. why can’t we have a line item veto like many other first world countries? there’s far too much money in politics.

  • hennorama

    Perhaps we could change a few rules for registered lobbyists.

    Any time they step onto Federal property or meet with any Federal personnel, they would be required to  wear one of those personal sandwich board signs and would be required to parade around the outside of the entrance for a minimum of thirty minutes wearing the sign, regardless of the weather.

    In large letters would be printed something like:

    I’m here to ask Congressperson __________

    For A BENEFIT for __________ Co/Inc/Ltd.  This BENEFIT is estimated to be worth $ __________ to  __________ Co/Inc/Ltd and those associated with __________ Co/Inc/Ltd.

    __________ Co/Inc/Ltd has paid $ ___________ for this service.

    __________ Co/Inc/Ltd has paid $ ___________ into

    Congressperson __________ ‘s various election campaign funds and employs/does not employ (circle one) Congressperson __________ ‘s son/daughter/spouse/other relative.

    • brettearle

       Hennorama out Buchwalded, Buchwald.

      • hennorama

        brettearle – Thank you for your very kind words. However, I have never been worthy enough to even empty Art Buchwald’s ashtray or change his typewriter ribbon, let alone ” out-Buchwald [Art] Buchwald”.

        The man is a legend. May he rest in peace (but he’s probabaly still typing and smoking that cigar).

        http://latimesblogs.latimes.com/.a/6a00d8341c630a53ef0120a5d454c0970b-pi

        • brettearle

          Ok, ok……

          So I’ve put you up on an unrealistic pedestal. 

          Just don’t fall on your way out.

          [And stop being so humble.  It's beneath you.]

          • hennorama

            brettearle – my ego is quite healthy, TY, but I’m no Buchwald. Thanks again for your kind words.

          • brettearle

            My only tragic flaw is that when I’m being facetious some people pretend to take me seriously…..

          • Gregg Smith

            I must say I’m never sure where you are coming from but I enjoy your comments.

          • hennorama

            Is this like the old joke “I made a mistake once – I thought I was wrong?”

  • Bruce94

    Good panel and especially relevant topic today considering US corporations’ effective tax rate is hovering around 12%, the lowest in over three decades, while profits continue to soar and wages stagnate. And so far as the top 1% of individual or household taxpayers is concerned, their average, total effective tax rate (depending on the source) ranges from 23% to 29%, down roughly 10 points from the mid-1990′s.

    • TomK_in_Boston

      That’s how every discussion of tax policy should start! It’s hard to believe the voters would swallow the endless parroting of the need for more tax cuts if they knew that we were already in a very low-tax environment. Obviously, all the tax cutting has not helped the middle class, so why not reverse course?

      The voodoo econ lies are endless. They will even reference the JFK tax cuts, as if cutting high taxes was somehow the same as cutting low taxes even more. Sadly, a lot of the citizens are easily duped.

  • Gregg Smith

    Here are the companies who pay the most in taxes, we should thank them.

    http://www.usatoday.com/story/money/personalfinance/2013/03/17/companies-paying-highest-income-taxes/1991313/

    • WorriedfortheCountry

      Wait a second.  I thought those evil oil companies got those tax breaks Obama is trying to close.  So why do they top the list?

      Also, I didn’t see GE on the list.

    • StilllHere

      Does this include all of the other taxes they pay, like payroll, state, local, sales, foreign…?

      • Gregg Smith

        The best I can tell, no.

    • hennorama

      Gregg Smith’s pretzel logic Part 3 – Smith’s continued inability to meet the standards he sets for others:

      [Smith] “… why would you trust the word of this man enough to attempt to give credence to [his] comment without checking it out?”

      Did Smith “check it out” before posting this?:
      “[Gregg Smith]
      Here are the companies who pay the most in taxes, we should thank them.
      http://www.usatoday.com/story/money/personalfinance/2013/03/17/companies-paying-highest-income-taxes/1991313/

      One must assume the answer is NO.  This article’s author begins by setting the topic as Federal corporate income taxes, by saying

      “There has been a bruising battle over how much America’s largest corporations should pay in taxes, especially as the size of the federal budget deficit grows. While on paper the federal corporate tax rate is 35%, companies usually pay far less than that because of loopholes and subsidies.”

      “That has caused some activists to say that companies should pay the full rate regardless of special accounting charges, or if some revenue is earned overseas. Still, several huge American companies pay the 35% rate, and because of their size, the amount is well into the billions of dollars.”

      The author then goes on to list “the companies paying the most in taxes”.  Does the author tell the reader that this list is NOT the list of what the companies paid in FEDERAL CORPORATE INCOME TAXES, which is what he started off discussing?  No, he does not.  This is absolutely deceptive and dishonest.  One could call it a journalist lie, were one to choose harsher terminology.

      Let’s look only at ExxonMobil, which the author has at #1.  Quoting the author:

      “Large multinational oil companies have been among the largest payers of corporate federal taxes for years. Exxon’s (XOM) income tax amount was approximately the same in 2011 as it was in 2012 — $31 billion.”

      From ExxonMobil’s 2011 Financial Statements andSupplemental Information, page 57:

      Income tax expense    U.S.    Non-U.S.   Total (millions of dollars)

      Federal and non-U.S.

      Current $                 $1,547   $28,849  $ 30,396
      Deferred – net           1,577      (1,417)        160
      U.S. tax on non-U.S. operations      15           –               15

      Total federal and non-U.S.             3,139     27,432     30,571

      State                            480           –             480
      Total income taxexpense                    3,619     27,432     31,051

      http://www.exxonmobil.com/Corporate/Files/news_pub_ir_finstmts2011.pdf

      So, what did ExxonMobil actually pay to the US government in 2011?  $3.139 billion.

      NOT EVEN CLOSE to the author’s figures.  The author combined ALL Federal, State and Non-U.S. taxes as if they were what he described as “corporate federal taxes”. 

      88.34% of this total were “Non-U.S.” taxes!

      So – Smith,  “why would you trust the word of this man enough to attempt to give credence to [his] comment without checking it out?”

      • WorriedfortheCountry

         Exxon-Mobil pays more in taxes than the statutory rate (42%).  But let’s go after them anyhow because they are clearly the boogie man.  And please leave GE alone because their CEO has decided to support Obama– they shouldn’t pay any taxes.

        http://www.forbes.com/sites/christopherhelman/2012/04/16/which-megacorps-pay-megataxes/

        • hennorama

          WorriedfortheCountry – Ty for your response. I respect your views.

          I hope you’re not saying that, regarding ExxonMobil, I’m somehow “go[ing] after them … because they are clearly the boogie man.”

          Far from it. ExxonMobil is free to make as much money as they possibly can, and to pay as low an amount in taxes as they legally can.

          HOWEVER, ExxonMobil did not pay anything close to 35% (or the 42% figure you cite) of their profits TO THE U.S.

          The figures you, ExxonMobil, the author of the Forbes.com article, and the author of the USAToday.com article throw around, are ExxonMobil’s TOTAL WORLDWIDE effective tax rate, not what they actually paid to the US government.

          Repeating, in 2011, ExxonMobil actually deducted only $3.139 billion of FEDERAL corporate income taxes. This included $1.547 B in current taxes, $1.577 B in DEFERRED taxes, and $15 million in US tax on non-U.S. operations.

          BTW, this means they actually only PAID OUT $1.562 Billion to the US for tax year 2011. If we used only that figure, then ExxonMobil paid 2.13% of their worldwide profits in current US federal income taxes for tax year 2011.

          It’s all perfectly legal. But it nothing close to the impression one gets from the various sources cited.

          Don’t be fooled. Read the financial statement from ExxonMobil. It’s all there. On page 57 of the following link, first column, the fourth figure down, shows the number “3,139″. This is the U.S. portion of what ExxonMobil lists as “Total federal and non-U.S.” income tax expense.

          http://www.exxonmobil.com/Corporate/Files/news_pub_ir_finstmts2011.pdf

          • WorriedfortheCountry

             hennorama,  I understand the distinctions  you highlighted with foreign taxes. Thank you for pointing it out.  However, as the Forbes author noted, Obama wants to treat the oil companies differently than every other corporation — why — because they are the evil oil companies.  IF Obama wants to propose tax reform that eliminates the deduction for foreign taxes  then he needs to propose it and then defend it against the negative consequences.  It is wrong to single out one industry.  The irony is he implies that the oil industry gets a ‘special’ tax break but what Obama really is proposing is giving the oil industry a special tax.  It is deceit of the highest order — even if it might be good politics because of the ignorance of most citizens.

            My primary issue is Obama isn’t proposing holistic pro-growth tax reform.  Instead he is campaigning for eliminating one off deductions to pay for expanded government.  IMHO, that is not what we need right now.

            IF we want more revenues from the oil companies we need to open up more leases on Federal lands and waters and make sure we are getting aggressive royalties paid to the treasury for those leases.

          • hennorama

            WorriedfortheCountry – Thank you again for your thoughtful response. I appreciate and respect your views.

            As I said, I have no problem with ExxonMobil or any other company making as much money as they legally are able to, and to pay the lowest possible legal tax liability. I have no problem with companies offsetting their US taxes by the taxes they paid on the income they earned overseas. That’s just business, and it’s all perfectly legal.

            My point is that it’s disingenuous to claim some enormous amount of tax payments or high effective tax rate without pointing out the small amount of said tax payments or effective tax rate that is actually being paid into the U.S. Treasury.

            I’ll spare you further details on just how small those numbers are, since you indicate that you understand the point.

            I agree that singling out a specific industry for “tax reform” is not the best way to proceed. In the same way, it’s not the best idea, generally speaking, to give specific industries special tax breaks.

            Generally speaking, the large integrated oil & gas companies are already limited in their ability to take advantage of special oil & gas provisions in the Federal tax code. Most of these special provisions are now mostly used by smaller independent producers and royalty owners (who are often the landowners of the drilling and production sites).

            And certainly any revision of the treatment of foreign profits should apply to all businesses with foreign operations, and not just any particular industry.

            This is a repeat of part of a reply to you from last October: (for the full reply go to:

            http://onpoint.wbur.org/2012/10/10/a-global-recession#comment-678732083)

            [Corporations, especially multinationals, are doing just fine. They pay less than 8% of total Federal revenues, even as they've had record profits.

            These super-large businesses can shift their operations fairly easily and quickly, so they play various tax authorities against each other, holding jobs and operations and tax revenues hostage in order to get the best tax deal.

            As it stands now, they don't even have to pay US taxes on non-repatriated foreign profits. So now, during this economic recovery, they are trying to get an even BETTER deal, pushing for a one-time tax holiday for repatriated foreign profits. One big problem - it doesn't result in much in the way of new jobs or investment, as a study of the well-documented failure of the 2004 holiday shows:

            "Higher levels of repatriations . . . were not associated with increased domestic capital expenditures, domestic employment, or research and development expenditures. . . . Even firms that increased contributions to Congressmen responsible for drafting the [repatriation provisions of the American Jobs Creation Act of 2004] and that belonged to a lobbying coalition that asserted that the tax holiday would allow them to increase domestic investment did not significantly increase their domestic expenditures. [Dhammika Dharmapala, C. Fritz Foley, and Kristin Forbes, "Watch What I Do, Not What I Say: The Unintended Consequences of the Homeland Investment Act," Journal of Finance, June 2011.]“]

            Source:http://www.taxanalysts.com/www/features.nsf/Articles/5FA661506CD7982F85257A320069A85F?OpenDocument ]

            Thanks again for your thoughtful response.

      • Gregg Smith

        I have never met Napoleon but I plan to find the time.

        • Bruce94

           Kudos to Henn for finding the time to answer the specious arguments and unsubstantiated claims that corporate elitists and their supply-side snake oil salesmen continue to spread. 

          • Gregg Smith

            I wrote: “Here are the companies who pay the most in taxes, we should thank them.”

            I then provided a link. What I said was true. Henna (as is typical and not with her alone) writes a book to criticize me for what she thinks I meant instead of what I actually wrote. That’s fine but it doesn’t deserve a serious response. 

      • Bruce94

        Thanks, Henn, for the above public service announcement once again demonstrating that when promoters of corporate elitism and supply-side snake oil start talking taxes, it’s always wise to hold onto to your wallet and grab your shovel in order to excavate their sources and remove the excrement they’ve thrown on the wall in the vain hope that some of it will stick.  

        • hennorama

          Bruce94 -TY for your kind words. It’s easy to find people who are unable to conform to standards they set for others, or to the standards of their profession.

          Pointing this out can be a full-time vocation or avocation. That’s not my goal. I simply try to make a small contribution.

          TY again for your kind words.

        • Gregg Smith

          As you demonize big oil, consider this. Exxon’s U.S. profits comprise about 3% of their overall profit. Of that, they make about 2 cents for every gallon of gas sold in America. The government makes anywhere from 40 to 60 cents per gallon. 

          • Bruce94

             ”The government makes anywhere from 40 to 60 cents per gallon.”  Which govt.?  Fed., State or Local? Or are you taking the API average?  Since you start the comment citing  total “US profits,” it would seem logical to apply the Fed. tax rate, which is by no means 40 to 60 cents per gal.  According to Wikipedia, it’s 18.4 cents per gal, and hasn’t been raised since 1993! 

            Before you leap to the irrational conclusion that I and others are demonizing the super rich and some of these enormously profitable behemoths by suggesting they could contribute a little more in taxes, please consider the actual costs of gas production that are borne by all of us when you factor in the externalities that govt., esp. at the national level, pays for or mitigates including the health and other effects of air pollution, infrastructure requirements around production and refining facilities, and security issues around maintaining access to overseas markets and reserves (i.e. our use of or ability to use military power to guarantee access).

             

          • Gregg Smith
  • http://www.facebook.com/futo.buddy Futo Buddy

    i wish i had some forign subsidiaries so i could reduce my tax burden like the big companies do

    • Ray in VT

      Those offshore subsidiaries aren’t just for evading taxes anymore.  You can use them to try to get around sanctions against doing business in some countries.  Just FYI in case you’re looking to diversify.

  • Sy2502

    With all the companies moving to Asia, I really don’t see how raising corporate taxes is going to help. 

  • http://www.facebook.com/profile.php?id=1014120784 Aria Littlhous

    Progressive & Flat: Cut the Fat, Tax the Cats. Why hasn’t the craving for simplicity that drove the sequester hit the discussion on the tax code? Isn’t anyone suggesting anything big, radical and simple?

  • http://www.facebook.com/jyldyz.djumalieva Jyldyz Djumalieva

    We should post publicly the amounts of tax paid by the corporations compared to their profits. UK consumers are now boycotting Amazon.uk after learning that Amazon paid 0% tax in the country. Maybe this will put a pressure on corporations.

    • Gregg Smith

      I posted the top 10 a few comments below.

    • hennorama

      Jyldyz Djumalieva – this website is along the lines of what you are talking about.  This site lists the S&P 500 companies “sorted by U.S. Tax Rate Paid” per their definition.  They use these definitions and ratios:
      Income = Pre-tax earnings in $ million
      U.S. Tax Rate Paid = Current portion of Federal taxes / Pre-tax earnings
      Effective Tax Rate = All taxes declared (Current & Deferred, Domestic & Foreign) / Pre-tax earnings”

      Their complete list is here:

      http://www.nerdwallet.com/blog/investing/tax-rate-paid/

      They also have more info on a company-by-company level here.  You need to scroll down below the chart to find the company-by-company dropdown menu.  Apple Inc. is preselected:

      http://www.nerdwallet.com/investing/corporate-taxes/

      Note to those who believe anyone posting a link and/or posting accurate quotes of online articles means one is “taking [its] word” and/or “swear[ing] by an article”:

      I make no claim as to the veracity or accuracy of anything contained in posted links and/or accurate direct quotations.  The reader is free to make their own judgments as to the veracity and accuracy of the words of the actual authors of said information.

  • The_Truth_Seeker

    They also lobbied for and got BIG (very favorable) changes to our 240 year patent laws – pretty much putting the “little troublemakers” (translation: independent inventors and start-ups) out of business! As usual for such new self-serving acts, it’s called (euphemistically) the “America Invents Act”, AIA. Right now, America is 18th in the world in terms of upward mobility – within 5 years we will be 20th and within 10 years we will be 25th (thanks, in part, to the AIA making harder than ever for the little guy to compete)!

  • Erica Wisner

    Why is it legal to pay Congressmen or any government official to favor special interests?  In any other former colonial nation, this would be condemned as bribery and corruption.  Free speech and bribery are very different things.  I don’t understand why even ‘transparent’ corruption is acceptable.

  • http://www.facebook.com/profile.php?id=540755592 Lilly Inverse

    So let me get this straight… We’ve got an unemployment rate of about 8% of the population of the United States. We’ve got a looming debt, and we’ve got these companies getting HUGE tax breaks via loopholes, claiming they’re making jobs, and then laying off people in the US and closing up shops instead.

    I propose we make a new governmental bureu (which will create jobs!) whose goal is to keep companies honest! They would need to go through each company with a fine toothed comb and MAKE SURE they don’t get any of these unnecessary tax breaks without holding up their end of the deal, and give them the power to fine the businesses who DO get these breaks.

  • JOEYBUSDRIVER

    Do you know where the word lobby comes from?    The Willard Hotel Lobby.

    • hennorama

      Not so much.

      According to Jesse Sheidlower, editor-at-large for the Oxford English Dictionary. in an NPR Weekend EWdition Sunday show from 2006:

      “SHEIDLOWER: Well, lobby originally, in the political sense, referred to one of the lobbies in the House of Commons. And you can find examples of this — the OED cites examples back to 1640, talking about this specifically as the place where the public could go to speak to their members of the House of Commons.”

      http://www.npr.org/templates/story/story.php?storyId=5167187

    • JOEYBUSDRIVER

      Members of congress stayed at the Willard Hotel years ago.  Lobby  people would wait in the LOBBY  to meet them.

  • Gregg Smith

    Fisker, an electric car manufacturer (big corporation) didn’t just get a tax break, they got $193 million from taxpayers. Hopes were high, they revamped a factory in Delaware, there would be jobs. But they ended up going to Finland… on our dime. Then the cars started catching fire because of batteries made by A123 which was yet another taxpayer funded company. Now the CEO has resigned and they are about to go under leaving taxpayers on the hook. It’s all a debacle.

    I share the outrage over giving tax breaks to big “corporations”.

    • WorriedfortheCountry

       What could go wrong with the government picking winners?  I guess there is a first for everything.

      • Gregg Smith

        … or picking losers.

    • hennorama

      Wow.  About $0.63 per person.  What a debacle.

      This is like Dr. Evil proposing to “hold the world ransom for one MILLION dollars.” 

      http://www.youtube.com/watch?v=EJR1H5tf5wE

      • pete18

         Oh, then I guess it must be OK. Continue to misspend taxpayer’s money Congress.

        • Gregg Smith

          It seems so.

        • hennorama

          pete18 – TY for your response.

          I anticipated someone mischaracterizing my words, but I expected it to be the poster who has no perspective on the term “debacle”, and who can neither understand the meaning of the noun “distribution” nor discern the difference between the words “community” and “communism”.

          • Gregg Smith

            Mischaracterizing YOUR words?!

            There’s the pot calling the kettle African-American. Try to get me out of your head.

            And BTW, I don’t see much (if any) reference to the word “distribution”. But I see is “distributed” all the time which is a verb. Just saying.

    • ExcellentNews

      Finland ?! A horrible communist anti-free-market regime where the rich pay 90% marginal tax rate, people are educated and vote for their own interests, and workers have 9 week vacation and 2-year maternity leave ??? 

      Nah, we US taxpayers should pay only for subsidies to TRUE-BLOOD AMERICAN companies, meaning those who have a cenury-old polluting processes, who bust unions, sponsor NASCAR, and pay nine-digit CEO bonuses when the company goes downhill…

    • RaiseMoreHell

      It is entirely appropriate for US policy to favor new green industries. The glorious “invisible hand” especially when combined with multi-billion dollar ad budgets and manufactured desire and consent will poison and drown the entire planet. An extra $193 million in the U.S. Treasury won’t help a built. Our current economic system (in its entirety, a branch of politics, just as lobbying) has enriched despoilers and death merchants. Time to change the game. 

      This try didn’t work? Waaaaah! We’ll try again, the concept is good. And real value was produced, patents, experience, even finding out what doesn’t work. Workers fed their families for a time. We waste more every day on unnecessary weapons systems, propping up industrial corn by making ethanol out of it, and numerous other ways than the entire cost you decry here. The money spent on Fisker created more economic activity in the U.S. than all the tax cuts for billionaires put together. And it was a far smaller amount of money.

  • sjw81

    this is why we are not free and not a true democracy or capitalistic society. we are like russia, just some oligarths running our economy for thier own benefit. screwing us all over in the middle class while the one percent at top can afford luxury, or even college!

  • Vincekal

    Why was no mention made of the fact that congressman Fred Upton (R) MI, is an heir to the Whirlpool fortune?!?

  • Pingback: The Case For Compassionate Capitalism | Cognoscenti

  • ExcellentNews

    If only we had elected Mittens Willard, he would have shut down NPR. Then, you peons would not be hearing news about how Whirlpool got taxpayer subsidies for exporting American jobs to Mexico. What you don’t know can’t hurt you, right?

  • RaiseMoreHell

    Nothing new. Tom Ferguson’s ”Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Politics” described this pretty well back in 1995. The problem is stopping the business elites before they’ve extracted every bit of wealth the working class accumulated from the New Deal.

  • Pingback: All Carrot, No Stick: Rethinking Corporate Tax Breaks | Cognoscenti

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Apr 24, 2014
Senate President Pro Tem Darrell Steinberg, D-Sacramento, left, talks with Sen. Ed Hernandez, D-Covina at the Capitol in Sacramento, Calif., Monday, April 21, 2014. Hernandez proposed a constitutional amendment that would ask voters to again allow public colleges to use race and ethnicity when considering college applicants. The proposal stalled this year after backlash from Asian Americans. (AP)

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