Everybody hates taxes. It can be fairly disheartening to take home a paycheck and see how much of your earnings aren't actually going to you. I understand that.
It can be annoying to have to account for sales tax when buying something, especially anything fairly pricey. I completely agree.
However, we have to suck it up and pay them. Tax money pays for services we enjoy, and, more urgently, the consequences for skipping out on taxes aren't pretty. Unless, of course, you work for a corporation.
Ordinary citizens don't have the luxury of skipping out on taxes. Corporations, on the other hand, seem to play by a different set of rules.
According to CNNMoney.com, a Government Accountability Office (GAO) report released in August of 2008 found “25 percent of U.S. corporations with more than $250 million in assets or $50 million in sales paid no federal income taxes in 2005.”
Unfortunately, this is not an anomaly. Large corporations routinely exploit tax loopholes and use offshore tax havens in order to decrease or completely eliminate their federal tax burden.
According to a GAO report released in December 2008, “83 of the 100 largest publicly traded U.S. Corporations ... reported having subsidiaries in jurisdictions listed as tax havens or financial privacy jurisdictions.”
Having these options on hand is especially handy for corporations like General Electric, which, according to CNNMoney.com, paid absolutely no income taxes to the federal government last year.
Finally, according to a report issued by the non-profit U.S. Public Interest Research Group, “offshore tax havens cost taxpayers revenue totaling as much as $100 billion per year — $1 trillion over 10 years.” This cost “each taxpayer an average of $500 per year.”
Somehow, this seems slightly wrong. Corporations do business in our country and enjoy the services paid for by our tax money. The very least they can do is actually pay their fair share of taxes, especially considering the fact that taxpayers bailed out some of these corporations, such as JPMorgan Chase & Co. (50 tax havens) or Citigroup Inc. (427 tax havens).
All the recent talk about deficit reduction has focused solely on the spending side of the equation. Let us remember the other factor that plays a role in the federal government's financial matters: revenue.
Amid all the proposed spending cuts (which primarily target social programs that benefit lower classes), there should also be a discussion of how to mend this $100-billion-a-year hole. That would certainly help ease the deficit catastrophe that is suddenly so important.
This is a perfect issue for both conservatives and liberals to agree on. While there will be plenty of disagreement on what the corporate tax rate should be (or if there should be one at all), most will agree that corporations shouldn't be allowed to exploit tax loopholes in this way.
Thankfully, protests have already started.
Inspired by a similar movement in Britain, US Uncut, a grassroots organization dedicated to raising public awareness of corporate tax dodging, has begun holding demonstrations to raise awareness of the shady tax practices of Bank of America.
This is a true type of populism, rallying against an issue that demonstrates how corporations get tax lenience that the average citizen will never receive.
Contact Tanner at tjgreene@asu.edu
