Ultra-Rich Betray America
The betrayals come in many forms. Here are a few of the more outrageous, and destructive, examples:
Evasion: Corporations suddenly stopped meeting their tax responsibilities
While corporate profits have doubled to $1.9 trillion in less than ten years, the corporate income tax rate, which for thirty years hovered around the 20-25% level, suddenly dropped to 10% after the recession. It has remained there for three years.
We are seeing a manifestation of the Shock Doctrine. Corporations are using the national emergency of the financial collapse to make a statement about taxes, and a traumatized nation is too preoccupied to do anything about it.
Delusion: Technology companies won't admit that much of their 'innovation' is due to public assistance
According to the report Funding a Revolution, government provided almost half of basic research funds into the 1980s. Federal funding still accounted for half of research in the communications industry as late as 1990. Even today, the federal government supports about 60 percent of the research performed at universities.
Apple's first computer was introduced in the late 1970s. Apple still does most of its product and research development in the United States, with US-educated engineers and computer scientists.
Google's business is based on the Internet, which started as ARPANET, the Defense Department's Advanced Research Projects Agency computer network from the 1960s. The National Science Foundation funded the Digital Library Initiative research at Stanford University that was adopted as the Google model.
Apple got its tax bill down to 9.8% last year. About 2/3 of its profits remain overseas for tax avoidance purposes. Google, like Apple, avoids taxes by moving most of its foreign profits through Ireland and the Netherlands to Bermuda. Both Apple and Google, along with Microsoft and Cisco, are lobbying for a repatriation tax holiday to allow billions of overseas dollars to come home at a greatly reduced tax rate.
An Apple executive said: "We don't have an obligation to solve America's problems." That may be true, but they do have an obligation to pay the taxes that help America solve its problems.
Desertion: The people who benefit most from government are renouncing their citizenships to avoid taxes
Perhaps the ultimate insult to America is to just quit on your country after making a fortune off of it. In 2011 almost 1,800 Americans gave up their citizenship to avoid taxes.
The wealthy benefit disproportionately from property and inheritance laws, contracts, stock exchanges, favorable SEC regulations, the Small Business Administration, patent and copyright and intellectual property laws, estate planning, trust funds, Internet marketing, communications infrastructure, highway maintenance, air traffic control, local and national security, and 60 years of research in technology and other industries.
A recent outrageous example is Facebook part-owner Eduardo Saverin, whose family came to America from Brazil partly for safety reasons, and who happened to land Mark Zuckerberg as a roommate at Harvard. Now after falling into billions, he's decided to renounce his U.S. citizenship to avoid taxes.
Denial: Traders feel it's inappropriate to pay even a tiny tax on a quadrillion dollars in sales
A quadrillion dollars sounds like a fake amount. But it's all too real. That's a thousand trillion dollars of derivatives transactions which, along with the high-frequency computer-generated transactions (5,000 per second) that make up over half of U.S. stock trades, contributed to a financial meltdown and a $3 trillion bailout for reckless trading.
But there's no tax on these transactions.
While average Americans pay a 10% sales tax on necessities, millionaire investors pay just a .00002% SEC fee (2 cents for every thousand dollars) for a financial instrument. And their supporters claim, inexplicably after the disastrous trading frenzy in 2008, that a tax would increase volatility.
Illusion: The media leads us to believe we should all be cheering when the stock market is booming
Conservatives insultingly assure us that the "democratization of stock ownership" is gradually making America more equal, as evidenced by the flattening of wealth ownership among the richest 1% in recent years. So we should all be excited about a rising stock market.
Here are the facts. Data from Edward Wolff confirms that from 1983 to 2007 the percentages of net worth and financial wealth for the top 1% remained steady. But the percentages for the rest of the richest 5% increased by almost 20%, while the percentages for the lowest 80% of the population DECREASED by almost 20%.
In other words, the share of wealth owned by the top 1% leveled off because the "democratization of stock ownership" spread the wealth among just 5% of the population, those earning an average of $500,000 per year. A few people -- 5 out of 100 -- got very rich, but everyone else lost ground.
The issues are difficult to address with Congress largely on the side of the wealthy. At the very least:
(1) Eliminate the tax break on unearned income (capital gains). The richest Americans, who own most of the stocks, should not pay a smaller tax than everyone else.
(2) Implement a small financial transactions tax. It would be easy to administer on computer trades, it would generate hundreds of billions of dollars in revenue, and it would help guard against the reckless speculation that devastated the financial markets and our country.