Main Street is going broke. Wall Street is cashing in.
By Paul Buchheit / AlterNet
December 28, 2014
The Merriam-Webster definition of 'steal' is to take the property of another wrongfully and especially as a habitual or regular practice. Much of our country's new wealth has been regularly taken by individuals or corporations in a wrongful manner, either through nonpayment of taxes or failure to compensate other contributors to their successes.
1. The Corporations
As schools and local governments are going broke around the country, companies who built their businesses with American research and education and technology and infrastructure are paying less in taxes than ever before. Incredibly, over half of U.S. corporate foreign profits are now being held in tax havens, double the share of just twenty years ago. Corporations are stealing from the nation that made them rich.
There are many examples of greed among individual firms. Based largely on 2014 SEC documents submitted by the companies themselves:
- Exxon has almost 80% of its productive oil and gas wells in the U.S. but declared only 17% of its income here. The company used a theoretical tax to account for 83% of last year's income tax bill, and paid less than 2% of its total income in current U.S. taxes.
- Chevron has about 75% of its oil and gas wells and almost 90% of its pipeline mileage in the United States, yet the company claimed only 13% of last year's income in the U.S., and paid almost nothing (less than 1/10 of 1%) in current U.S. taxes.
- Pfizer had 40% of last year's sales in the U.S., but claimed losses in the U.S. and $17 billion in profits overseas.
- Bank of America, despite making 84% of its 2011-2013 revenue in the U.S., declared just 31% of its profits in the United States.
- Citigroup had 43% of its 2011-2013 revenue in North America but declared less than 3% of its profits in the United States.
- Apple still does most of its product and research development in the United States. Yet the company moved $30 billion in profits to an Irish subsidiary with no employees, with loopholes in place to avoid establishing residency in any country. The subsidiary files no returns and pays no taxes. Apple CEO Tim Cook said, "We pay all the taxes we owe."
- Google's business is based on the Internet, the Digital Library Initiative, and the geographical database of the U.S. Census Bureau. Yet the company has gained recognition as one of the world's biggest tax avoiders.
2. The Forbes 40
Defenders of inequality argue that fortunes are deserved because of innovation and hard work. But many of the 40 Americans who own as much as the poorest half of the country have relied on less deserving means of accumulating great fortunes (details here).
- Warren Buffett's company (Berkshire Hathaway) made a $28 billion profit last year, yet claimed a $395 million refund.
- The Koch brothers have taken clean air and water from us.
- The Walton siblings take our tax money to subsidize their employees.
- Larry Ellison was #1 on Sam Pizzigati's Greediest of 2014 list.
The rest of the Top 40 List (details here) is speckled with instances of fraud, tax avoidance, and billionaire subsidies. The worst is probably hedge fund manager John Paulson, who has built a $13 billion fortune after conspiring with Goldman Sachs in 2007 to bundle and bet against sure-to-fail subprime mortgages that took the homes from millions of Americans.
Speaking of hedge fund managers, the carried interest loophole allowed just 25 individuals to take almost $5 billion from society last year by claiming that their income is different from the rest of ours.
3. The Deniers
After 35 years of wealth theft there are still inequality deniers – notably the American Enterprise Institute, which claims that income inequality has been shrinking since 1989, and that we should be asking whether or not the bottom 60% are paying their fair share.
Another insult from The Federalist: Income Inequality Is Good for the Poor.
The Reason Foundation tops it off, advising us that the best way to defuse the situation is to teach tolerance for inequality.
All of which suggests that the theft of society's wealth may be due to ignorance as well as to greed.
Paul Buchheit teaches economic inequality at DePaul University. He is the founder and developer of the websites UsAgainstGreed.org, PayUpNow.org, and RappingHistory.org, and the editor and main author of "American Wars: Illusions and Realities" (Clarity Press). He can be reached at paul@UsAgainstGreed.org.