Giant Corporations Scam Tax Refunds
Economics
professor and former Secretary of Labor Robert Reich notes:
Many millionaires pay a lower federal tax
rate than many middle-class Americans.
Some don’t pay any federal taxes at all.
***
Some also take advantage of tax loopholes that
let them park some of their earnings in offshore tax havens like the
Bahamas or the Netherlands Antilles.
***
Put these all together and you see why Warren
Buffet, the second richest person in America, pays a lower tax rate
than his secretary, as he readily admits.
State and local taxes are even more regressive.
The poorest fifth of Americans pay an average state and local tax
rate of over 11 percent, while the richest fifth pay only 5.6
percent. This isn’t small change. State and local taxes account for
about 40 percent of all government revenues.
Pulitzer prize winning reporter David Cay
Johnston reports that – in 16 states – giant companies pocket
your “state income taxes”.
This
includes foreign corporations.
Workers
are never informed that their “state income taxes” are being
pocketed. And states often refuse
to make this information public, claiming that it is “proprietary
information”.
In
addition, big companies use a
variety of international scams to avoid taxes:
The Washington Post notes:
About two-thirds of corporations operating in
the United States did not pay taxes annually from 1998 to 2005,
according to a new report scheduled to be made public today from the
U.S. Government Accountability Office…
In 2005, about 28 percent of large corporations
paid no taxes…
Dorgan and Sen. Carl M. Levin (D-Mich.)
requested the report out of concern that some corporations were using
“transfer pricing” to reduce their tax bills. The practice allows
multi-national companies to transfer goods and assets between
internal divisions so they can record income in a jurisdiction with
low tax rates…
[Senator] Levin said: “This report makes
clear that too many corporations are using tax trickery to send their
profits overseas and avoid paying their fair share in the United
States.”
Indeed, as … Johnston documents, American
multinationals pay much less in taxes than they should because they
use a widespread variety of tax-avoidance scams and schemes,
including:
Selling valuable assets of the American companies to foreign subsidiaries based in tax havens for next to nothing, so that those valuable assets can be taxed at much lower foreign rates
Pretending that costs were spent in the United States, so that the companies can count them as costs or deductions in the U.S. and pay less taxes to the American government
Booking profits as if they occurred in the subsidiary’s tax haven countries, so that taxes paid on profits are at the much lower safe haven rate
Working out sweetheart deals with certain foreign governments, so that the companies can pretend they paid more in foreign taxes than they actually did, to obtain higher U.S. tax credits than are warranted
Pretending they are headquartered in tax havens like Bermuda, the Cayman Islands or Panama, so that they can enjoy all of the benefits of actually being based in America (including the use of American law and the court system, listing on the Dow, etc.), with the tax benefits associated with having a principal address in a sunny tax haven.
And myriad other scams
And see
this.
Indeed,
some of the world’s biggest companies not only dodge all taxes,
they actually enjoy a negative tax rate … where they are paid
money by the U.S. government, just like the illegal immigrants
discussed above.
The World’s Richest Hide $31 Trillion Dollars to Avoid Taxes
A new report from the former chief economist at
the prestigious McKinsey firm – an expert on tax havens –
concludes that
The
Guardian notes:
A global super-rich elite has exploited gaps in
cross-border tax rules to hide an extraordinary £13 trillion ($21tn)
of wealth offshore – as much as the American and Japanese GDPs put
together ….
James
Henry, former chief economist at consultancy McKinsey and an expert
on tax havens, has compiled the most detailed estimates yet of the
size of the offshore economy in a new report, The
Price of Offshore Revisited, released exclusively to
the Observer.
He shows that at least £13tn – perhaps up to
£20tn [i.e. $31 trillion dollars] – has leaked out of scores of
countries into secretive jurisdictions such as Switzerland and the
Cayman Islands with the help of private banks, which vie to attract
the assets of so-called high net-worth individuals. Their wealth is,
as Henry puts it, “protected by a highly paid, industrious bevy of
professional enablers in the private banking, legal, accounting and
investment industries taking advantage of the increasingly
borderless, frictionless global economy”.
***
The
detailed analysis in the report, compiled using data from a range of
sources, including the Bank of International Settlements and the
International Monetary Fund, suggests that for many developing
countries the cumulative value of the capital that has flowed out of
their economies since the 1970s would be more
than enough to pay off their debts to the rest of the world.
***
“The
problem here is that the assets of these countries are held by a
small number of wealthy individuals while the debts
are shouldered by the ordinary people of these countries through
their governments,”
the report says.
The sheer
size of the cash pile sitting out of reach of tax authorities is so
great that it suggests standard
measures of inequality radically underestimate the true gap between
rich and poor.
According to Henry’s calculations, £6.3tn of assets is owned by
only 92,000 people, or 0.001% of the world’s population – a tiny
class of the mega-rich who have more in common with each other than
those at the bottom of the income scale in their own societies.
“These
estimates reveal a staggering failure: inequality
is much, much worse than official statistics show,
but politicians are still relying on trickle-down to transfer wealth
to poorer people,” said John Christensen of the Tax Justice
Network. “People on the street have no illusions about how unfair
the situation has become.” [Remember that rampant
inequality destroys
economies. And conservatives
or liberals are both offended by it.]
Al
Jazeera reports:
Rich individuals and their families have as
much as $32 trillion of hidden financial assets in offshore tax
havens, representing up to $280bn in lost income tax revenues,
according to research published on Sunday.
The study estimating the extent of global
private financial wealth held in offshore accounts – excluding
non-financial assets such as real estate, gold, yachts and racehorses
– puts the sum at between $21 and $32 trillion.
***
John Christensen of the Tax Justice Network
told Al Jazeera that he was shocked by “the sheer scale of the
figures”.
“What’s shocking is that some of the
world’s biggest banks are up to their eyeballs in helping their
clients evade taxes and shift their wealth offshore,” said
Christensen.
“We’re talking about very big, well-known
brands – HSBC, Citigroup, Bank of America, UBS, Credit Suisse –
some of the world’s biggest banks are involved… and they do it
knowing fully well that their clients, more often than not, are
evading and avoiding taxes.”
Much
of this activity,
Christensen added, was
illegal.
***
The research estimates that since the 1970s,
the richest citizens of these 139 countries had amassed $7.3 to $9.3
trillion of “unrecorded offshore wealth” by 2010.
Private wealth held offshore represents “a
huge black hole in the world economy,” Henry said in a statement.
Either Eliminate Taxes – Or Tax Fairly – But Don’t Allow Fraud to Rob the Middle Class Blind
Some
say that we could eliminate all taxes if we take away from the big
banks the monopoly power to create credit, so that the
government doesn’t have to pay trillions on interest for
that credit.
Some
say that income taxes are illegal, because they were never
ratified by the states.
Some
say that – since more
than half of all government discretionary spending goes
to imperial
wars of adventure and most of the rest is thrown
at the big banks so they can keep
ripping us off – paying taxes is just propping up a
destructive system.
Others
– including
some leading conservatives – say that the problem is that
the wealthiest haven’t been forced to pay their fair share of
taxes.
We’re not weighing in one way or the other.
But one thing is for sure: either no one should pay taxes, or we
should all – illegal immigrants, giant corporations and the
super-rich – be subject to the same rules and pay our fair share.
Soaking
the middle class is unfair, unjust … and unAmerican. Indeed, while
the Boston Tea Party was a revolt against taxation without
representation, it largely centered on the British
government’sdisproportionate
tax breaks towards the East India Company, the giant company which
dominated the tea market and hurt small American business.
Illegal Aliens Scam Tax Refunds
For years, American taxpayers have been
shelling out $4.2 billion dollars per year to pay for a scam.
A
report by the Inspector General found that some 2 million illegal
immigrants have been receiving large tax refunds by pretending that
numerous dependents live with them … when, in fact, most of the
dependents live in Mexico and have never lived
in the United States.
Once whistleblowers called attention to this
problem, their IRS bosses told them to ignore the fraud and look the
other way:
WND notes:
The problem was not
a revelation to the Northern California IRS field-office worker who
viewed the report: “The fraud has been going on for years,” he told WND.
“Business as usual.”“As the video indicates the Service does nothing,” he said, asking WND not use his name to avoid reprisal.(The Federal Reserve has been bailing out foreign banks for years; but we assume that this is not a backdoor bailout for foreign nationals.)
No comments:
Post a Comment