Friday, May 24, 2013

Apple CEO, Just doing his Job?

"The link between the profitability of American companies and the well-being of America is broken." - Jared Bernstein, regarding the Senate hearing on Apple and tax avoidance.

When people like Jared Bernstein (former economic advisor to Joe Biden) and others say that the corporate executives of Apple are only doing their jobs, increasing share value for their stockholders, it should be noted that their largest stockholders are mostly huge institutional investors (banks, private equity firms, and hedge funds) who buy and sell huge blocks of stocks (in the millions of shares).

And the senior execs (with their stock options) are usually the next largest shareholders, so they are working for themselves (incentive pay). Also, these same corporate executives often sit on each others board of directors in other companies. So again, they are working to increase share value for themselves (e.g. stock buy backs, etc.)

The third largest group of shareholders are the private traders who are generally wealthy to begin with. Most people in the lower income brackets don't own stock, and if they do, it's through a pension, 401k, or an IRA retirement account --- who pay tax at ordinary tax rates according to their income bracket --- and pays a penalty for early withdrawal --- they don't get the preferential capital gains rate that the execs get, nor do they have all the loopholes that these huge corporations enjoy.

Under "investor relations" on their corporate websites, these big corporations boast of low "effective tax rates" as a selling point to enlist new investors. Beating the government (aka "the tax man" aka the American people) is seen as a "positive", not creating jobs, improving our infrastructure, or funding public schools. These multinationals have no borders or any particular patriotic loyally, except they rely on our laws, courts, police and military to protect them and their business interests, both here and abroad. They would have men and women in our Armed Forces die for them, but won't give the survivors jobs paying a living wage when they return home.

And it's not just companies in the technology industry that are avoiding taxes and treating the American people and government like this, other companies, such as those in the apparel industry (like Nike) also does; and they all use exploited labor in Asian countries to displace American workers --- to also avoid safety and other regulatory laws.

It's our government leaders that, for years, has allowed this happen. We have over 74,000 pages in the IRS tax code that are mostly corporate tax loopholes. For ordinary Americans, 50% of the work force nets less that $27,000 a year, and uses a one-page 1040EZ form to file their tax returns; whereas people like Mitt Romney files a 500-page tax return and deducts $25,000 a year for the maintenance of a horse as a medical expense, because it "makes his wife feel better".

The entire system is rigged for the big businesses, big banks and the most wealthy; because with their financial influence, they have rigged our politicians to write the laws that are most favorable to them.

And then when we become unemployed (or are forced into low-paying jobs without healthcare or retirement benefits) and need to rely on government assistance, they claim that they owe us NOTHING, but yet they seem to think that we owe them EVERYTHING.

The 400 richest people in America are wealthier than the combined total of the bottom 189,000,000 Americans. These 400 individuals are the 1% of the 1% of the 1% — and you can fit them all on one Boeing 747 commercial jet (see the video below).

Just 20 of those people have a net worth of over ½ trillion dollars. Imagine the dimensions of a football field stacked 5 feet high with $100 dollar-bills. That's $500 billion dollars. 20 people could buy 2,000 Boeing 747s.

These are the people who most influence our politics and government leaders. Then our politicians write the tax, labor, consumer and regulatory laws that are most favorable to them. The whole system is rigged from the top down.

Companies such as Apple are rotten to the core.

2 comments:

  1. Watch "Wealth Inequality in America - A Dramatic Video" at YouTube

    http://www.youtube.com/watch?v=4DbkPBKtCss

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  2. Corporate tax contributions have shrunk in the past several decades, and our personal taxes have risen to fill the gap. Payroll taxes now make up 35 percent of all federal government tax receipts, up from 11 percent in 1950. Corporate income taxes, meanwhile, now make up less than 10 percent of federal revenue, down from about 26 percent in 1950. Read the full article at the Huffington Post regarding Apple and corporate tax dodgers --- and it's all legal, our government allows for this.

    http://www.huffingtonpost.com/2013/05/22/chart-shows-corp-taxes-grossly-unfair_n_3321737.html

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