Why all Major U.S. Corporations Should Move to China

...as well as their CEOs and board of directors. I hear the air in Beijing is lovely at this time of year.

If all the big major American corporations moved to China, they could pay China's tax rates and stop whining about paying U.S. taxes. And then maybe smaller and mid-size domestic businesses can grow and expand - - and hire domestic workers. Hedge funds and private equity firms like The Vanguard Group (with $1.2 trillion in assets) can invest in them.

It's either that, or the larger multi-nationals can just "un-incorporate", because I for one am tired of hearing them, their lobbyists, the Republicans, and their pundits complaining (such as those on Fox News and the Wall Street Journal)

Today the Huffington Post published a good article: Corporate Tax Dodgers Pay To Keep Loopholes Open. "How is it possible that more than two dozen major U.S. companies post enormous profits and pay no taxes? A report released Wednesday offers one possible explanation: In addition to spending nearly $500 million lobbying in a recent three-year period, those companies spread $41 million to the political campaigns of their friends in Congress."

Over a quarter century ago, in 1984, the Washington, D.C.based Citizens for Tax Justice released its first in-depth report on how much America’s top profitable corporations were actually paying in taxes. America’s top companies, this initial study found, were paying an average of only 14.1 percent of their profits in taxes, less than a third of the corporate tax rate then in effect. Read more...

In a Reuters article yesterday: IRS Forms 'SWAT Team' To Crack Down On Corporate Tax Dodgers: "The U.S. Internal Revenue Service is staffing up with high-powered talent to crack down on companies shifting profits from country to country to lower their tax bills." But the Republicans want to cut the IRS's budget, and then claims that high taxes causes tax evasion.

Currently the "statutory" corporate tax rate in 35%. Obama proposes lowering the top marginal corporate tax rate to 28 percent from the current 35 percent. The term “tax rate” can mean the average or "effective" tax rate that is actually paid — as a share of income, or by a broader measure, total federal revenues divided by the gross domestic product.

By this measure, federal taxes are at their lowest level in more than 60 years. The Congressional Budget Office estimated that federal taxes would consume just 14.8 percent of GDP. The last year in which revenues were lower was 1950, according to the Office of Management and Budget.

Bruce Bartlett, who has served as an economic adviser in the White House, the Treasury Department and Congress, says of the current corporate taxes actually paid: "The postwar annual average is about 18.5 percent of G.D.P. Revenues averaged 18.2 percent of G.D.P. during Ronald Reagan’s administration; the lowest percentage during that administration was 17.3 percent of G.D.P. in 1984.

In short, by the broadest measure of the tax rate, the current level is unusually low and has been for some time. Revenues were 14.9 percent of G.D.P. in both 2009 and 2010.

David Leonhardt pointed out "Of the 500 big companies in the well-known Standard & Poor’s stock index, 115 paid a total corporate tax rate—both federal and otherwise—of less than 20 percent over the last five years... Thirty-nine of those companies paid a rate less than 10 percent."

Studies indicate that after tax breaks, the effective corporate tax rate is in fact closer to 25 percent, and one analysis found that nearly 300 major companies paid an average rate of just 18.5 percent between 2008 and 2010. Read more at the Economist.

Yet if one listens to Republicans, one would think that taxes have never been higher, that an excessive tax burden is the most important constraint holding back economic growth and that a big tax cut is exactly what the economy needs to get growing again. Taxes, by all definitions, are actually historically low in ALL categories (top marginal rate for income taxes, capital gains taxes, corporate taxes, inheritance taxes, etc.) Read: How the 1% Bilks the 99%

In June 2011 The Hill reported that the Citizens for Tax Justice said that a dozen major companies had, between them, an average effective tax rate of roughly -1.5 percent between 2008 and 2010 — well below the top marginal corporate rate of 35 percent...and expected the broader analysis of all the Fortune 500 companies would still find an average effective rate of below 15 percent.

Based on "effective" tax rates, pro-big-business Bloomberg plays down these statistics by arguing that "the tax rate for the largest U.S. companies between 2006 and 2009 was 27.7 percent, compared with a non-U.S. average of 19.5 percent. (Note: It was NOT 35%, but more on this later.)

Business lobbying groups also want the U.S. to switch to a territorial tax system, which wouldn’t tax U.S. companies on profits they earn in other countries (the same corporations who lobby for "free trade agreements" and then outsource jobs overseas for cheaper labor).

American Enterprise Institute (a conservative pro-big-business lobbying group) gives a very detailed and comprehensive analysis of their own position, and adds "The Obama administration should lower effective tax rates so the United States can compete in the global economy."

One would not know from this Republican plan that corporate taxes are expected to raise just 1.3 percent of G.D.P. in revenue, about a third of what it was in the 1950s.

The American Enterprise Institute and the Republicans say global competitiveness requires the United States to reduce its corporate tax rate. But the United States actually has the lowest "effective" corporate tax burden of any of the member nations of the Organization for Economic Cooperation and Development.

Revenue Statistics from the O.E.C.D. Member Countries, 2010

If taxes are already historically low, and in comparison with our global competitors, how are Republicans able to maintain that taxes are excessively high? They do so by ignoring the "effective" tax rate and concentrating solely on the "statutory" tax rate, which is often manipulated to make it appear that rates are much higher than they really are.

Stephen Moore (of the Wall Street Journal and a regular guest on Fox News and CNN's Ali Velshi) asserted that Democrats were trying to raise the top income tax rate to 62 percent from 35 percent. But in a Columbia Journalism Review, a commentary called Moore's analysis “deeply disingenuous.” (I have personally caught Stephen Moore in lies and even posted about it.)

But what they and everybody else keeps ignoring is the fact of "cheap labor". Foreign companies paying a lower tax rate AND for cheaper labor have the best of both worlds if they can export their products to the U.S. to maximize their profits. American companies want it both ways.

It's always been a perpetuated lie that regulation and high taxes prevents domestic job creation. It's always been about cheap labor. Apple pays $1 an hour for factory workers and $8 an hour for engineers. Americans can't live on those wages in the U.S. And American companies have been busy for the last 30 years driving down domestic wages. (Read: "Low Wages Kill Jobs, Not High Taxes")

If American corporations kept jobs in America, maybe they could justifiably negotiate for lower corporate tax rates if they weren't paying their CEOs and board-of-directors an average of $11 million every year (the highest in the world), while only paying a 15% tax rate on capital gains* (the lowest in the world) that they earn with their stock-options. (Read: "Are CEOs Ashamed of their Excessive Pay?")

* According to the Center on Budget and Policy Priorities, under a recent, but hypothetical model, regarding the Simpson-Bowles Commission and the Rivlin-Domenici plan that the commission presented in its report, many of the tax code's perks for wealthy individuals would be eliminated. The proposal would end the lower-tax treatment for income from stock dividends and capital gains, which are taxed at a rate of 15 percent instead of rates that can reach 35 percent for ordinary income. More here: "Corporate CEOs Embrace Tax Hike Plans Rejected By Paul Ryan"

Even small business owners are demanding a repeal of the Bush Tax Cuts for the rich. "It’s a common complaint from small business owners. While congressional Republicans and entrenched corporate lobbying groups like the U.S. Chamber of Commerce and the National Federation of Independent Business have been pushing hard to preserve the Bush tax cuts for the wealthy by touting the interests of small firms, much of the small business community is demanding that those very tax cuts be repealed. The tax breaks for the wealthy will add $700 billion to the debt over the next 10 years, according to the White House's Office of Management and Budget. And many small firms say that money would be better spent on direct aid to the middle class.

On Fox News Eric Bolling had said that 96% of the U.S. Chamber of Commerce's members are small businesses. But what he also deliberately failed to mention was that only 11% of all small American businesses actually belongs to the U.S. Chamber of Commerce. More here...

The actual number of business owners who would be affected by Obama's "millionaire tax" turns out to be well under a million, and the number of actual "employers" (those that hire people) would be even less.

But in the mean time, what have these multi-national conglomerates done for American citizens lately, besides just continually raise prices on their goods and services here at home -- year after year -- and sucking up every dollar they can out of American consumers?

They've already shrunk the middle-class by driving wages down. Now we have 50% of all U.S. workers who earn less than $26,364 a year - - and the government says the poverty level for a family of four is $22,350. It was American multi-national corporations (by way of their Republican lapdogs) that created "Obama's Welfare State". Millions of hard-working Americans didn't just wake up one day and decided to go on welfare to live in poverty.

And with so many mergers and acquisitions (monopolies), American consumers are left with fewer and fewer choices to promote competition. Just look at the telecommunications and the cable industry as two of many examples.

These big corporate businesses want to pay next to nothing for taxes and wages, but they also want an arm and a leg for their products and services; and then they reward themselves with massive salaries for their efforts in gouging their customers. Is this the "shared sacrifice" that the American people have heard so much about?

Last year in May 2011 the New York Times reported "By taking advantage of myriad breaks and loopholes that other countries generally do not offer, United States corporations pay only slightly more on average than their counterparts in other industrial countries. And some American corporations use aggressive strategies to pay less — often far less — than their competitors abroad and at home. A Government Accountability Office study released in 2008 found that 55 percent of United States companies paid no federal income taxes during at least one year in a seven-year period it studied.

By most estimates "creative accounting" costs the federal government at least $50 billion a year in lost revenue.

The paradox of the United States tax code — high rates with a bounty of subsidies, shelters and special breaks — has made American multinationals “world leaders in tax avoidance,” according to Edward D. Kleinbard, a professor at the University of Southern California who was head of the Congressional joint committee on taxes. This has profound implications for businesses, the economy and the federal budget.

According to another study, at the high end (what's left of manufacturers) paid 26 percent, financial services companies paid an average of 20 percent, real estate paid 19 percent and mining paid 6 percent. (Currently there is a petition underway in Nevada to raise taxes on silver and gold miners. Gaming taxes in Las Vegas are also one of the lowest in the world.)

The average federal income tax rate on the 400 richest people in America (see the Forbes 400 List) was only 18.11 percent in 2008, according to the Internal Revenue Service, down from 26.38 percent when this data was first calculated in 1992. Among the top 400, 7.5 percent had an average tax rate of less than 10 percent, 25 percent paid between 10 and 15 percent, and 28 percent paid between 15 and 20 percent.

The truth of the matter is that federal taxes in the United States are very low. There is no reason to believe that reducing them further will do anything to raise growth or reduce unemployment.

Obama's tax plan is to cut the highest official tax rate for all corporations to 28 percent from 35 percent (25 percent for manufacturing companies) — without reducing federal revenue. A wide range of economists, and policy makers in both parties, say such a change would distribute the burden of taxation more fairly and reduce the warping influence of the tax code on investment decisions. (Wall Street Journal Debunked on Obama Tax Plan)

The government estimates that corporations spend $40 billion each year figuring out how much they owe in taxes, and considerably more figuring out how to reduce that number, such as hiring an army of tax attorneys, hiring lobbyists, and contributing to political campaigns to influence our elections (see the top all-time donors).

The biggest U.S.-based multi-national corporations will stop at nothing. They are insatiable, they will continue to:

1. Have lobbyists push congress for lower taxes (even lower than 1% if they could)
2. Continue to outsource jobs for cheaper labor (even if it means 99% unemployment in the U.S.)
3. and/or pay ever lower domestic wages (even lower than $1 an hour if it was possible)
4. Lobby for reduced regulations for greater profits (so they have NO restrictions)
5. Keep pushing for more "tort reform" (so if they break laws, can't be punished or sued)
6. Raise costs to their consumers, but giving ever inferior service (even if dog food is all one can afford)
7. Monopolize markets to reduce competition (eventually being one big super-corp and ruling the world)
8. Pay themselves excessively well, year after year (until the top 1% has 99% of all the wealth)

And they will continue to do these things, no matter at what the cost to the human condition, society as a whole, the environment, or at the expense of the country. These companies are now more powerful than countries, and U.S. corporations are moving beyond the national interest.

And so are the jobs. "The top companies seem to exist in a world apart — they are booming, and their executives are prospering. If there is a meta-theme to this year’s World Economic Forum in Davos, it is that the world’s largest companies are moving on and moving ahead of governments and countries that they perceive to be inept and anemic. They are flying above them, operating in a space that is increasingly disconnected from local concerns, and the problems of their home markets. And if the conversations here are any indication, they may soon take over much of what government itself does."

Multi-national corporations are never about "country first" and never will be unless it benefits their bottom line. They don’t perceive the global marketplace and labor force in terms of borders or along political party lines. Their business models and strategies are based on a global economy and has been for many years. Multi-national corporations have adapted to a new paradigm, in fact they created the paradigm.

Read my post: "Paul Ryan's 'New and Improved' Path to Austerity" (There's also a video I made that was dedicated to Paul Ryan and his Republican friends in congress. Read what Robert Reich says about Paul Ryan's plan.)

These huge corporations are sitting on over $3.6 trillion, and they want more tax breaks!!! Does that make any sense? So if their CEOs won't do anything for God and country (our country), or for our citizens, we might as well tax them and their soul-less businesses...it's either that or they and their businesses can just move their greedy asses to the communist People's Republic of China. Who needs them? We get all our TVs and cell phones from China anyway.

My related Posts:

• How the 1% Bilks the 99%
• Investment versus Speculation
• The "SWAG" Economy of the 1%
• For Mitt Romney, the Joke's on Us
• Historical Tax Rates on the Rich (1862 to 2011)
• The Second Gilded Age: History Repeats Itself
• Mellon: The Banker Who Rigged the U.S. Tax Code
• The GOP Tax Plan - Ignorance, Insanity, or Greed?
• We have a Revenue Problem, Not A Spending Problem
• 280 Corporations are "Too Big to Tax"
• Trickle-Down Economics: The Cruel 30-Year Hoax
• You Pay Hidden Entitlements for the Rich
• Record Profits + Record Bonuses = Zero Jobs
• Low Wages Kills Jobs, Not High Taxes
• Trade Agreement Passes in Middle of Job Crisis
• Apple Inc. is Rotten to the Core
• America's Race to the Bottom
• Corporations & Banks Now Sit on $3.6 Trillion
• Who will "Live Free or Die" with FREE MARKETS in 2012?
• China's Greatest Generation and the Chinese Dream

Don't like Corporate Taxes? Then Un-incorporate!

MITT ROMNEY: "One of the reasons why we have a lower tax rate on capital gains is because capital gains are also being taxed at the corporate level. So as businesses earn profits, that’s taxed at 35 percent, then as they distribute those profits as dividends, that’s taxed at 15 percent more. So, all total, the tax rate is really closer to 45 or 50 percent." Mendacious talking point, the first: “double-taxation.” We don’t tax “funds” in this country, we tax transactions. If a company turns a profit on its transactions, it pays taxes on that profit. When it pays money out to investors as dividends, or when investors sell stock at a profit, those transactions are also taxed. No transaction is taxed twice. Mendacious talking point, the second: that 35 percent tax rate. That’s the top corporate tax rate on the books, but because businesses take advantage of all manner of loopholes, the effective rate – what they actually pay — is actually far lower. It’s a classic conservative talking-point that we have the highest corporate tax rate in the world, but the reality is that we collect less in corporate taxes than most developed countries. Studies of some of the biggest companies have shown their effective tax rates to be, on average, less than half of what’s on the books. And the sleight-of-hand: Bain Capital is a Limited Liability Company (LLC). This is what’s known as a “pass-through” structure, meaning that the company pays zero in corporate income taxes – the partners’ shares are taxed as income or losses on their personal returns, and in this case, most of the gains are investment income taxed at 15 percent. In other words, even if we bought the “double-taxation” nonsense and the 35 percent rate, his talking-point still wouldn’t be true.

Mitt Romney (like most of the top 1%) is completely out of touch with middle America. Look at the evidence:

• he bet another candidate $10,000 without a second thought;
• he said $374,000 in speaking fees was "not very much";
• he demolished a $12 million beach-front mansion to build another one 4 times bigger;
• he claimed he was "unemployed" in a ham-handed attempt to identify with the 30 million Americans who can't find work,
• and he said at one time that he too feared getting a "pink slip".

Romney is a caricature of a tin-eared Wall Street exec who refuses to see (or admit to) how the tax system is rigged in his favor, and instead blames all our country's problems on the poor. Mitt's own tax plan would LOWER his tax rate even further. That's just plain nuts!

And why would an American citizen need to keep cash in a Swiss bank or in the Cayman Islands, unless they were breaking the law and evading taxes? I suppose for some people, $259 million just isn't nearly enough.

President Barack Obama used his State of the Union address to call for a new minimum effective tax rate for millionaires and billionaires. "Tax reform should follow the Buffett rule: If you make more than $1 million a year, you should not pay less than 30 percent in taxes," Obama told a joint session of Congress Tuesday night.

"In fact, if you're earning a million dollars a year, you shouldn't get special tax subsidies or deductions. On the other hand, if you make under $250,000 a year, like 98 percent of American families, your taxes shouldn't go up." 

One radical right-wing corporate sympathizer wrote to me today regarding my post on Mitt Romney's taxes, "What kind of socialist rant is this? The tax code specifies that capital gains are taxed at 15%. It should be ZERO! The money has already been taxed. The fact is that some decided to invest their money while others spend it. The problems are not that Washington doesn't have enough revenue, the problem is that they spend too much."

First of all, there is nothing "socialist" about taxing higher wage earners a little more than the poor and middle-class. America has had a progressive tax system for over a century.

That radical right-wing corporate sympathizer was referring to the myth of "double taxation", and was only was spewing the same old Republican and Tea Party propaganda that I had once been indoctrinated with...before I researched the facts and saw the light.

There's no such thing as "double taxation" on corporate executives, and these CEOs and their tax attorneys know very well that's true...they know better than anyone.

My hourly wage is taxed in my paycheck, so then, why should I ever pay another tax on these earnings ever again? My union pension, 401k plan, and my Roth IRA is taxed as "regular income" when I withdrawal funds, so why aren't I allowed to pay a lower tax rate like Mitt Romney? Why should I have to pay any tax at all?

The term "double taxation" was a term that corporations lobbied for in congress to have it included in the U.S. tax code to mislead and confuse common citizens (those who are not engaged in "free market" enterprise) to have it appear as though it was somehow an unfair form of tax on corporate entities.

And the largest corporations have also benefited greatly through crony capitalism, the exact opposite of a true "free market" system, of which the Tea Party claims they totally support.

The profits that are generated from a business that is "incorporated" and publicly traded on the stock market don't go directly into the shareholder's pockets at the end of ever year. They reside in the company's common treasury to be used to operate the business.

Corporate company capital (not personal capital) is used to acquire commodities and services necessary to run the business to churn a profit...or to acquire other companies in mergers and acquisitions. Sometimes profits may be used for research and development when they're not getting it for free from the taxpayers. The profits are taxed before executive pay and dividends are allocated to individuals for their personal use. Corporate capital is being taxed, not personal capital.

A portion of company profits might go into an executive "bonus pool" and/or be allocated for corporate executive's stock options (in lieu of, or in conjunction to, a base cash salary/wage for executive compensation). When they "cash out" financial instruments such as stock options, they pay a 15% tax for capital gains on their stock shares (taxed as personal capital/income).

Company profits also are used to expand operations (capital investment) and can receive tax credits. Company profits also are used to pay it's hourly or salaried employees, who are paid in regular payroll wages. Their employee's wages are taxed for federal income tax and FICA taxes - deducted on behalf of the IRS. And this is also exempt from corporate taxes.

Company profits from corporate income can be used to buy a corporate jet. Personal income that corporate executives earn from capital gains and dividends (acquired through stock options) can also be used to buy a personal private jet.

The corporation is then taxed after all deductions (and tax loopholes), and then pays an "effective" corporate tax rate to the IRS to help pay for all the infrastructure, the courts, and the security that they enjoy for the operation of their business in this country. Businesses don't survive, grow, and prosper in a vacuum -- they need us too.

In 1909 Congress levied a 1% corporate tax on net corporate incomes of more than $5,000.

During the 1950's this tax rate was over 50%, did we then live in a "socialist" country when a Republican and 4-Star General was our sitting president? Google Dwight. D. Eisenhower.

The current maximum tax rate for a U.S. corporation is 35%, but the average "effective" tax rate that's actually paid by the largest U.S. corporations on the Forbes Global 2000 over the past 25 years has averaged about 18% (in China it's 25%).

After corporate taxes, the CEOs are taxed at 15% on their vested stock options (which could be in the millions of dollars, and is their personal income), and they are only taxed at 35% if they receive salaried wages of over $375,000 year (minus their personal deductions). But the middle-class is taxed at 25% on their personal incomes.

You've heard of the AIG CEO getting paid $1 a year for a base salary, because this would have been taxed as "regular income", not at the lower rate as "capital gains" if he was being paid in stocks and earning dividends.

Corporations and LLCs (limited liability companies) are both separate legal entities (business structures) that also enjoy many certain protections under the law, and very important benefits. Most people form a legal business structure to safeguard their personal assets.

Incorporating, or forming a Limited Liability Company (LLC), allows them to conduct their business without worrying that they might lose their home, their car, or their personal savings -- because any business liability, such as a lawsuit for wrong-doing or negligence (Republicans want "tort reform" so corporations can't be sued at all, or only be held accountable with very low caps put in place on any liability).

Corporations and LLCs allow owners (CEOs, shareholders, etc) to separate and protect their personal assets. Owners have also enjoyed limited liability for business debts and obligations. This way bankruptcy and/or "bailouts" work out very well for them whenever they need to restructure burdensome debt or dissolve labor contracts. The CEOs (and shareholders, which are usually one and the same) are exempt from any personal financial risk at all. They have the best of both worlds...less personal risk while enjoying lower personal tax breaks.

Corporations and LLCs also have "perpetual existence" and continue to exist, even if ownership or management changes. (Although, the Republicans and the Supreme Court believe "corporations" are real people.) Sole proprietorships and partnerships usually just end if an owner dies or leaves the business.

Corporations and LLCs also have a lot of tax flexibility. Example: The United States allows a foreign tax credit by which taxes paid to foreign countries can be offset against U.S. tax liability attributable to foreign income.

Though profit and loss typically pass through* an LLC and get reported on the personal income tax returns of owners, an LLC can also elect to be taxed as a corporation. Likewise, a corporation can avoid the so-called  double taxation* of corporate profits and dividends by electing Subchapter S* tax status.

• Deductions - Corporations and LLCs have deductible expenses. They may deduct normal business expenses, like salaries, before they allocate income to owners.
  
• Pass-through taxation - Rather than tax the income of the entity, taxation is "passed through" to the individual shareholders in S Corporations (and LLCs). Income or losses are declared on their individual tax returns.
  
• Double taxation - Double taxation refers to corporate and shareholder taxes. Corporations must pay taxes on their earnings. Individual shareholders must also pay taxes on any dividends they receive.
  
• Stock options:
  • Incentive stock options (ISOs) - Pay for "performance" in which the employee is able to defer taxation until the shares bought with the option are sold. The company does not receive a tax deduction for this type of option.
  • Nonqualified stock options (NSOs) in which the employee must pay income tax on the 'spread' between the value of the stock and the amount paid for the option. The company may receive a tax deduction on the 'spread'.
    
• Subchapter S tax - S corporations are corporations that elect to pass corporate income, losses, deductions and credit through to their shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates. This allows S corporations to avoid double taxation on the corporate income. S corporations are responsible for tax on certain built-in gains and passive income.

To qualify for S corporation status, the corporation must meet the following requirements:

• Be a domestic corporation
• Have only allowable shareholders
  • including individuals, certain trust, and estates and
  • may not include partnerships, corporations or non-resident alien shareholders
• Have no more than 100 shareholders
• Have one class of stock
• Not be an ineligible corporation i.e. certain financial institutions, insurance companies, and domestic international sales corporations.

Small business entrepreneur vs. large corporate CEO

Should a CEO of a big oil company only have to pay a 15% tax rate on a $5 million salary, while the owner of a small business has to pay a 35% tax rate on a salary over $380,000? (And Social Security taxes are capped in each of those cases on their first $110,000 earned...whereas everybody else earning less than $110,000 a year pays Social Security taxes on 100% of their wages.)

A sole proprietor is someone who owns an unincorporated business by himself or herself. However, if you are the sole member of a domestic limited liability company (LLC), you are not a sole proprietor if you elect to treat the LLC as a corporation. Then the owners would pay either a regular income tax or a self-employment tax, based on the current tax brackets for gross income.

How many people do you know that own a mom-and-pop business are "free-market entrepreneurs", live in a mansion, fly to Washington D.C. in a private jet to receive a multi-billion government hand-out, and only have to pay a 15% tax rate on their personal income taxes?

All small business owners that I know pay the 35% tax rate.

I get bored with all those radical right-wing corporate sympathizers that whine and complain without ever presenting any facts. And besides...

...if a corporation no longer wants to pay corporate taxes, then they can just un-incorporate. It's as simple as that.

More posts on Mitt Romney:

• Mitt Romney Comes Clean
• Mitt Romney, the Forbes Fortune 400, and Taxes
• How Mitt Romney & the 1% Evades Taxes
• Mitt Romney - Mister 15% and Platinum Parachutes
• Efficiency expert Mitt Romney: "You're expendable."
• Mitt Romney Knows Envy Better than Anyone
• Mitt Romney Connected to $8.5 billion Ponzi Scheme
• For Mitt Romney, the Joke's on Us
• Mitt Romney was the real-life Gordon Gekko

My related Posts:

• How the 1% Bilks the 99%
• Investment versus Speculation
• The "SWAG" Economy of the 1%
• Mitt Romney Knows Envy Better than Anyone
• Mitt Romney Connected to $8.5 billion Ponzi Scheme
• GOP Claims Tax Evasion as Excuse to Cut Taxes
• For Mitt Romney, the Joke's on Us
• Subsidies for the Rich and Famous
• Historical Tax Rates on the Rich (1862 to 2011)
• The Second Gilded Age: History Repeats Itself
• Mellon: The Banker Who Rigged the U.S. Tax Code
• The GOP Tax Plan - Ignorance, Insanity, or Greed?
• We have a Revenue Problem, Not A Spending Problem
• 280 Corporations are "Too Big to Tax"
• Trickle-Down Economics: The Cruel 30-Year Hoax
• You Pay Hidden Entitlements for the Rich
• Record Profits + Record Bonuses = Zero Jobs
• Low Wages Kills Jobs, Not High Taxes
• Trade Agreement Passes in Middle of Job Crisis
• Apple Inc. is Rotten to the Core
• America's Race to the Bottom
• Corporations & Banks Now Sit on $3.6 Trillion
• Who will "Live Free or Die" with FREE MARKETS in 2012?

Other Related Outside Articles:

• "The richest 1 percent have more financial wealth than the bottom 95 percent combined."
• The total net worth on the Forbes 400 List marks $1.5 Trillion in 2011
• The Global Super-Rich Stash: Now $25 Trillion
• Historical Tax Rates and Time-line
• Capital gains from Citizens for Tax Justice
• 1977 - 2007 tax rates from U.S. Treasury
• Economic Policy Institute on capital gains taxes
• Capital gains explained from U.S. Internal Revenue Service
• The great corporate tax scam

Defending the FedEx Driver

Just before Christmas 2007, package-delivery company FedEx was slammed with a $319 million tax bill. The Internal Revenue Service ruled the company had misclassified about 13,000 drivers as independent contractors when, the IRS said, they really were employees.

Federal Express, whose presence in Washington is as ubiquitous as its delivery trucks, is experienced at exploiting loopholes to evade tax liability. Unlike its main rival UPS, FedEx classifies the men and women who drive its trucks as independent contractors, thereby obviating the company of the obligation to pay employment taxes.

The company is also an expert at avoiding income taxes. When it recently reported $1.9 billion in profits, it used 21 different tax havens to trim its tax liability to less than .0005 percent of its income.

FedEx also spent 42 times (4200%) more on lobbying Congress than they did in taxes. See US Uncut

FedEx’s success in getting favorable tax treatment is due in part to its successful efforts to influence lawmakers with lobbyists on Capitol Hill. The company’s PAC and employees have given $8.7 million in federal campaign contributions over the past ten years, with $797,000 of it going to members of the tax committees in the House and Senate. The company also spent $71 million in lobbying expenditures during that same ten-year period.

What got the IRS and FedEx into a tussle was the package company's assertion that drivers were contractors who operate their delivery routes as independent businesses, even though the drivers use FedEx equipment, wear FedEx uniforms and work under explicit FedEx rules.

The government argued that mis-classification of workers deprives it of billions of dollars of tax revenue annually. The Government Accountability Office has estimated the amount at $4.7 billion a year.

The FedEx bosses argued that a ruling against FedEx would upset precedents that have been in place since the 1990s.

Worker advocates counter that employers have gone too far in pushing taxes and payroll costs onto workers, effectively forcing them to subsidize their bosses.

And UPS drivers get paid more than FedEx drivers - - UPS drivers are Teamsters Union members - - FedEx does not have any union in the company except for its pilots. But if a company will cheat the government on taxes, they'll also cheat their employees.

And does FedEx also over-work their employees?

For years corporate America has been bragging about "increased worker productivity". Companies have kept wages down by doing more with less. They eliminated positions and scaled back on their payroll by delegating extra duties to their workers, and never compensating them for the extra work (Or else they were out-sourced to countries like China for people willing to work for $1 an hour).

The bosses will rarely give you a "thank you" or a warm pat on the back for a job well done, even after piling up the extra work on their employees. Instead, if someone complains, the boss reminds them of how lucky they are to even have a job. Sometimes they'll subtlety threaten them by saying, "Well if you can no longer do the job, we might have to find someone else who can."

Is that what happened to this guy in the video below?

I don't condone the man's behavior but I can certainly understand the frustration of being over-worked and under-paid, just to increase the value of a CEO's stock-options for performance for profits. I think millions of Americans feel this frustration today, and why so few have empathy for the unemployed because of their own personal hells that they're going through on their jobs.

Most of us are under a lot of pressure at work, but we try to handle the pressure, and not to take it out on the customers - - it's unethical and is disrespectful...and could cost us our jobs. And no company wants employees like that. But people are also human, and the young man's actions may have been taken out of context. As far as we know, he otherwise might have been a likeable guy and model employee until this incident was caught on tape.

Maybe there had been a prior altercation...maybe the customer had been rude, demanding, and insulting in the past. We might never know. But even though that in itself doesn't present an excuse for the young man working for FedEx, because maybe he could have simply left the box at the gate (if it was open) and/or rang the bell (if it worked).

And with record deliveries this year, FedEx may have been under-staffed and everyone was working under a great deal of pressure to accomplish their assigned tasks. Especially around the holidays when package volume increases exponentially.

The YouTube user goobie55 who posted the video said that his monitor, not surprisingly, arrived broken and had to be returned. But a well-placed security camera left him with a bit of retribution. After posting the clip, the video quickly went viral, receiving over 5 million views in just five days.

Judging by the wide arched drive-way, the tall iron fence, and the well groomed street, the customer didn't look to be hurting financially, and the monitor was insured and replaced by FedEx; so I consider it to be only a minor inconvenience for the customer when compared to the FedEx driver's livelihood. He may have children to feed.

FedEx's Senior vice president of U.S. operations Matthew Thornton said that FedEx has met with the customer, who has accepted the company’s apology. “This goes directly against all FedEx values,” Thornton said.

Thornton also said that because of employee privacy rules, he cannot disclose what will happen to the deliverer, noting only that he is “not working with customers” at the moment. (I hope he gets off with only a stiff warning.)

If fair wages were paid with more reasonable expectations of what an average human being is capable of doing well, instead of constantly pushing for ever more, there might be less burn-out on the job and more people loving the work they do...and doing it better, with less complaints from everyone.

And maybe people wouldn't go "postal".

It's not Class Warfare - it's just "Business"

It doesn't matter what a corporation pays in taxes as compared to GDP, or how it's compared to any other index of measure (to skew the numbers), it's what they actually pay to the U.S. Treasury after loopholes (aka "deductions") that matters most. And for the last 25 years corporations have actually paid historically low taxes.

While today some corporations may have paid the maximum rate of 35% (when it was over 50% in the 1950s), many others paid ZERO, with the average being only 18%.

The same can be said for their CEOs and other high-income earners. While although the top bracket is also almost historically low (at 35%, when it was once over 90%), what they actually pay is nearer to 15% because the majority of their income is earned through capital gains

And because corporations have been paying a low effective corporate tax rate for decades, that didn't keep them from outsourcing jobs overseas for cheap labor, but rather, it did enable them to pay very excessive CEO salaries...who only mostly pay 15% in federal income taxes on their capital gains.

What makes a grown man cry?

When Congress voted earlier this year on whether or not to end taxpayer-paid entitlements for big oil companies, ConocoPhillips CEO James Mulva (a Republican) cried, saying ending the tax breaks for the big oil companies would be "un-American", then he refused to apologize to the American people.

Republicans (who represent CEOs of large corporations) cry all the time too. When we asked large profitable corporations to pay their fair share of taxes, they cried, "You can't tax us, we're the job creators!" When we asked Fox News millionaires like Bill O'Reilly for a little more, they cried, "If you raise my taxes, I'll have to quit my job!" When we asked that the Bush tax cuts be allowed to expire so that we could balance the national budget, they cried, "That's class warfare!" or "Why do you want to punish the rich for their success?"

When a CEO (or Republican or Fox News commentator) cries about paying too much taxes, they're usually lying. It's almost as though they were all suffering horribly! They're like big cry babies! They're like sniveling rich spoiled brats, the privileged ones, who always feel entitled!

Does taxing these supposed "job creators" really cause unemployment? It seems more likely that by NOT taxing them has caused 30 million people to lose jobs since the Bush tax cuts from 2001 to the present.

America's middle-class peaked in 1979. As of 2010 50% of all American workers earned less than $27,000 a year when the poverty line for a family of four was $22,314. Of the total work force, 16% are unemployed and earned ZERO dollars last year (of those, 50% collected unemployment benefits at some time). The top 1% earns $1 million or more a year.

Because of the many loopholes in the U.S. tax code, on average, for the past 25 years the largest U.S. multi-national corporations and banks have paid a lower effective tax rate in corporate taxes (14% to 18%) than they would have in China (25%).

High taxes is not why U.S. companies outsource jobs, it's because China has very few (if any) environmental regulations and they offer very cheap labor. (Read: America's Race to the Bottom and Apple Inc. is Rotten to the Core)

The effective corporate tax rate has been steadily declining for decades. Corporations paid more than 50% of their profits in federal taxes in the 1950s, 38% in the 1960s, 33% in the 1970s and 25% in the 1980s. All the while, U.S. wages have been stagnant for years - - even as worker productivity has risen.

U.S. corporations are sitting on a huge and growing pile of cash. It just crossed the $2 trillion threshold, according to new Fed data. The Federal Reserve figures don't even include the substantial amount of cash held at many U.S. companies' foreign subsidiaries, which would be subject to taxation if the companies repatriated it.

And they're still bringing up the same old tired argument about "double taxation".

Double taxation is defined as the systematic imposition of two or more taxes on the same income (in the case of income taxes), asset (in the case of capital taxes), or financial transaction (in the case of sales taxes)

The IRS states: "The profit of a corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends. This creates a double tax. The corporation does not get a tax deduction when it distributes dividends to shareholders. Shareholders cannot deduct any loss of the corporation."

Those who argue that capital gains taxes are a "double tax" are just full of crap.

If you work for a corporation and they pay you an hourly wage, is that a tax to them? If a corporation issues stock options to their CEOs in lieu of a cash salary, and after those stocks are sold and taxed as capital gains, is that a "double tax" on the corporation, or just another form of a wage that's paid to an employee from the corporate treasury?

When I get a paycheck, it has federal taxes and FICA deducted. Shouldn't the CEOs also have to pay their share of federal income taxes and FICA from their personal incomes?

Their argument of "double taxation" would be the same as if I took my paycheck and went to buy tires for my car and was charged a federal excise tax; wouldn't that also be a "double tax"? After all, the corporation that paid me an hourly wage also paid corporate taxes and I already paid federal income taxes before I received my paycheck

If I had earned $16.59 an hour ($35,501 a year) in that CEO's factory, I'd be in the 25% tax bracket. The CEO who pays me from the corporate treasury, and also pays himself with stocks options, would only pay 15% in capital gains taxes (and have their Social Security taxes capped).

Corporations have already been paying a declining "effective" corporate tax rate for decades (peaking in the 1950s), just as the CEOs have also been paying a declining capital gains tax rate too...hence, the record profits and record bonuses we've been hearing so much about.

These people NEVER think they earn money, because the greed for wealth is an addiction..."Wealth is like sea water; the more we drink, the thirstier we become." - Schopenhauer

The CEOs are already earning record profits and their corporations have been earning record profits. They've already over-worked us, under-paid us, over-charged us, and out-sourced us while under-paying us in tax revenues. It's time to tax.

A corporation by it's very nature won't go away and die if we tax them and their CEOs more. No matter what we do, they'll always over-work us, under-pay us, over-charge us, and out-source us more in their ever-ending quest for more profits...but at least we can keep them from under-paying their taxes.

Most of the corporate monsters we have today started out small when tax rates were much higher. That didn't inhibit their growth; they grew and grew, gobbling up smaller ones along the way, until they became giants (or "too big to fail"). They almost become an entity onto themselves. CEOs are expendable, and if you chopped off the head of a corporation, another one will grow back to take its place.

But I can sympathize with the people who run these multi-billion-dollar multi-national corporate conglomerates....about as much as they do for me. I'm tired of feeling sorry for the ultra-rich.

And I just hate to see a grown man (or woman) cry. Especially millionaires like Bill O'Reilly, Paul Ryan, Sean Hannity, Eric Cantor, Glenn Beck, Rick Santorum, Rupert Murdoch, the Koch bothers, Paul Rand, Karl Rove, Grover Norquist, Rush Limbaugh, Newt Gingrich, Herman Cain, Mitt Romney, and all the big bankers and CEOs. 

But while they were crying all the way to the bank, I was standing in line waiting for food stamps. So we need to tax them, because if they won't hire and pay people, they can a least pay for their food stamps.

"Class warfare" by ass, it's just "business".

Ronald Reagan Ronald Reagan's first tax bill was enacted in August 1981. It included a sweeping cut in marginal income tax rates, lowering the top rate from 70% to 50% (a whopping 20 percentage points) - and lowered the lowest rate to 11% from 14% (only a stingy 3 percentage points). The House vote was 238 to 195, with 48 Democrats on the winning side and only one Republican with the losers. The Senate vote was 89 to 11, with 37 Democrats voting aye and only one Republican voting nay. Reaganomics had officially begun. Wisconsin Republican Rep. Bill Steiger and Wyoming Republican Sen. Clifford Hansen, were two main sponsors of an important capital gains tax cut in 1978. The highest tax rate on "unearned" (i.e., non-wage or capital gains and dividends) income dropped from 70% to 28%. The corporate tax rate also fell to 34% from 46%. And tax brackets were pushed out, so that taxpayers wouldn't cross the threshold until their incomes were far higher ($379,000). The Wall Street Journal claimed that the highest 1% of income earners paid more in taxes as a share of GDP in 1988 at lower tax rates than they had in 1980 at higher tax rates. To Ronald Reagan, what's been called the Laffer Curve was pure common sense. (There was no increase in the minimum wage over his full eight years in office). Reagan also repealed the excess profits tax on oil companies (Windfall Profits Tax) who are today earning record profits, and like ExxonMobil, are dodging taxes as well. The negotiations for what would become the North American Free Trade Agreement began in Reagan's second term, but it was President Clinton who pushed the agreement through Congress in 1993 over the objections of the unions and many in his own party. (New data now reports that 56,000 factories closed and 8.2 million jobs were lost from 2000 to 2010 due to outsourcing.) President Clinton also signed into law a capital gains tax cut with the Taxpayer Relief Act of 1997 which lowered the top capital gains rate further, from 28% to 20%. Conservatives claim that nothing other than Reaganomics created over 21 million jobs during Reagan's 8-year- term as President. The stock market went through the roof (as though "bubbles" were a good thing), and that low capital gains taxes drove the economy. But little is said about starving the government of necessary revenues are needed to fund Social Security, Medicare, and infrastructure. Only defense spending is considered a priority by the Republicans and corporate America, because "defense" generates profits. Then we had the Bush tax cuts which lowered capital gains taxes further to an historically low 15%, not seen since before 1921 when capital gains were taxed as regular income.

My Related Posts:

• Subsidies for the Rich and Famous
• Historical Tax Rates on the Rich (1862 to 2011)
• The Second Gilded Age: History Repeats Itself
• Mellon: The Banker Who Rigged the U.S. Tax Code
• The GOP Tax Plan - Ignorance, Insanity, or Greed?
• We have a Revenue Problem, Not A Spending Problem
• 280 Corporations are "Too Big to Tax"
• Trickle-Down Economics: The Cruel 30-Year Hoax
• You Pay Hidden Entitlements for the Rich
• Record Profits + Record Bonuses = Zero Jobs
• Mom Pays More Taxes Than Bankers!

Other Related Articles:

• "The richest 1 percent have more financial wealth than the bottom 95 percent combined."
• The total net worth on the Forbes 400 List marks $1.5 Trillion in 2011
• The Global Super-Rich Stash: Now $25 Trillion
• Historical Tax Rates and Time-line
• Capital gains from Citizens for Tax Justice
• 1977 - 2007 tax rates from U.S. Treasury
• Economic Policy Institute on capital gains taxes
• Capital gains explained from U.S. Internal Revenue Service
• The great corporate tax scam
• The top 1% took home 23.5 percent of income in 2007, the largest share since 1928

Click photo to enlarge.

NYC Mayor Michael Bloomberg: "I don't like class warfare."

Mayor Bloomberg, who is worth $20 billion and is #9 on the Forbes 400 list, is deathly afraid of having a class war with people like me - - - someone who subsists of food stamps and had ZERO for an income in all of 2011.

Why is he afraid? Because I have a weapon in my arsenal that can defeat wealthy and powerful people like him. It's called a vote, and I can vote for people who will raise his taxes.

It's the only weapon I have at my disposal that can hurt them the most, by hitting them in their wallet.

Fox News, the Tea Party, and the right-wing accuse people like me of wanting to "fleece" innovative business owners and job creators, and says "the looter class demonizes the wealthy", and they equate fair taxation to socialism. They say "If you punish the wealthy, the risk-takers, the innovators, you kill the goose that lays the golden eggs."

Oh really? The top marginal tax rate during the 1950s was 91% (today they're 35%). During the 1950s corporate taxes were 52% (today they're 35%). And back in the 1950s the capital gains taxes were 25% (today they're 15%). Didn't we innovate and have jobs back then? (READ: America and taxes during the Fabulous Fifties)

I submit, it it THEY and the large corporations who have been doing all the fleecing.

If this were really true, that people like Mayor Bloomberg didn't want a class war, then why is it that the rich have been waging class war on the middle-class and poor for the past 40 years?

Poor people can't wage a class war, they don't have the resources. And they are forced to spend most of their time and energy on just trying to survive. Their only weapon in a class war might be a cardboard protest sign.

But the uber-wealthy, large corporations, and big banks have all the financial resources at their disposal to wage any kind of war they wish, especially if profits are involved. They control everything from the media to the food chain. How can poor people wage a class war against them? By refusing to pay $5 ATM fees? That's a pretty pathetic war plan.

So then, why do the rich keep crying about "class warfare"?

Simple. The best defense against a class war that's being waged against the poor (by the rich) is to raise their taxes. And they know this, that's why their strategy has been to call themselves "job creators", and to claim that they can't create jobs if you tax them more - - even though they've already had some of the most historically lowest tax rates for the past ten years (since the Bush tax cuts).

Mayor Bloomberg was on MSNBC this morning and said we should just let the Bush tax cuts expire...for EVERYBODY (not just for the rich). He said there were two reasons why he feels this way:

1. It's fair, because he doesn't like class warfare.
2. Politically, it's the only chance of getting it done (by just letting the Bust tax cuts expire)

Bloomberg is an ass on # 1 but he may be right on # 2. Last year the Republicans wouldn't fund unemployment benefits for 1 year unless the Bush tax cuts were extended for 2 more years.

The Bush tax cuts have benefited the wealthy far much more, because the capital gains tax was lowered from 20% to 15% - - - and stock trades and stock options in CEO salaries is where they earn the bulk of their personal earnings.

The Bush tax cuts has been a huge windfall for them since 2003. But Mayor Bloomberg also thinks we should lower corporate taxes too (which is bullshit, since they don't pay them now as it is, because of all the loopholes they use. (See: How Corporate Tax Dodgers Hoarded $2 Trillion).

Although the corporate tax rate is currently 35%, the largest and most profitable U.S. corporations have actually been paying only 18.5% of their profits to Uncle Sam. By comparison, in 1969, the year we sent astronauts to the Moon, the tax rate for corporations was 52.8%, and there were not as many loopholes. America was flourishing and people were working then.

In 1977 the capital gains tax was the highest in history at 49%. Today at 15% they are the lowest in history, and they have been this low since 2003. Republicans like Newt Gingrich wants this rate to be 0% and Herman Cain wants it to be 9% with his 9-9-9 Plan.

EXAMPLE: As Freddie Mac’s CEO, Ed Haldeman received a base salary of $900,000 last year and garnered a $2.3 million bonus from stock options. His tax bracket is 35% on his base salary after the first $379,150 but his Social Security and Medicare taxes are capped on the first $106,800 - which equates to 11.86% of his base salary. Most people in the U.S. earn less than $106,800 a year so we pay these taxes on 100% of our wages. If you earned between $34,500 and $83,600 a year in wages or salary, your federal income tax rate is 25%. But CEO Haldman, who received a $2.3 million bonus, only paid a tax of 15% in capital gains tax on these earnings, and he paid ZERO in Social Security and Medicare taxes. This is how ALL corporate CEOs (and Mayor Bloomberg, Warren Buffet, and Herman Cain) pay a vastly lower amount in taxes as a percentage on their total personal income, than do average working Americans who are only earning a median wage of $41,673.

Some people (usually Republicans) are arguing that high corporate taxes are keeping "job creators" from creating jobs. That is simply not true. They're creating jobs overseas because they are saving themselves a fortune in payroll and healthcare costs by using cheap exploited labor overseas. This savings is then directly funneled into the CEOs salaries through stock options, which they only pay a 15% capital gains tax on. (See: It's Not Regulation or Taxes, it's Cheap Labor Stupid!)

One of the greatest detriments to job creation in the U.S. is the overseas income deferral law. This unbelievable gift to multi-national corporations is at the heart of free trade, globalization, off-shoring and outsourcing. Presently these corporations are sitting on $2.2 trillion in untaxed profits in offshore banks to dodge taxes.

Currently in the congressional Super Committee the Republicans are offering $30 billion a year in new revenues, which is peanuts because it's only a one fifth of 1% raise. And of course you know that in exchange for that, they'll also want 10 times more than that in reductions to Social Security and Medicare.

The Republicans would rather allow corporations to hoard cash overseas, than to collect taxes from them to create government jobs and fund our entitlement programs. The CEOs would rather pay themselves another few millions dollars a year and continue to pay $1 an hour for child labor in sweatshops. Unpatriotic CEOs and Republicans would rather let the country fall into ruin, rather than have millionaires and billionaires pay their fair share of taxes on their corporate profits.

It's THEY who have waged class war on US! They haven't paid their fair share of taxes for decades! They've been fleecing record profits and record salaries for years, and yet STILL they're whining, "Class warfare! Class warfare!!"

When is enough ever too much?

Low Corporate Taxes = Excessive CEO Salaries It doesn't matter what a corporation pays in taxes as compared to GDP, or how it's compared to any other index of measure (to skew the numbers), it's what they actually pay to the U.S. Treasury after loopholes (aka "deductions") that matters most. And for the last 25 years corporations have actually paid historically low taxes. While today some corporations may have paid the maximum rate of 35% (when it was over 50% in the 1950s), many others paid ZERO, with the average being only 18%. The same can be said for their CEOs and other high-income earners. While although the top bracket is also almost historically low (at 35%, when it was once over 90%), what they actually pay is nearer to 15% because the majority of their income is earned through capital gains. And because corporations have been paying a low effective corporate tax rate for decades, that didn't keep them from outsourcing jobs overseas for cheap labor, but rather, it did enable them to pay very excessive CEO salaries...who only mostly pay 15% in federal income taxes on their capital gains.

Tax Rates during the Fabulous Fifties
http://bud-meyers.blogspot.com/2011/11/tax-rates-during-fabulous-fifties.html

Historical Tax Rates on the Rich from 1862 to 2011
http://bud-meyers.blogspot.com/2011/11/historical-tax-rates-on-rich-1862-to.html

How Corporate Tax Dodgers Hoarded $2 Trillion
http://bud-meyers.blogspot.com/2011/11/how-corporate-tax-dodgers-hoarded-2.html

It's Not Regulation or Taxes, it's Cheap Labor Stupid!

Over-regulation and/or higher taxes is not why American companies send jobs offshore, it for lower wages. The United States is a far friendlier place to do business than are emerging markets like India and mainland China, this according to international analyses of regulatory climates.

American companies like doing business in politically stable environments (we always hear Senator John Boehner saying, "Business needs certainty in the marketplace"). Large corporations would not necessarily invest in a poor country with no infrastructure and an on-going civil war if it were just for cheap labor, because they wouldn't want any disruptions in their business, and would want their assets protected, both physically and by law.

The United States may have stricter environmental laws, but then again, we wouldn't want to have to live and work in a country with contaminated water and air. But when American corporations pollute the water and air elsewhere, they don't seem to concern themselves so much with the overall global environment. And we've witnessed some of the disastrous results here in America when industry is left unregulated as to the environment. 

We're all familiar with Love Canal and saw the movie Erin Brockovich. The Exxon-Valdez and BP oil spills were well publicized. The W.R. Grace plant in Libby, Montana continually spewed asbestos over the small town for decades, even though we already had environmental regulations in place.

China on the other hand, often overlooks environmental pollution, worker safety, and public health problems -- and American CEOs can take advantage of this. Pollution has made cancer the leading cause of death in China. Lead poisoning is one of the most common pediatric health problems in China, with existing data suggesting that one-third of Chinese children suffer from elevated blood lead levels. Do we want that in America?

And our labor laws are morally superior as well. We wouldn't want our workers to have to endure the horrific conditions that they have to endure in Chinese sweat shops; and we wouldn't condone child slave labor in America either, we've been down that road before. But American CEOs can turn a blind eye to those abuses and take no culpability by claiming they had no knowledge, as in "plausible deniability." This is easy for them to do when China is thousands of miles away on the opposite side of the globe with minimum access by our media.

Many companies are now compromising by cutting hours to cut benefits and reduce wages in a labor-saturated market in the U.S., thereby increasing their corporate profits. By the very nature of their existence corporations are primarily profit-driven, their only reason for being, despite the human condition (environment, working conditions, wages, etc.) A corporation, as a collective on-going concern (almost like a machine) doesn't have a conscience or any moral values per se, so the government needs to regulate them -- and because corporations lack governance and can't control their principal–agent problem to properly police themselves (like the fox guarding the hen house).

The China Daily News is reporting that authorities have ordered local bureaus to plug loopholes in the country's collection of personal income taxes from high-income citizens. The Chinese corporate tax rate is 25%, but there they pay those taxes. Here the corporate tax rate may be higher at 35%, but large corporations have an army of tax lawyers that find every conceivable loophole in our very complicated tax code to avoid paying their taxes.

One of the greatest detriments to job creation in the U.S. is the overseas income deferral law. This unbelievable gift to multi-national corporations is at the heart of free trade, globalization, off-shoring and outsourcing. Presently these corporations are sitting on $2.2 trillion in untaxed profits, which is costing the American taxpayer almost $800 billion in lost tax revenue.

The latest Citizens for Tax Justice corporate tax report (released last week) shows America’s top corporations are now getting what essentially amounts to a 50 percent discount off their tax bills. Over the last three years the top U.S. corporations have actually been paying only 18.5 percent of their profits to Uncle Sam.

For the last nine years, the World Bank has been grading countries on 10 measures of business regulation: getting electricity, enforcing contracts, protecting investors, dealing with construction permits, trading across borders, registering property, resolving insolvency, paying taxes, and getting credit. Based on these criteria, the U.S. ranks 4th in the world with the best business climate.

So in America, multi-national corporations actually have a very good business climate. Although our infrastructure needs repaired, we're not on the verge of civil war or nationalizing their companies. And they only have to deal with morally sound environmental and labor laws, not overly burdensome ones. But by being only profit-driven, it makes sense that they would prefer no laws at all. And large U.S. corporations pay very little in corporate taxes in proportion to their net profits (especially when compared to 40 years ago).

It's cheaper labor that drives jobs overseas. PERIOD. Every consulting website catering to businesses emphasizes the same exact thing, and gives tips on how best to accomplish this. (I would link to a few, but why give them the business?)

So it's misleading for CEOs to say that America lacks skilled labor, although going foreword, I would think that corporate America should generate an "official wish list" as to what skills they will need in the future -- so young people won't be graduating from college buried in debt and holding a worthless piece of paper.

Congress has to pass laws to rescind the tax incentives we give large corporations to outsource domestic jobs. We also need to eliminate all the tax loopholes that only the largest and most profitable corporations can best take advantage of. Maybe if we could collect their fair share of tax revenues, we actually could lower the corporate tax rate. But for now, we have to put Americans back to work, restore our infrastructure, get government services funded, and put teachers back to work. We don't have just a spending problem so much as we have a revenue problem.

For Senator John Boehner to say "we don’t have a revenue problem" is like the Iranian president saying the Holocaust was a myth. Today we have the lowest capital gains tax in the history of our tax code, and corporate taxes are lower now than they've been since their highest rate in 1969 (but now corporations have far more loopholes, thanks to the lobbyists and members of congress who are beholden to their biggest campaign contributors). But even then, and after the Bush tax cuts, we've still lost 50,000 factories and millions of jobs overseas.

But yet Republicans, instead of raising taxes, they want to lower the corporate tax rate even more and/or to completely eliminate capital gains taxes all together (such as with the Herman Cain's 9-9-9 Plan or the flat tax). Incredible!

Why don't we just pass a law saying only people earning less than $25,000 a year should have to pay taxes, and let large corporations, banks, CEOS, and hedge-fund mangers off the hook completely...and don't tax them at all. Isn't that what they really want? And aren't they also asking us to trust and believe in them when they say that by not taxing at all would be so much better for the economy -- and will put everybody back to work? During the Great Recession large corporations and CEOs have been doing just fine; it's everybody that's had to suffer.

Should we believe the CEO of a corporation, that's only a profit-driven entity (without a heart, conscience, or soul), when they tell us all these things? In a perfect world, a corporation would only exist, not to enrich a very few, but to work strictly for the benefit of humanity. There would be no profits, just a direct stream of revenues to the U.S. Treasury for use in our education system, the funding of Social Security and Medicare, and for maintaining and improving our infrastructure -- for the interests of the common good for all Americans (rather than just enriching the board-of-directors). We could also eliminate class warfare between the uber-rich and abject poor.

The CEOs could still be paid a good salary, and offered bonuses based on real performance; they just couldn't vote to give themselves a $100 million annual salary while paying their workers $1 an hour in a sweatshop in China...and then use the excuses that stiff regulations and high taxes prevents him from hiring Americans.

It's misleading for a CEO to claim that excessive regulation and/ or over-taxation is driving jobs overseas. It's neither of those things. It's only done for cheap exploited labor to satisfy common human greed.

And that's just one reason why today they're protesting on Wall Street and all over the world.

Low Corporate Taxes = Excessive CEO Salaries It doesn't matter what a corporation pays in taxes as compared to GDP, or how it's compared to any other index of measure (to skew the numbers), it's what they actually pay to the U.S. Treasury after loopholes (aka "deductions") that matters most. And for the last 25 years corporations have actually paid historically low taxes. While today some corporations may have paid the maximum rate of 35% (when it was over 50% in the 1950s), many others paid ZERO, with the average being only 18%. The same can be said for their CEOs and other high-income earners. While although the top bracket is also almost historically low (at 35%, when it was once over 90%), what they actually pay is nearer to 15% because the majority of their income is earned through capital gains. And because corporations have been paying a low effective corporate tax rate for decades, that didn't keep them from outsourcing jobs overseas for cheap labor, but rather, it did enable them to pay very excessive CEO salaries...who only mostly pay 15% in federal income taxes on their capital gains.

How Corporate Tax Dodgers Hoarded $2 Trillion
http://bud-meyers.blogspot.com/2011/11/how-corporate-tax-dodgers-hoarded-2.html

Tax Rates during the Fabulous Fifties
http://bud-meyers.blogspot.com/2011/11/tax-rates-during-fabulous-fifties.html

Historical Tax Rates on the Rich from 1862 to 2011
http://bud-meyers.blogspot.com/2011/11/historical-tax-rates-on-rich-1862-to.html