JUDY WANCHISN: Tax havens and tax avoidance
Taxes are how we share costs of our common interest such as defense, highways, airports, social programs, etc. based on the principle of everybody paying a fair share. Well, we know that is not how it is with the rich and powerful and some corporations. There is one set of rules for them and another set for the rest of us.
According to Forbes magazine, $15 trillion to $20 trillion is sitting in “pirate” banking systems called tax havens. In America alone, some $150 billion in tax revenue is lost each year because of these tax havens.
We cry at the shame of welfare and living off the government and how programs should be cut. In the meantime, corporations get breaks through subsidies, bailouts, tax incentives, loopholes and clever accounting techniques. They evade taxes, commit fraud, ignore environmental regulations and violate labor rights. In the ’90s, this corporate crime cost us $200 billion a year. (Source: FACT Coalition)
“Frontline” quoted former IRS Commissioner Charles Rossotti as saying, “The gap between taxes owed and taxes collected is in the range of $250-$300 billion a year — this is equivalent to a 15 percent surtax on the honest taxpayer.”
We are told we can’t “afford” full Social Security benefits, even though closing these tax-haven loopholes would pay for the “chained CPI” benefit cut more than 10 times over. Ordinary people must sacrifice earned benefits while allowing corporations to avoid more than ten times as much in taxes.
Corporate tax rates are near a 60-year low, even though profits are at a 60-year high. Thirty huge corporations paid no taxes or had a negative tax rate (received a rebate): General Electric, DuPont, Verizon, Boeing, Honeywell, Pepco Holdings, Exxon Mobile, PG&E, Tenet Healthcare, Wells Fargo, Mattel, Corning, Ryder System and the list goes on (Americans for Tax Fairness).
And here is the kicker: Big corporations paid $216 million to Congress and got $223 billion in tax breaks. That is a great investment for Congress, but a bad idea for the American people.
There are trillions of dollars squirreled away in these havens and no one is exactly sure how much. Those who lose are the general public, U.S. economy, state governments and taxpayers, the integrity of the tax system and the public trust. Albert Einstein said, “Problems cannot be solved by the same level of thinking that created them.”
We need a new Congress.