Large corporations only exist to sell us stuff. They offshore most of their jobs, and they don't pay taxes. Through various accounting tricks they realize their profits in countries where there are no taxes like the Cayman Islands. They only maintain a post office box there, but that's good enough for tax purposes to maintain that they are based there. So what is their involvement then in American lives? Why, they are here just to sell us stuff, pure and simple. End of story. And they are in every nook and cranny of American life. They are in every mall. They also destroy jobs and businesses by pushing out Mom and Pop stores all over America.
In addition to that, they are feeding at the government trough. Their extensive lobbying network ensures that they will not only pay no taxes, but they will also get taxpayer supported government subsidies. For example, last year Exxon Mobil, one of the most profitable US corporations, paid no taxes, but got a $156 million tax refund! How sweet! While many were losing their houses to foreclosure, Exxon Mobil posted $19 billion in profits in 2009.
This is just another example of how major US corporations offshore jobs, pay little or no taxes and extract subsidies from government:
But what’s more interesting about this story is Exxon’s effective income tax rate. Exxon has over the past couple years paid a U.S. federal income tax that is about 10 percent lower than its non-U.S. effective tax rate. Other oil companies also pay less, and in some years this difference has approached 50 percentage points.
Oil companies pay less in U.S. taxes in part because they receive generous tax subsidies. These subsidies will cost the U.S. government about $3 billion next year in lost revenue and nearly $20 billion over the next five years.
Tax expenditures are government spending through the tax code. They are distributed through deductions, exclusions, credits, exemptions, preferential tax rates, and deferrals. What makes them look different from grants or checks is that they are delivered through the tax code as part of tax expenditure spending programs.
These tax expenditures can amount to a significant portion of federal subsidies for oil and gas. The cost of tax expenditure programs for oil and gas companies made up about 88 percent of total federal subsidies in 2006.
As Jeffers stated, “I’m not in a position to make a judgment on the tax policy, but what it is we adhere to.” Tax expenditures are simply a function of our country’s tax policy.
Exxon will continue to adhere to current tax policy, enjoying the tax subsidies it receives from it…unless Congress cuts these subsidies.
And there’s good reason to believe that Congress should cut them. The billions in tax subsidies we spend each year should support government priorities that generate results and value for the American people. And it’s not clear that a few billion in subsidies for oil companies does much to impact their business decisions.
According to estimates from the Office of Economic Policy at the Department of Treasury, removing subsidies for the oil industry would at most affect domestic production by less than one-half of 1 percent.
Billions of dollars in tax subsidies can make or break some industries, but they may not be as important to oil companies. Even Exxon recognizes that other types of government action may affect its bottom line more than tax subsidies. Jeffers noted, “We are advocating for opening up public resources. [Support for oil companies] is fundamentally about what you want your public policy to do.”
So billions in tax subsidies may not be doing much of anything. But who would look a gift horse in the mouth? Eliminating these billions could make a real difference to American taxpayers.
Cutting this spending could help reduce our fiscal deficit. President Obama is creating a bipartisan commission to examine spending cuts that will reduce the deficit. The $20 billion saved over the next five years from eliminating these programs would be enough to cover this year’s Federal Drug Administration’s budget and the operations of the Smithsonian Institution, with a little left over.
Or the federal government could use the savings to fund America’s transition to a clean energy economy by financing a Green Bank, making thousands of homes energy efficient, building new transmission lines, or extending financial supports for renewable energies. Real money is at stake.
Tax expenditure spending programs should support public policies. Our country has made clear its commitment to clean energy. President Obama, along with 19 other world leaders at the G-20 conference in Pittsburg, signed a pledge to phase out subsidies for fossil fuels. If the government’s energy policy supports clean energy initiatives, it doesn’t make sense to put billions in tax subsidies for oil companies.
Many corporations like Halliburton have moved their headquarters out of the country. In Halliburton's case they moved to Dubai, yet they continue to suck at the government trough.
I think we as a democratic government should refuse to offer any government contracts or subsidies to non-US based corporations and should tax the hell out of them if they want to do business here. This would serve the purpose of creating companies in the US that are here not only to make profits for their CEOs and shareholders, but to provide jobs and to support the commons by paying their fair share of taxes. Corporations that employ Americans and provide jobs should get tax breaks. All others should pay through the nose for the privilege of selling into the American consumer market.
Also, US companies that locate plants abroad and then import into the American market should pay tariffs. This would not actually violate any free trade agreements because we wouldn't be charging tariffs on other countries' products entering the American market. We would only be charging tariffs on American companies reimporting products into the US which couild be manufactured here, providing jobs here. This seems almost like a no brainer, but then our political system is controlled by large corporations through their lobbyists and not in the interests of the American people. It can hardly be called a democracy any more. It's an oligopoly with wealthy corporations plying Washington with their amply funded lobbyists.
It has been estimated that rich people and corporations are avoiding paying $100 billion per year in taxes by offshoring profits. This is ridiculous. The government is going broke, and we're allowing the offshoring of profits?! American citizens are going without jobs, and we're allowing the offshoring of jobs?! The Obama administration is not doing enough to correct these problems. Sure they're doing a little bit which is more than the Republicans would have done, but it's not enough. But where is the movement on the left which would address this. Answer: there is none. The only movement is the Tea Party movement funded by the billionaire Koch brothers whose main goal is to make the situation even worse for themselves and the rest of the American middle class by giving even more tax breaks to the wealthy, giving even more to the military-industrial complex (actually this might be feathering their own nests because many of them might be employed there), and giving even more government subsidies to large profitable corporations like Exxon Mobil while eliminating or vitiating government social safety net programs like social security and medicare.
US government policy has been responsible for creating the situation which allows the offshoring of jobs and profits, which allows rich people and corporations to pay little or no taxes and which allows large corporations like Wal-Mart to push out locally owned Mom and Pop stores making every American mall a homogeneous zone populated by the same store chains and franchises nation wide. This situation can be changed by revising those policies and enacting policies which would encourage the onshoring of jobs, the encouragement of locally owned Mom and Pop stores, the encouragement of family owned, as opposed to corporate owned, farms and the requirement that the rich and wealthy corporations pay their fair share of taxes instead of receiving government subsidies. But none of this will happen until there is a grass roots movement on the left equivalent to the Tea Party.
