CEO's Putting Profits Before Country Are Un-American
If I declared right now that I won't be paying any taxes until the U.S. government lowers my taxes to a "fair rate", I'd almost certainly be arrested for tax evasion.
But when the Washington Post asked Apple CEO Tim Cook about the billions that Apple has stashed in tax havens around the world, Cook declared that "We're not going to bring it back until there's a fair rate. There's no debate about it."
And nothing happened, either to Cook or to Apple.
Because when it comes to taxes, it's truer today than ever that only the little people pay.
Apparently though, that's not enough for the CEOs of multinational corporations, like Tim Cook.
He doesn't just want to avoid taxes, he wants Americans to know that Congress isn't writing the rules, Apple is.
Dave Johnson from the Campaign For America's Future wrote a great article about this at the Huffington Post titled "CEO Of Giant Corporation Tells US Government He's the Boss of Them".
In it Johnson writes "[T]hese days huge multinational corporations are the boss of our Congress. So, CEO Cook gets away with it, and with keeping $181 billion in tax havens to dodge paying $59 billion in taxes. Cook knows he can just come out and say they are not going to pay their taxes until there is a "fair rate."
And he's right.
But Apple is by no means the only corporation doing this.
In March, Citizens for Tax Justice reported that American Fortune 500 corporations are avoiding up to $695 billion in U.S. federal income taxes by holding $2.4 trillion of "permanently reinvested" profits offshore.
That's nearly $700 billion that America's largest corporations, corporations like Netflix, Nike, and Citigroup, are stashing in offshore tax havens.
And now Tim Cook is setting an outright un-American precedent by flagrantly declaring that Apple won't pay a dime of what's owed unless the U.S. government does what he says.
It's not that these corporations don't rely on tax dollars from the government, they use our interstates, they use our municipal water systems, our court systems protect their patents and copyrights, and their products rely on government-developed technologies like GPS.
They just don't want to pay for it.
Corporate executives like Tim Cook are plainly putting profits and the well-being of their investors ahead of the well-being of the country, and it's flat-out un-American and unpatriotic.
Average Americans, the "little people", can't decide to refuse to pay taxes, for any reason!.
But a CEO like Tim Cook can simply say that his corporation won't bring its money home until he gets what he wants, "no debate about it.".
In his Huffington Post piece, Johnson translates exactly what a "fair rate" means, writing "[H]uge multinational corporations will tell you a 'fair rate' would be zero. Or better yet, how about We the People just bow down and pay taxes to them. The corporate tax rate used to be 50%. CEOs complained it was "unfair" so it was lowered to 35%.".
In reality, though, the Government Accountability Office estimated in 2013 that the average effective corporate tax rate is only about 17% including state and local taxes, about the same as an individual who earned $37,000 a year.
And right now we ARE basically paying taxes to them: we buy Apple's products, they stash the revenue overseas, and then we pay for the roads, water and technologies that their business depends on.
It's average working Americans who are most hurt by this type of un-American corporate tax evasion.
In 1952, about 32% of federal revenues came from corporate taxes and only 8.7% came from payroll taxes.
In 2016 though, the Center on Budget and Policy Priorities reported that the corporate income tax only accounted for about 11% of federal revenues while the payroll tax accounted for closer to 33% of total federal revenue.
Think about that, multinational corporations have nearly $700 billion in unpaid taxes stashed overseas while average working Americans paid for a third of the federal government's revenues, over $1 TRILLION!.
Conservatives are intentionally lying when they declare that it's impossible to raise enough revenue to accomplish big goals like rebuilding our crumbling infrastructure, building a completely renewable energy grid, and guaranteeing tuition-free college.
We just need to rein in companies that put their company's profits ahead of the well-being of the United States and act like paying taxes is a negotiation.
This type of greed that puts corporate profits and investor dividends ahead of our nation would have been unthinkable for the generation that fought World War II, but it's become textbook behavior for big businesses ever since Reagan changed the game and ushered in the "shareholder revolution" of the 1980s.
Our tax code needs to be fixed to encourage companies to come home and pay their taxes, and to block companies from doing business in America without paying their fair share.
Write to or call your Members of Congress at 202-224-3121 and demand that Congress ends the "deferred tax loophole", and sends a clear signal that the American government doesn't kowtow to the corporate greed of unpatriotic multinationals.
You are seeing the transcendency of the corporation over the nation state.
This is happening in many countries around the world.
Countries instead of taking a tough stance are begging the companies
not to leave their borders.
The Dollar is our Lord---in every instance---and, in accordance with the First Commandment, we have no other gods before it.
Currently, Earnings from subsidiaries outside the U.S. are not subjected to the Corporate Earnings Tax until they are repatriated.
However, those same Earnings are reported to shareholders, and associated with the shares of Apple, or any multinational corporation, on the appropriate stock exchange.
This is ludicrous. Those Earnings are either Apple's, or they aren't.
I would propose that multinational corporations should pax taxes on Earnings according to which exchange(s) they're listed on. If they want the Earnings associated with AAPL on the NASDAQ, then they pay U.S. tax on those Earnings. If they want to have those Earnings associated with their UK or China subs, then fine -- don't pay the U.S. tax. But don't attribute those Earnings to AAPL on the Nasdaq.
It seems that this would be a relatively simple change to U.S. tax code, but would provide much more incentive for "U.S." companies to put that money back into the U.S. economy.
began in 1980's deregulation, ' borrowing' from SS lock box by Reagan to hide his huge debt, trickle down economics, massive taxpayer funded Corp tax cuts, subsides, TIF districts aka huge gifts to billionaires, giant corp loopholes. Bush Cheney failed wars, maiming killing, wasting many TRILLIONS , Cheneys Halliburton war profiteering . US laws suck They FAVOR greedy Corp s - who hide billons overeseas US legal system is BROKEN Its stacked in favor of the super wealthy How long will it take till voters GET IT ??? Or are they too ignorant, uncaring, gullible, easy to manipulate ? ... Trump is a consumate CON man Its all in his book ' Art of the deal ' Appeal to their emotions, fears..doubts . Trump truly does love the' poorly educated' Works great for the GOP Congress They swore to ' work for we the people ' then McConnell & pals ' vowed publically in Jan 2009 to ' do all they could to make Obama fail, block everything Obama tried to do , make him a one term President I call that treason / anti American /appealing to the worst in human nature / hate crime / because of hate of our 1/2 black President Family values ? B S
President Obama is personally responsible for the refusal of Corporat CEOs to pay their fair share of US taxes. I has been Obama's policy to use corporate fines only to punish corporations who violate our nation's laws, rather than prosecuting and jailing the corporate executives who instigated or at least approved their coprorations deliberate violations of our laws. So corporations view such fines as simply "a tolerable cost of engaging in immensely profitable crimes."
Obama SHOULD have been literally "putting such corporate executives in jail." That's what President Goege H. W. Bush did to solve the "Savings and Loan" crisis, and his approach was FAR more successful at curbing such crimes than anyting President Obama has done.
Hey Thom. What ever happened with the evening rebroadcast of your daily show???
I've been listening for several years and I TOTALLY MISS your show. The new program The Filter is terrible. The only means I have in CT is XM and I am not able to receive or pick up either of the stations AM & FM here in CT. Please advise me of any other alernative.
Thom should conduct seminars for the Dems on how to play offense when running for office. Tonight's blog is a direct and righteous attack on the Teapublic Party.....the party that is owned by, and supports the tax evasive billionaires. Many of these blogs take this postion of offense in that they spread the plain truth about big money and its corrupting influence over what should be representative government, but thanks to extreme concentration of wealth and thus power, we have ended up with an almost pure Fascist form of government.
Yeah I know there are those who will say this big money corruption is on both sides, and to an extent it is, but read the congressional voting record...just Ryan's year after year budget plan alone, and you'll quickly perceive that an extreme difference exists in who supports Fascism and who does not.
This year, corporate donations for Democrats will be far greater than corporate donations for Republicans. This is the opportunity that Hillary has been waiting for.
The right question to ask is, "How should government raise its revenue?" We know that the existing tax system is inequitable and unbelievably complex. It has created huge profits for tax attorneys, tax accountants and tax preparers. And, of course, every business and every individual who can finds the ways to avoid paying taxes. Years ago I was in the audience when a former deputy mayor of New York City testified on taxation before the City Council in Philadelphia. What he said made perfect sense. "When you tax people too heavily, they will move. When you tax businesses too heavily, they will move. When you tax property improvements too heavily, owners will stop making repairs and new buildings will not be constructed. But, when you tax land based on its potential annual rental value, owners of land cannot move it. They will either develop it to its highest, best use to offset the tax obligation, or they will sell it to someone who will." The lesson is that individuals and businesses should compensate society based on the value of the land (and land-like assets, e.g., the broadcast spectrum) they control and not on whatever income is generated from the goods they produce or the services they perform.
Edward J. Dodson, M.L.A., Director, School of Cooperative Individualism (www.cooperative-individualism.org)
Thom -- You have it backwards. Minimizing taxes is VERY American.
For example -- John Kerry chose where to park his boat based on a lower tax rate in Rhode Island. Low income tax states attract business, and if you look at states with low tax rates you'll see that jobs are flowing in.
If you don't want companies to park money in other countries you need to either provide an incentive for the money to be returned to America, or put laws in place that prohibit moving the money out of the US. The problem is that American laws only control American Corporations. Companies in other countries are subject to laws in other countries. And, those countries, if they are smart -- will create low corporate taxes so that jobs move their direction.
It's a fairly simple rule, and it is not unique to America -- create an attractive climate for business and you'll inherit jobs. Create a hostile environment and jobs will go away.
Do you want jobs? Each country and each state makes that decision. And ... there are winners and losers.
A few weeks ago Thom mentioned the 1998 movie called Bulworth starring Warren Beatty about a politician during the 1996 elections who went off the deep end, ordered a hit on himself and then figuring he had nothing to lose started telling the truth which made him wildly popular among the voters. A great movie and the content applies even more so today regarding money in politics and how it affects both democrats and republicans. I enjoyed it and found it fascinating especially when he told white people that they had more in common with black people than they did with rich people and how true that is. When a voter complained about not being listened to regarding health insurance he said that the insurance company contributed more to his campaign. How true is that? Thom should promote the hell out of this movie. Thanks Thom, I had forgotten the title but not the subject of this great movie. It's on Netfilx DVD.
Apple's attemps at tax aviodance are not surprising. The most abhorrent act of Apple was to decimate the silicon valley by moving thousands of technology jobs from the US to China. Very little was said about it at the time, as we were under the cult of "genius Jobs".
This is where the US worker loses. Invention, innovation, and intellectual capital generated in America because of freedom, education, consumers, and investment is whored out to foreign countries with cheap labor and less taxation. For, in many cases, higher profits over already high profits. The stockholder's demands are put way above the needs of the US and its workers.
In terms of corporations dictating the terms of paying taxes, I think that one could entice these corporations to pay more if it was guaranteed that any increase in taxes above a predetermined baseline would be spent only on increasing our infrastructure. This earmarking would allay concerns that these taxes would be spent on direct income redistribution or social programs that don't work. It would also strengthen their businesses and be very popular with Americans of all political bents.
As these corporations have benefitted from our infrastructure, they can give back to strengthen it.
Evil rich guy: The happiest people on the planet live in Denmark, and guess what?....they have the highest tax rate on the planet, almost 50%. When all is added up, property tax, sales tax, fees, and income tax, I pay about that same tax rate here in the United States...and my income isn't even close to six figures.
So why are citizens of Denmark happier than me? They have Democratic Socialism as their form of good government. They don't pay 50 cents out of every tax dollar to "military for profit." I believe if I can pay almost 50% in some form of tax, then a billionaire certainly can too. But unlike wealthy capitalists, my 50% tax rate has to be paid with hard earned money.
2950-10k -- I am not anti-tax. Ultimately, if the government spends a dollar it must collect a dollar in taxes PLUS any accumulated interest on the borrowing. Taxes must be paid. I have a problem with the government wasting money, not with the fact that purchases must be paid for.
My only comment was that in a global economy, or even in a country where states compete for jobs, there needs to be an understanding that tax policy will have an impact on the willingness of corporations to do business in that locality. Taxes are only one piece of the puzzle, but they are an important one. Google, Facebook and other tech companies have been setting up in Seattle, and I'm sure a big part of the reason was the lack of a state tax.
I'm very worried about the push for a global economy. This is one where I agree with Thom that we need to use tariffs to level the playing field. If Hillary is elected we are in deep trouble. Expect that she is only paying lip service to being anti-TPP.
As to Denmark .. I once put together a point by point comparison of the two economies. There are things that work for them that wouldn't work for us, and visa versa. It really is Apples and Oranges.
As to fairness of tax policy -- We could debate that for a lifetime... I am not opposed to paying my share of taxes, and in fact pay a much bigger number each year than you can imagine. What I don't like is that people are allowed to vote who don't pay taxes, and who don't take the time to inform themselves on the issues. There are too many people who vote based on getting free stuff from the government. I believe taxation and representation should be linked much more so than they are today. I'm not sure the best way to accomplish that, but would love to see it happen. There are people that don't care about the size of the national debt, because they aren't the ones writing the checks to pay it off.
I have been the CEO of a public company. My job was to maximize the return on investment for the owners of the company. In the case of public companies the owners are oft-times average people who own a mutual fund. They bought their stock expecting a return on investment. In order to grow a company money is needed. With more money, faster growth is possible. With more growth, more employees get hired.
CEOs are not "greedy" in the ordinary sense of the world. They just do their jobs. If widgets cost 10 cents in China and $1 in Ohio, then you build widgets in China. It's really that simple. If the government imposes a tariff on Chinese widgets then the economics change and it can make sense to buy Ohio widgets. As an American I would much rather buy American, but .. it's like saying "I'm black. I want to buy from companies with Black Management." Or, "I'm jewish. I want to buy from jewish companies" Or, "I like motorcycles. I want to buy from companies that give special parking places to motorcycles." In my opinion, none of that has any place in the workplace. My job was to grow the company and create value for shareholders, and jobs for employees. As Thom has been known to say, "Companies are not people." A company is an investment vehicle and my job was to build value. Period. Personal prejudices do not belong in the workplace.
To be clear -- the rules of the game are established by the government. As a CEO I did not get to define the playfield on which I competed. The laws were what they were. I would have preferred laws that allowed me to hire only American labor -- but, it wasn't my job to set global politics. I was just supposed to make and sell widgets profitably given the cards that I was dealt.
It is wrong to demonize corporate CEOs for legally maximizing profits based on policies set by politicians.
President Obama has been sued, lied about and not allowed to give us our next Supreme Court nominee because of bias & bigotry ! He was handed a huge platter of sh-t when elected by Bush & Cheney. How can anyone like Obama try to straighten out all of this BS???
The Military Industrial Complex has a strangledhold on our govt & we need to kick all of them out !!! I am sooooo tired of all of the BS being slung by the far-right together with the MIC's that if I were the next President I would put them all in their jails for what they have done to our country !!!
Evil rich guy; I've just been out on a Friday night with extremely progressive anonymous young friends, so I'll try my best not to be a pant load.
If you and your income bracket feel you're being unjustly taxed, you can remove yourself from the country at anytime you feel comfortable to do so. Don't let the door of liberty hit you in the ass. You and those with your ideology have the money to facilitate this ....so do it. I'm committed to unions and cooperatives to take up the slack for capitalist slackards who need to exit this fine country my ancestors died for. I'm also committed to preventing digital election fraud!
I'm not an idiot....unlike the average pushover dem I totally get where you're coming from...give it up and move to a fascist state.
leave before you're forced to flee
2950-10k ... I'm not sure what your response has to do with my comments. I believe I said that I believe in taxes, and pay plenty of taxes. I did not comment on whether or not my taxes were too high. My sole comment on taxation was that I grumbled about people voting to increase taxes who pay no taxes. I also commented that there is money wasted by the government from time to time and I don't think that can really be disputed.
That said ...
There are states which do not have a state income tax and they have found that this is an effective tool for luring business. Similarly, there are COUNTRIES that have found that lowering tax rates is an effective tool for luring business. If you want more of something you create an attractive environment. America needs more jobs. If you really want to lift people out of poverty give them a job. Or, if all you really care about is their vote, you put a chicken in every pot and then forget them.
We need a President who understands how business operates, and is focused on bringing jobs back to America. Hillary is at best paying lip service to this issue. Trump is 100% onboard to doing what it takes to bring back jobs from overseas.
I am not arguing for lower taxes. Lowering taxes is only one tool out of many that can be employed to bring jobs back to America. (Eg. China builds factories on behalf of their companies) Ultimately the bills need paid and there must be taxes. But ... if you look at the complete picture, we need to be creatively thinking about what we can do to bring back money from overseas, and bring back jobs from overseas. As Thom has mentioned, tariffs is another arrow in the quiver. Those are definitely part of the plan, but we need both a carrot and a stick to get the job done.
I hear your concern that this election is about the rich trying to cut taxes, or complain about the level of taxes. All I can say is, "I haven't said that" and "I don't remember Trump saying that." And, in fact, Trump made a comment early on which was that he thought taxes could use boosting, and he has backpedaled on that more recently. But, I always believe it is more important to see what people said before they were in the public eye rather than after they are running for office. Hillary is now anti-investment banker, and anti-TPP -- but, what do you really think she is? Trump is now anti-Obamacare and anti-tax increase -- but, what do you think he really is? My long term opinion on Trump is that he believes in health care for all, and that bills must be paid (and that we may need to spend outselves out of this hole). Dig deep and I think you'll agree. I think you'll also find he has a long healthy relationship with unions. Study his companies and you'll find women and all ethic groups in positions of power. Dig deep and I think you'll be surprised by all you learn.
My two cents...
I think it is all very American!