It’s April 15th,
the day your landlord Uncle Sam comes around to shake the annual rent from your
pockets for the privilege of living in the world’s greatest nation, while
promising to quell the racket from your downstairs neighbor, Mexico. And
despite doing the best we can to hide our assets and shave our income, at the
end of the day We, The Tenants, share a great, collective sense of
gratification: watching the news as people who are not us wait in long post office lines till midnight.
No! What we share is
the gratification of contributing our fair share toward maintaining the machinery
of our wondrous democratic cooperative. Even the poor slob earning only
$8,025 a year -- the minimum taxable earnings for a single taxpayer -- knows
the joy of kicking in his 15% to keep us humming along. Which makes it
all the more perplexing to discover that, over a five year
period studied by the Government Accounting Office, 61% of U.S.
corporations paid no corporate income tax, and 94% reported a tax liability of
less than 5% of their total earnings.
Now why would
corporate America deprive itself of the warm glow that comes from supporting
the much-lauded “free market” that allows it to thrive like a stripper during
shore leave? The answer is the same as the punch-line to a joke involving
a dog and its genitals: because they CAN.
chieftains are quick to defend their punch-line status by pointing out how they
suffer under the second highest corporate tax rate in the world – 39.3%, just a
tick behind Japan’s 39.5% (that extra .2% no doubt related to the cost of defending against periodic
attacks on Tokyo by atomic-generated monsters). But according to Citizens
for Tax Justice, a watchdog agency that apparently watches both dogs and
agencies, when measured as a share of Gross Domestic Product, U.S. corporations
quickly drop from second-highest to third lowest in the world.
While an ability to
suddenly go from second-worst position to third-best might
interest, say, the New
York Knicks, it doesn't explain how most corporations get away with zero tax liability. For that, we can thank
our business-hugging politicians for the various tax loopholes they've buried
in our tax code like DaVinci in a bad novel.
For instance, one
way to avoid a variety of pesky tax obligations like Medicare and Social
Security is to create a “shell company” in places like Bermuda, Gibraltar and
the Caribbean -- a sort of Bermuda Triangle where corporate revenue goes to
disappear only to turn up later, like the long-lost flyboys in “Close
Encounters,” hustled away and safe from taxation. This is a favored way
of doing business by many companies with giant federal contracts, like
Haliburton, who, in addition to holdings in the Cayman Islands and Bermuda,
also have incorporated subsidiaries in Panama, Liechtenstein, Dubai, and
someplace called Vanuatu, which may or may not be real. And thanks to your
elected officials it's all legal, and as simple as purchasing a post office box
just like the one you might use to receive porn in a plain brown wrapper...
except you can feel better about yourself.
Why should you
care? As the notoriously subversive underground publication Parade
points out: because as corporate America shakes off its tax responsibilities like a wet dog, you, the lowly individual, are
forced to assume more and
more of the federal tax burden. Way back in 1940, when the World's Fair promised us a future of robots and rocket packs,
corporations paid 50% of all federal taxes. Here
in the 21st century, where "Soylent Green" looks like a plausible
future, corporate taxes make up only about 14% of U.S. revenues. Stick
that in your rocket pack!
So when you go to
sign your tax return today, resist the urge to stab yourself in the neck with that pen, and try to forget that you’re
still eight days away from seeing the
first penny you’ve earned all year (Tax
Day is April 23rd!).
Instead, be grateful for the opportunity to contribute to our highways,
schools, public safety, congressional salaries and sub-par body armor for our
Or, if you look good in Bermuda shorts,
you can always incorporate.
*** A rare follow-up postscript: It took the so-called "mainstream media" another 4 months to figure this out (but
give them the benefit of the doubt! They may after all have been unconscious since stabbing themselves in the neck with a
for the GAO's August 12th report guaranteed to induce nausea quicker than rush
night at an unpopular frat!***