This is a quick and dirty cut and paste from something I wrote up on my Facebook.
I haven’t linked my citations or anything, but it’s all pretty readily available stuff. So, if you can’t find these numbers, or disagree, feel free to question, and I’ll see if I can go dig the citations back up.
A pretty regular trope I hear is the Welfare Fraudster.
They take in government handouts while dining on steak, wearing $200 sneakers and having under the counter jobs and income that they dodge taxes on.
Most estimates put such government assistance fraud at about 2% of the total received.
Meanwhile US companies are reported to have greater than USD1.7 Trillion in offshore profits. That’s under the counter income, essentially, that is not taxed. These holdings are being kept there by companies who insist that the money will not be repatriated and therefore need not be taxed.
We have a worldwide tax system which means that our corporate rate is 35% for US based companies on money earned around the world. BUT, there are foreign tax credits earned and taxes are deferred until profits are brought home (repatriated). So, a corporation earns money in a low tax country, pays the taxes there, and reinvests there. They earn the credit for paying the taxes, and no taxes are due because the money was reinvested rather than returning.
There’s tricks played with the money, though, naturally. Michigan Senator Carl Levin reports that a subset of 27 companies had 46% of their offshore assets invested in US banks.
Basically, it’s money laundering. Taking money to cheaper countries, putting that stamp on it and using those holdings to do international investments with “foreign” money back in the US.
It’s tricky, but Congress has no interest in changing it. Even without that, though, it’s incentivizing reinvestment overseas. No wonder we’re hemorrhaging money in the US.
These are some of the “loopholes” you’ve been hearing about during the sequester talks.
There’s more, too, with big banks earning a lower borrowing rate to help keep them from failing. This rate has been put at 0.8% by Kenichi Ueda of the International Monetary Fund and Beatrice Weder di Mauro of the University of Mainz. If their figures are correct that puts the 10 largest banks at an essential subsidy of USD83 Billion, or about 3 cents of every dollar in taxes brought in. The top 5 banks account for about USD64 Billion of that. Which is actually sort of horrible, as that’s nearly equal to their stated profits. Which means they’re just breaking even with that subsidy.
In other words, much of the profits they’re reporting to the stockholders are subsidies that you, the taxpayer, and all the rest of us are paying (meanwhile, corporations are dodging these by sending them overseas).
These tax loopholes were lobbied for by the same companies enjoying them. At the same time they’re lobbying for a decrease in the corporate tax rate that they claim would bring income back, but has not ever been shown to.
It’s a straight redistribution of wealth.
Meanwhile, instead of closing these loopholes, we’re cutting WIC, Medicare, free lunch programs that are often the only hot, full meals that our already high number of food insecure children are eating each week, housing subsidies that were keeping people from being homeless, and many other individual assistance programs.
And really, is it any question as to why? These massive conglomerates own the actual media that is slanting the stories you hear. They pay for the elections of politicians who then legislate bills that the company’s lobbies actually wrote. Hell, the legislators themselves are often shareholders and owners of many of these companies. Going all the way up to the Supreme Court of the United States.
Meanwhile children who are starving, people who are dying from lack of medical care, and the homeless do not have lobbies.
I don’t even care, be mad at individual assistance programs, but, for fuck’s sake? Be angry about the straight redistribution of the US economy into the hands of the very few who are making the laws that make it possible.
That’s the *actual* Socialism that you all claim to rail against.