The Real Swamp That Needs Draining
1 year ago Citizen#7 0
Accenture L.L.P. incorporated in Dublin Ireland September 1, 2009. The U.S. Internal Revenue Service has been contracting with Accenture at least since 2010.
In 2012 the IRS signed a 10 year contract with Accenture to manage three IRS Portals. In 2015 the US Government had contracts with Accenture totaling $92,687,578.70.
The U.S. government has hired a company that uses a tax loophole to shelter income from the very same I.R.S. and U.S. government to avoid paying taxes!
The term used is “off-shoring” – its one way to avoid paying taxes, a loophole. Accenture is doing nothing illegal. Our Congress has made sure that this practice is legit. Accenture says “Thanks Congress, we appreciate the business and letting us use loopholes to avoid taxes while we do others taxes.”
According to the Center for Tax Fairness 60 years ago one third of the federal tax revenues came from corporations. Today one tenth of federal tax revenues come from corporations.
Between 2008-2012 General Electric made $27.5 billion dollars in profits and claimed $3.1 billion in tax refunds. Guess who provides G.E. with their tax refund, the American taxpayer.
The stick – If the government cracks down on G.E. the potential threat is G.E. will pull out of the U.S. and move their business to a more “welcoming” environment. The other perceived threat is G.E. will cut their workforce in the U.S. to compensate for the taxes they will begin to pay if the loopholes in the tax code are plugged up. Politicians who feed at the G.E. trough are deathly afraid of being singled out as responsible for job loss, and don’t want to create powerful enemies sit quietly picking up the crumbs from G.E.
The carrot – Politicians who mind their P’s and Q’s are rewarded for supporting favorable tax code revisions (tax cuts favorable for G.E), and speaking out against those nasty regulations holding G.E. back. Their reward for carrying the G.E. flag are pay offs are called “campaign contributions” made directly by G.E. and their affiliates and”help” from G.E. funded lobbyists.
In 2016 G.E. gave $4,612,315 in “campaign contributions”, ranking G.E. 80th out of 18,544 companies profiled by Open Secrets in campaign contributions a.k.a buying legislators. G.E. paid lobbyists and affiliates $5,295,000 in 2016 ranking it 55th out of 3,651 in lobbyist spending. In 2015 G.E. paid lobbyists a whopping $21,795,000. G.E. does this for one reason, they make money by “giving” campaign contributions and paying lobbyists who have access to Congress.
G.E. makes billions and billions of dollars. G.E. off-shores its billions in profits to avoid paying taxes in the country they started in and where the bulk of their income comes from.
G.E. uses its giant tax refund (remember the 3.1 billion refund between 2008-12) to buy politicians (yes, I do mean buy politicians) through campaign contributions and lobbyists.
G.E. bought-off politicians in Congress write tax code that determines what G.E. will pay or more likely won’t pay in taxes.
G.E. provides lobbyists to support their legislators who regularly rely on G.E. lobbyists to explain the needed tax code changes and in many cases the written code changes, talking points, etc.
It’s estimated that every year U.S. Corporations dodge 90 billion a year in income taxes according to Americans For Tax Fairness. 26 of the Fortune 500 paid ZERO federal taxes from 2008-12. Often the “off-shore” business is no more than a post office box.
We are constantly exposed to the tension between Republicans want to cut Social Security, Medicare, Medicaid, repeal the Affordable Care Act, and extend even more tax cuts to corporations who they say are fleeing America due the horrible tax rates and the untenable regulations.
Our new President subscribes to Trickle Down economics also known as Supply Side economics also the idea behind further tax cuts for corporations was initiated by President Ronald Regan the first to employ this economic policy and it has been used by ensuing Republican Presidents. The gist of this policy is we give tax breaks to the corporations and top 1% and we will see more jobs and more income.
David Stockman, the guy who implemented Trickle Down in the Regan era says it doesn’t work. All of the candidates for President in our recent election regularly stated wages have stagnated for 40 years for the average worker. If Trickle Down performed as advertised why hasn’t the average person seen significant wage gain?
The average person has seen real wages (buying power) increase by 10.4% while corporate CEO’s have seen their wages increase by over 900% in the same time period.
Our own President has used legal (he says) loopholes in our tax code like those used by G.E. and others to avoid paying taxes, writing off losses for many years.
President Trump needs to drain the swamp of the tax code loopholes that prevent corporations like his that profit from being in the U.S. using offshoring and other loopholes to hide their vast wealth from taxes.
Before any cuts to programs for those that can least afford them, the biggest, deepest, and most foul swamp that needs to be drained is the loophole swamp.