Sunday, April 29, 2012

Mostly, it's the schlemiels paying tax

Many working stiffs watch a third and more of every extra dollar earned disappear as income tax. Then, we're hammered again with user fees and consumption taxes when we spend shrunken dollars to buy goods at prices far higher than what our neighbours pay for the same items south of the border.

A prime reason that ordinary folks feel financial pain is that multinational corporations and global capitalist jet setters don't pay much in the way of tax. Analysts predict Apple could earn over $45 billion this fiscal year, which would be an American business record. Despite incredible wealth, across the world, Apple will pay a minor fraction of its profits in taxes.

How Apple Sidesteps Billions in Taxes, Charles Duhigg and David Kocieniewski, New York Times, Apr. 28, 2012
"...Setting up an office in Reno is just one of many legal methods Apple uses to reduce its worldwide tax bill by billions of dollars each year. As it has in Nevada, Apple has created subsidiaries in low-tax places like Ireland, the Netherlands, Luxembourg and the British Virgin Islands — some little more than a letterbox or an anonymous office — that help cut the taxes it pays around the world...

"...Apple was a pioneer of an accounting technique known as the “Double Irish With a Dutch Sandwich,” which reduces taxes by routing profits through Irish subsidiaries and the Netherlands and then to the Caribbean. Today, that tactic is used by hundreds of other corporations — some of which directly imitated Apple’s methods, say accountants at those companies..."
Of course, businesses typically do not pay consumption taxes like Canada's HST, so the total tax bills of large corporations may be a tiny fraction of each sales dollar, particularly if business is conducted across national borders.

Little wonder the average CEO pay of companies in the S&P 500 Index rose to $12.94 million in 2011. Overall, the average level of CEO pay in the S&P 500 Index increased 13.9 percent in 2011, following a 22.8 percent increase in CEO pay in 2010


Of course, among the one percenters, tax avoidance is a long established habit. The Guardian revealed this month that British Prime Minister David Cameron's father set up offshore investment funds which explicitly boasted of their ability to remain outside UK tax jurisdiction.

Cameron family fortune made in tax havens, Ed Howker and Shiv Malik, The Guardian, April 20, 2012
"...the dramatic growth of such offshore financial activity has raised concerns that national tax authorities are struggling to pin down the world's super-rich.

"Ian Cameron took advantage of a new climate of investment after all capital controls were abolished in 1979, making it legal to take any sum of money out of the country without it being taxed or controlled by the UK government.

"Not long after the change, brought in by Margaret Thatcher after her first month in power, Ian Cameron began setting up and directing investment funds in tax havens around the world..."
Cardinal accuses David Cameron of 'immoral' behaviour and favouring rich, Shiv Malik, The Guardian, Apr. 29, 2012
"One of Britain's most prominent religious figures, Cardinal Keith O'Brien, has attacked David Cameron for immoral behaviour and for favouring rich City financiers ahead of those struggling on lower incomes.

"Speaking to the BBC, O'Brien, Scotland's most senior Roman Catholic authority, said: "The poor have suffered tremendously from the financial disasters of recent years and nothing, really, has been done by the very rich people to help them.

"I am saying to the prime minister, look, don't just protect your very rich colleagues in the financial industry, consider the moral obligation to help the poor of our country."
Harold Meyerson, an American journalist and opinion columnist, was named one of "the most influential commentators in the nation" by the Atlantic Monthly in 2009.

Editor-at-large of The American Prospect, he wrote Business is Booming in which he argues that leading American corporations have found a way to thrive even if the American economy doesn't recover. Meyerson warns, "This is very, very bad news."
"When he was CEO of General Electric, in 1998, Jack Welch pithily summarized his vision for corporate America: "Ideally, you'd have every plant you own on a barge to move with currencies and changes in the economy."

"Since then, corporations have discovered that they don't need barges in order to unmoor themselves from the American economy. As corporate profits skyrocket, even as the economy remains stalled in a deep recession, Americans confront a grim new reality: Our corporations don't need us anymore. Half their revenues come from abroad. Their products, increasingly, come from abroad as well..." continue reading
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5 comments:

  1. This is scary stuff, happening right under out noses, while we wonder why we can never get ahead.

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  2. That's the whole point...the suckers are not supposed to get ahead. You and I pay for infrastructure and all the major things that taxpayers, are on the hook for. Ideally everyone should be their own corporation. It makes more sense every year. Governments love it. The little guy is a "captive" tax machine, the more you make, the worse off you are.

    The system, devised by and maintained by the rich, is truly broken...just ask your MLA or MP. Can they fix this...sure they can, will they...not likely...power in the hands of a few, corrupts everyone. As long as your a working stiff, or small business owner, you will be "milked" for all its worth. What will eventually change this? We had a perfect opportunity, in the last financial crash. The powers at be, did nothing but protect their own intrests. Will it happen again...you bet...greed is the prime motivator, along with risk.

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  3. The NAME registered on your CERTIFICATE OF BIRTH is your corporate agent in commerce not your name as given to you by your parents.

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  4. It's kind of like. In yesteryear the coal miners, were forced to buy their goods at the company store. They paid three times as much as the other stores. The owner of the coal mines, got all their money back and then some. The miners said, they owed their souls to the company store. There is even a song about it by, Tennessee Ernie Ford. 16 Tons and what do you get? A few days older and your deeper in debt.

    Sounds like most Canadians to me. We see our tax dollars thieved and misused. Then the governments lay more taxes on us, to pay for the governments corruption and thefts.

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  5. Just another little oversight...the Conservatives (the Cons) apparently "bailed" the banks out, to the tune of 114 Billion dollars during the financial crisis. Seems CMHC now has to be placed under another government watchdog.

    We were told, all throught the "ongoing" financial crisis that Canadian banks were solid, profitable institutions. What happened?
    Seems the "Cons" have not been "up front" with the "real" story. Now, every man, woman and child in this country, owes $3400...used to prop up our "profitable" banking system.

    Feel ripped off yet? There's more. Not even a hint of any sort of repaying the treasury or the taxpayers. I am quite sure if the banks had to loan this type of money, it would have to be paid back, on time and with intrest. In addition, the 60 billion dollar defict Flaherty keeps crying about, probably is a fair chunk of the bail out.

    Seems the new "free enterprise mantra" extends to Canada as well as the states....
    "Privatize Profits but Socialize Losses".
    What happened to "capitalism" as being the be all and end all...obviously the fix has been in for a long time, folks. Bank profits? We are doing just fine. Thanks for the bail out, now run along and keep paying those taxes...suckers.

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