I sent my tax information to my CPA last week. I wait anxiously to find out whether I will be depressed because I owe additional money or will rejoice because I receive a refund.
G.E., America’s largest corporation, already knows the answer about its tax bill for the year past. Its business was booming in 2010, earning $14.2 billion. So what will G.E. have to pay to the government for its excellent financial performance? Well, actually, it is claiming that it doesn’t owe anything at all. In fact, it is asking for a $3.2 billion refund.
I’ll write that again.
On its more than $14 billion profit, G.E. expects to pay not one cent but rather expects the IRS to refund more than $3 billion.
The NY Times’ David Kocieniewski writes, “[G.E.’s] extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore.”
I wish I had G.E.’s acumen and resources. I don’t know how to shelter my income in an offshore account. Neither can I afford to employ lobbyists to help write laws that favor my family and me. And I can’t pay the high fees of a tax law firm staffed with former Treasury officials to help me take advantage of tax loopholes no matter how obscure.
So I pay the taxes I owe while G.E. owes nothing.
Some call this fair. It is many things, but being fair isn’t one of them.
One thing that it is is being a symptom of the continued upward redistribution of wealth in the US.
I think it is the widening and yawning gap in wealth distribution that underlies much of the anxiety in American society. There is a lot of anger, as many are caught between disappearing jobs and heavy taxes. Unfortunately, the anger is often misdirected—at immigrants, at the professional class, at people of color, at liberals.
Lobbyists and public relations firms employed by big corporations have written a script that many Americans have accepted. The main antagonist in this drama is government. The script tell us that government is too big, too rapacious, too inefficient, too staffed with bureaucrats interested only in protecting their own interests. As the story unfolds, we learn that teachers and others on government payrolls are the villains, as are Spanish-speaking immigrants and liberals who want to take away guns so we can’t protect ourselves. (Thirty years ago, when Ronald Reagan read the first draft of the corporate script and declared government as the problem, not the solution, air traffic controllers and welfare queens were the enemies.)
In this unfolding drama, to the rescue of newly marginalized ride anti-government politicians, ready to bust public service unions, the last bastion of organized labor and put an end to all the foolishness about raising taxes on the wealthy and corporations.
The storyline has seeped into the pores of the very people who are being squeezed to the edges of poverty. And instead of electing those who stand with the working people, support unions and want a progressive tax system, there are more, not fewer, politicians in Washington and state houses today who do the ideological bidding of corporate America.
The argument big business has made is that when business is set free from government’s hand, it will be free to create more jobs for the American public. Through the 1950s and much of the Cold War era, the argument seemed valid enough. According to NY Times columnist Bob Herbert, income distribution was more equitable than today, with “the top 10 percent of families accounting for just a third of average income growth, and the bottom 90 percent receiving two-thirds.”
America’s middle class was expanding in that era. By 2009, though, the picture was very different. “The richest 5 percent,” Herbert writes, “claimed 63.5 percent of the nation’s wealth. The overwhelming majority, the bottom 80 percent, collectively held just 12.8 percent.”
There are two moral arguments against the upward redistribution of wealth. The first is the rank unfairness of a system in which a few reap benefits beyond imagination and expect others to pay taxes to keep the system afloat.
The second moral argument is that if the present trend continues, we will be left with a system that begins to take on the contours of modern-day feudalism, a feudalism not in the service of inherited gentry but in the service of transnational corporate power. Democracy will be hollowed out, leaving the mechanisms of parties and voting, but within the context of a system manipulated by a few who command limitless wealth to shape outcomes to their advantage.