From: PAUL JAEHNERT
To:
Subject: Government-Supported Research Enables Their Profits, But Many Corporations Have Nearly Stopped Paying Taxes
Date: Fri Jan 24 01:13:50 MST 2014
Body:
  FYI

Government-Supported Research Enables Their Profits, But Many
Corporations Have Nearly Stopped Paying Taxes

PAUL BUCHHEIT FOR BUZZFLASH AT TRUTHOUT

Multinational corporations have built their businesses on the backs
of American taxpayers. They've depended on government research,
national defense, the legal and educational systems, and our infrastructure.

Yet they've turned around and mocked us with declining tax payments.
They've cut workers. They've refused to invest their massive profits
in job-producing research and development. And they've insulted
existing employees with low wages and dwindling retirement support.

As a final disdainful act, many of them have tried to convince us
that they LOSE money in the U.S. while only making profits overseas.

Here are the facts:

Business Built on Our Backs

(a) Research

The most essential aspect of business growth is the long-term basic
research that is largely  conducted with
http://www.nap.edu/catalog.php?record_id=6323
government money. Starting in the 1950s, taxpayer-funded research at
the Defense Advanced Research Projects Agency (the Internet), the
National Institute of Health (pharmaceuticals), and the National
Science Foundation (the Digital Library Initiative) has laid a
half-century foundation for corporate product development. Even today
http://www.aau.edu/WorkArea/DownloadAsset.aspx?id=11588 60% of
university research is government-supported.

The tech industry is a special case, with many computer and
communications companies coming of age in the 1990s, when industry
http://www.nap.edu/catalog.php?record_id=6323 funding for computer
research declined dramatically and government research funding
continued to climb. As of 2009
http://www.nsf.gov/statistics/infbrief/nsf10329 universities were
still receiving ten times more science & engineering funding from
government than from industry.

(b) Infrastructure

Thanks to the taxpayer-funded National
http://www.usnews.com/usnews/documents/docpages/document_page88.htm 
Highway System, corporations have acquired access to markets across
the country for over 60 years. Along with road construction came the
http://www.tomdispatch.com/blog/175638/ water, electric, and
telephone facilities needed to sustain their businesses.

Today, the publicly supported communications infrastructure allows
the richest 10% of Americans to readily manipulate their
http://inequality.org/wealth-inequality/ 80% share of the stock
market. CEOs rely on roads, seaports
http://www.tompaine.com/articles/2007/04/16/hidden_truths_of_progressive_taxes.php
and airports to ship their products, the FAA and TSA and
Coast Guard and Department of Transportation to safeguard them, a
nationwide energy grid to power their factories, and communications
towers and satellites to conduct online business. Private jets use
http://toomuchonline.org/weeklies2012/mar052012.html 16 percent of
air traffic control resources while paying only 3% of the bill.

(c) Law

A litany of advantages accrues to the business world through the
legal system. The wealthiest Americans are the main beneficiaries of
tax laws, property rights, zoning rules, patent and copyright
provisions, trade pacts, antitrust legislation, and contract
regulations. Their companies benefit
http://www.alternet.org/visions/155149/the_self-made_myth%3A_debunking_conservatives%27_favorite_--_and_most_dangerous_--_fiction_/ 
despite their publicly voiced objections to regulatory agencies, from
SBA and SEC guidelines that generally favor business, and from FDA
and USDA quality control measures that minimize consumer complaints
and product recalls.

The growing numbers of financial industry
http://web.williams.edu/Economics/bakija/BakijaHeimJobsIncomeGrowthTopEarners.pdf  
executives have profited from 30 years of deregulation, most
notably the repeal of the Glass-Steagall Act. Lobbying by the
financial industry has stifled reasonable proposals like a sales
http://www.commondreams.org/view/2011/11/22-6 tax on financial transactions.

More big advantages are enjoyed by multinational corporations through trade
http://www.enotes.com/antitrust-business-corporate-contract-law-reference/antitrust-business-corporate-contract-law 
agreements like NAFTA, with international disputes resolved by the
business-friendly World Bank, International Monetary Fund, and World
Trade Organization. Federal
http://www.salient-news.com/2011/09/dupont-wins-900million-award-in-kevlar-case/>judicial
law protects our biggest companies from foreign infringement. The
proposed Trans-Pacific
< http://www.counterpunch.org/2012/07/06/a-global-attack-by-the-one-percent/ 
Partnership would put governments around the world at the mercy of
corporate decision-makers.

(d) Education

Public colleges have helped to train the chemists, physicists, chip
designers, programmers, engineers, production line workers, market
analysts, and testers who create modern technological devices. At the
primary and secondary levels, the "equal opportunity" principle
mandated by the Supreme Court in Brown vs. the Board of Education has
contributed to business growth, building the math and language skills
that until recently led the world.

(e) Defense

The U.S. government will be spending $55 billion on Homeland
http://en.wikipedia.org/wiki/2013_United_States_federal_budget
Security this year, in addition to $673 billion for the military.
Most of their resources, along with local police and emergency
services and the National Guard, are focused on crimes against wealth.


Belittling Us Instead Of Paying Us Back

Instead of paying for their decades of government-supported growth,
corporations have nearly stopped paying taxes, leaving payroll
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=203 
deductions and individual income taxes as the main sources of federal revenue.

From 2003 to 2011 total corporate profits more
than doubled from $900 billion to almost $2 trillion, but the
corporate http://www.PayUpNow.org/CorpTaxByYear.xls income tax rate
dropped by more than half, from 22.5% to 10%.

On top of this, the most profitable corporations get the biggest
subsidies. The Federal Reserve provided more
http://www.alternet.org/economy/156030/how_the_federal_reserve_is_manipulating_our_kids_into_loving_wall_street/ 
than $16 trillion in welfare assistance to financial institutions and corporations. According to
http://www.ctj.org/pdf/USP-RepTax-Report.pdf U.S Pirg and Citizens
for Tax Justice, 280 top-earning Fortune 500 companies, which
together paid only half of the maximum 35 percent corporate tax rate,
received $223 billion in tax subsidies.

What have they been doing with their windfall profits? Anywhere from $2.2 trillion to #3.4
http://www.bloomberg.com/news/2011-06-29/global-dealmaking-hits-june-bump-as-economic-slump-overshadows-cash-piles.html
trillion in cash is being held by non-financial corporations, who
have chosen to fatten stockholders rather than invest in new
production facilities and the employees needed to make them
functional. Worse yet, as reported by The
Nation, Market Watch, and The Insider, they've been steadily cutting jobs in order to 'streamline' their operations.
http://www.thenation.com/blog/171717/meet-five-ceos-who-prove-lower-corporate-taxes-dont-equal-more-hiring  
http://www.marketwatch.com/story/the-10-biggest-us-corporate-layoffs-of-2012-2012-12-05 
http://www.businessinsider.com/biggest-layoffs-announcements-of-2012-2012-7?op=1
http://www.aflcio.org/Corporate-Watch/CEO-Pay-and-the-99/Corporate-Cash-Hoarding-Holds-Back-Job-Creation

For the employees who remain, average
http://www.un.org/en/ga/second/64/pollin.pdf  real wages were
$17.42 in 2007, down from $19.34 in 1972 (based on 2007 dollars).
Wages as a percentage of the economy are at an all-time low.
   

An Added Insult -- Profits Declared Overseas, But Not in the U.S.

Multinational corporations use the vacuous argument of an excessive
U.S. tax rate to defend their tax avoidance, although in reality the
U.S. has the third-lowest rate of tax revenue per GDP
http://stats.oecd.org/Index.aspx?QueryId=21699
among all OECD countries.

The biggest tax avoiders are not content to just shirk their tax
responsibilities. To sustain the image of profitmaking for their
investors, many of them claim hefty worldwide incomes while reporting
little or no income in the United States.  Pfizer, for example,
http://www.commondreams.org/view/2013/04/03-7  
just declared their fifth straight annual loss in the U.S., despite a
five-year income total of over $50 billion.

A review of < http://www.sec.gov/edgar.shtml>SEC data reveals more
chicanery. In the last two years Citigroup reported $27.8 billion in
foreign income, but a $5 billion loss in the United States. Exxon
credits the U.S. for 1/3 of its revenue and 40% of its assets, but
only 15% of its income. Apple has 2/3 of its employees in the U.S.
but claims only 1/3 of its profits as U.S. income.


Summing Up the Absurdity: You Made Us the Best, But We Don't Have To Pay

http://www.forbes.com/sites/garyshapiro/2012/07/25/is-america-the-greatest-country-in-the-world/
Forbes responded to suggestions of American decline with this stirring
defense: "We lead the world in Internet innovation, music, movies,
biotech and many other technological fields that require
out-of-the-box thinking. From Apple to DreamWorks Studios, from
Amazon to Zynga, we are the world's innovators."

They might have added, "And we don't have to give anything back to
the people who made it all possible."

 
Paul Buchheit is the founder and developer of social justice and
educational websites (UsAgainstGreed.org, PayUpNow.org,
RappingHistory.org), and the editor and main author of "American
Wars: Illusions and Realities" (Clarity Press). He can be reached at
paul@UsAgainstGreed.org .