Government must stop doling out ever-larger tax breaks to the superrich and vast corporations.
April 4, 2011- Have you heard? America is broke, according to many governors and lawmakers.
They’re calling for deep cuts in teacher pay, firing cops, slashing medical services for working-class kids, and scrapping other essential services to narrow state and federal budget deficits.
There’s a better and fairer way to tackle this situation. Government must stop doling out ever-larger tax breaks to the superrich and vast corporations.
Around the country, states and towns are gutting their budgets, undermining the quality of our lives.
“Our country is not really broke,” said Cynthia Carranza who directs a food pantry in Niles, Illinois. Carranza witnesses the growing number of hungry people at her food pantry door even as government support for her program is slashed. “We’re an incredibly rich and prosperous nation. But our wealth is skewed to a very few fortunate at the top. We’re not broken, just twisted.”
Our communities are enduring mammoth state and federal budget cuts because we have, in large part, failed to sufficiently tax America’s millionaires and billionaires or prevent aggressive tax avoidance by multinational companies. The rest of us are paying to pick up the slack.
Congress has blown holes in our tax code, losing hundreds of billions in revenue. Worse, lawmakers have averted their eyes as corporate lobbyists drill new tax loopholes and extract new corporate welfare subsidies.
How else can we explain how a profitable company like General Electric pays no taxes? Since 2006, General Electric has reported over $26 billion in profits, yet paid not one penny in U.S. taxes. It gets worse. They’ve actually received more than $4 billion in subsidies and corporate welfare.
GE isn’t alone. Other huge global companies such as Verizon, Boeing, ExxonMobil, and Bank of America also pay no taxes. These artful dodgers aggressively solicit government subsidies and use accounting tricks to move money to overseas tax havens like the Cayman Islands. They pretend to earn their profits offshore and then report their paper losses here in the United States–so they don’t have to pay the IRS a dime.
Wealthy individuals have also benefited from a half-century of tax reductions. If U.S. millionaires and billionaires paid taxes based on 1961 tax rules, we would have raised an additional $231 billion in federal revenue this year.
By reversing years of tax giveaways to America’s rich and the corporations that enrich them, Congress could raise trillions in revenue. We could fund the public structures that safeguard our families and our future.