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There’s Plenty of Money. Really.

Memo Pad Politics

There’s Plenty of Money. Really.

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Don’t think for a second that congressional Republicans sincerely believe draconian cuts in federal spending stimulate the economy.

I know. They uniformly claim that spending cuts spark growth. But consider this.

During the 15-day shutdown of the federal government one and a half years ago, the United States lost some $24 billion in economic activity, according to a 2013 Standard & Poor’s report. Only Texas senator Ted Cruz and the conservative wing wanted the shutdown, while the rest of the Republican Party bore the brunt of cratering public opinion polls.

So when House Budget Committee chair Tom Price, a Georgia Republican, introduced a plan last month to cut more than $5 trillion in spending to balance the budget in nine years, take it for what it is — a purely political ploy to arouse conservatives in preparation for 2016.

The Price plan has no chance of becoming law with a Democrat in the White House, and a slim chance even with a Republican president. In repealing the Affordable Care Act and eviscerating food stamps while allocating tens of billions in defense spending (more than requested), it’s irresponsible. But in calling for the partial privatization of Medicare, it’s politically toxic. Beyond that, a Price plan put into law would be downright destructive. Sucking that much money out of the economy could possibly trigger, at the very least, another painful recession.

Still, congressional Republicans will continue to make believe that spending cuts are good for everyone, because like all make-believe stories, the Price plan has the advantage of sounding plausible. And because it sounds plausible, it feels persuasive to many voters. After all, growth is sluggish. Wages are flat. There isn’t enough money. It’s time to get serious and cut. That’s why Price titled his plan “A Balanced Budget for a Stronger America.”

In fact, there is enough money. Always has been. The trick is looking beyond one class of taxpayer dutifully paying its fair share to another class with the power, and the privilege, of avoiding paying its share.

According to a new report by Citizens for Tax Justice (CTJ), 304 of the 500 top U.S. corporations stashed more than $2 trillion in profits in offshore accounts in 2014, avoiding as much as $600 billion in U.S. taxes.

Among these are the most popular American brands: Apple, Nike, Microsoft, Safeway, and Clorox. These are among just 28 of the top 500 companies to report the tax rate they would pay if they had repatriated profits to the U.S. The rest didn’t bother. They don’t have to report.

But even those reporting to the IRS were probably lowballing their total U.S. tax liability. If they said they earned their enormous profits in tax havens, they probably didn’t, because the countries that shelter the money, like Bermuda or the Cayman Islands, don’t have economies that can produce such enormous profits. Those profits can only be earned in countries with robust economies like the U.S.

Furthermore, the foreign tax rate they paid was far lower than the tax rate they would have paid in the U.S. Indeed, the 28 firms bothering to tell the IRS what they would have paid in U.S. taxes paid a foreign tax rate of about 10 percent on a total of $470 billion. You almost certainly paid a higher percentage on less income.

Ironically, the offshoring trend has grown since the economic collapse of 2008, the very event Republicans cite when calling for more and deeper spending cuts. The CTJ survey found 77 firms increased their caches by at least $500 million while another seven U.S. companies — Apple, General Electric, Microsoft, IBM, Google, Oracle, and Gilead Sciences — piled high their cash hoards with more than $5 billion.

The trend is poised to become permanent. CTJ researchers report an acceleration of what’s known as “corporate inversions,” meaning American firms reincorporate in foreign countries to avoid paying most or all taxes on profits earned in the U.S.

And — no surprise here — the firms with the most money overseas are the first to lobby Congress to avoid paying taxes on that money. To stop this vicious cycle, CTJ researchers recommend putting an end to something called “deferrals,” an SEC rule that incentivizes tax sheltering. Then all profits earned by U.S. corporations anywhere in the world would be subject to U.S. taxes in the year they were earned.

The CTJ report does more than offer advice on creating a more equitable tax code. It reminds us that the frame of our budget debate is much too narrow. It is typically limited to spending, not revenues, much to the benefit of Republicans, while Democrats are left complaining about the unfair treatment of the middle class.

But the CTJ report does something else, something its authors don’t come right out and say. Our very narrow budget debate is as much about patriotism and national character as it is about justice and fiscal responsibility. Or at least it should be.

Billions and billions are hidden overseas while the rest of us are forced to fight over crumbs. That’s degrading and undignified but also unpatriotic. Prosperity is not only for the very few with the power to enjoy it. This isn’t feudal England.

This is America.

Photo: Brook Ward

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34 Comments

  1. Dominick Vila April 14, 2015

    One of the easiest ways to destroy an economy is austerity, particularly when an economy depends on consumer spending to survive. I support the elimination of unnecessary spending, often caused by duplication, poor management, or ill conceived policies. Unfortunately, that is not what the GOP is proposing. The dismantling or privatization of Social Security and MEDICARE, for example, would have a huge negative impact on the economy as millions of senior citizens are deprived from their livelihoods or become dependent on welfare to survive. The latter would result in increase government outlays and higher deficits, not to mention the disintegration of the American society and a dramatic lowering of our standard of living.
    Reducing spending to offset irresponsible tax breaks, and loopholes designed to help those who already own most of our national wealth accumulate more wealth on the backs of our most vulnerable citizens, is not only immoral and inhumane, it is reckless from an economic perspective.

    Reply
    1. latebloomingrandma April 14, 2015

      Yes, Romney comes to mind.
      I always like Joe Biden’s comment–(paraphrased) Show me your budget and you’ll show me what you value.

      Reply
  2. Eleanore Whitaker April 14, 2015

    Most Americans pay taxes on the gross incomes they earn. Not the 1%. They first look for special privileges like loopholes to reduce the amount of taxes they are supposed to pay. That’s really what’s so wrong with the tax code in the US. The premise has long been held that the rich should not be penalized for their wealth by having to be taxed on their actual annual earnings. Big big big mistake.

    That premise immediately divides and conquers. The poor and middle classes are forced to fill in the gaps left by the wealthiest who don’t pay according to their annual gross incomes like the rest of us do.

    This is where the path to income inequality begins. The devil with wealth is ALWAYS in the details. Did a single one of these 1% richest earn that wealth without employees? Consumers? Tax exemptions? Tax Subsidies?

    Perhaps, the worst ruse is not just the annual incomes of the wealthiest who pay far less than they are supposed to in taxes but the accompanying corporate loopholes, exemptions and subsidies they also take advantage of.

    Austerity is caused by greed of those who expect others to work for dirt wages while they enhance their profits from the blood, sweat and tears of employees. It’s caused by a sense of entitlement to wealth not earned wholly autonomously. Austerity is caused by the greedy who jack prices on their goods and services to such levels that consumers have to choose between eating or keeping a roof over their kids heads.

    But, the worst of this nasty filthy trick is when these same greedy people have the gall to accept tens of billions in tax dollars to keep them in business. When more than 50% of your taxes end up in the hands of corporations, who then take those tax dollars and hand it to their CEOs, who then ship that offshore, how is that not creating a monster ripe for mass revolt?

    Reply
    1. Allan Richardson April 14, 2015

      Even Henry Ford, who was not exactly a raging liberal, knew that his plan to sell millions of cars required millions of workers who could AFFORD TO BUY cars. So he set the example by paying his own workers more than the going rate for the day, which caused other industrialists wanting to hire from that labor force (some of whom criticized him for it) to have to bring the “going” rate up a little.

      But life did not become really good for the majority of Americans until unions were legally recognized, the minimum wage, Social Security, AFDC (aka “welfare”), Workers Compensation, wage and hour laws, and other New Deal programs, AND the increased spending forced by the war (and continued afterward because of the Cold War), gave us the greatest period of prosperity.

      But since “conservatives” who want to lay waste to much of America and most Americans have been pushing their FEUDAL system since 1980, we have been going back to 1929. In fact, 2007-2009 would have been WORSE than 1929 if the programs they want to eliminate had not been in place already, which they were not in 1929.

      Reply
      1. charleo1 April 14, 2015

        Money has become all about power. And the 1% want to control all of it. If that’s democracy, freedom, liberty, and the new American way, I’m a Republican. If not, I’m something else.

        Reply
      2. Eleanore Whitaker April 14, 2015

        Your post is excellent.

        Conservatives hate government, hate laws and regulations and want a free-for-all to do as they please. But, let’s not fool ourselves about one thing…what they hate most of all is their inability to force us all into labor camps they control. They loathe the idea of any citizen protection. They just don’t admit it.

        I attended a Libertarian meeting in 2003. I was a Republican from 1966 to 2004. I’d had enough of the bossy, self-important, big mouth GOP bulls. I had hoped that the Libertarian Party would be different.

        It was WORSE. It was more cult like than political party and their entire premise was to not have to pay any taxes. When I asked how then they planned to repair roads and bridges, I may as well have stepped on their testicles for the looks I got for asking what I considered a simple question. I was only one of 3 other women in what was supposed to be an open Libertarian meeting for the purpose of attracting new members. No thanks.

        All of the men in the room were not remotely middle class. Most had reputations in business that weren’t exactly honorable or possessing of integrity. I left with the impression that it was a frat boys clubs that had no intentions of doing anything but tearing down government.

        Reply
      3. ralphkr April 15, 2015

        According to Ford upper echelon at the time he raised the worker’s pay it was to eliminate the constant turnover of the work force. Before he increased the pay scale he was paying a hefty amount training new workers & losing productivity because of new workers fumbling on the line but after the wage increase he had a stable work force, productivity increased, and profits went up to all new levels.

        Reply
  3. Frank KIng April 14, 2015

    Money has been sucked out of the economy. It is the goal of trickle down economics conceived during the Reagan administration and still a work in progress by the right wing to insure money flows to the top and away from the rest of us. Anyway, conservatives always believe the poor have too much money and the wealthy never have enough. Just how long the nation can exist in an economy based on greed and galactic profiteering to enrich the few is based on just how long the voters of this country keep returning to power the right wing who exercise greed and profit over the best interests of the nation and its people. America is in decline in all facets of endeavor and no way to stop it. .

    Reply
  4. Mortalc01l April 14, 2015

    Same as it ever was; the rich not only get to live by their own rules, while the rest of us peasants are punished by the law if we dare to deviate; but these days, the rich have their own version of the Mafia, that strong arms and blackmails our purported representatives in Congress and the House – they’re called “lobbyists” but we all know that they are really the bribery and corruption arm of Corporate America.

    The rich and the Corporate rulers of this country have taken all the power from “We The People” – The USA is a literal serfdom, ruled by the rich and powerful and we have little to no say in anything and even less power.

    Billionaires and Corporations pay nothing in tax and the rest of us peons pay 34%.

    Reply
  5. darkagesbegin April 14, 2015

    if Libertarians are so eager to do away with all the “social” spending, they should be enthusiastic about supporting paying all workers a more than generous living wage so that tax dollars will not be needed for such programs

    Reply
  6. Whatmeworry April 14, 2015

    The avg family now owes $650,000 thanks to this reckless spending. What do we have to show for it? Better roads, better education, stronger military, better HC. Nope all we got was more illegals and record numbers on the dole

    Reply
    1. Whatmeworry April 14, 2015

      The avg family now owns $650,000 thanks to this reckless savings. What
      do we have to show for it? Better roads, better education, stronger
      military, better HC. Nope all we got was more illegal holy wars against Islam and record
      numbers on the dole

      Reply
      1. Daniel Jones April 15, 2015

        Still BS, and your lies are still called out.

        Reply
        1. Whatmeworry April 15, 2015

          Of course, I lie about everything

          Reply
          1. ralphkr April 15, 2015

            Of course, Whatmeworry, we all know that what ever you post is a lie, usually unbelievably ridiculous ones, with the one notable exception being when you post that you lie.

            Reply
    2. But Whatmeworry (Dan M Ketter) you never served in the military,
      and dodged the Vietnam War draft by hiding out in College like a
      coward, sort of what Bill Clinton did. You’re caring about veterans military is
      nothing but blind patriotism and trying to fitting in with us
      republicans, which you are not. We don’t don’t need moronic white anglo
      saxon protestants wannabe’s like yourself to continue contaminating our
      party.

      Also, please quit impersonating yourself as a retired Air
      Force Colonel (you know what I mean) on one of your facebook pages, as
      you never served as officer or enlisted, just a WASP non-union flunkee
      desk clerk who was on Ford Motors payroll for 30 years.

      Reply
    3. dpaano May 15, 2015

      Gosh, if I remember correctly, it was the GOP who voted against putting money into fixing the infrastructure, and they are the ones that keep taking money away from education in each of the states that have GOP governors. As for the military, we have one of the strongest military’s in the world….not sure what you’re talking about. Healthcare is doing well with Obamacare…..11M people have signed up and are mostly happy about it…..even Ted Cruz! And, you might want to think about WHY we have more people “on the dole.” The fact that the GOP has taken away monies from food stamps, welfare, unemployment insurance, etc., might have a few things to do with it. They also haven’t done much for the job market either despite their big Job plan they pushed in 2012!

      Reply
      1. Whatmeworry May 15, 2015

        Your memory is bad there wasn’t any $$ left after Barak and the dem,’s ran up a $10T in red ink. Not to mention that only 60% of every dollar generated from the gas tax goes to roads the balance is squandered on mass transit and bike paths

        Reply
        1. Whatmeworry May 16, 2015

          No, my memory is bad there was many $$ left after Barak and the dem,’s saved up a $10T in black ink. Not to mention that only 90% of every dollar
          generated from the gas tax goes to roads the balance is spent well on
          mass transit and bike paths

          Reply
          1. dpaano May 18, 2015

            Wow, are you so senile that you have to repeat things over and over again before you can actually believe what you’re saying?

            Reply
          2. Whatmeworry May 18, 2015

            Huh?? I dont chew my tobacca twice

            Reply
      2. Whatmeworry May 16, 2015

        My memory is bad there was many $$ left after Barak and the dem,’s saved up a $10T in black ink. Not to mention that only 90% of every dollar generated from the gas tax goes to roads the balance is spent well on mass transit and bike paths

        Reply
      3. Whatmeworry May 16, 2015

        Your right you don’t remember correctly. Rather than repaid the infrastructure Barak and the dem’s wanted to continue to throw good money after bad for mass transit and bike paths.
        There is no correlation to spending and education. The avg college freshman reads at a 8th grade level
        11M have signed up and 4M have said that they can’t pay for any services.
        Food amp spending has DOUBLED under Barak, heck you no longer have to work to get welfare Barak placed a moratorium on it.
        The GOP has sent the Senate OVER 80 bills to create jobs. Harry Reid would never allow any to come up for a vote

        Reply
        1. Whatmeworry May 16, 2015

          Your right I don’t remember correctly since i’m a moron. Rather than repaid the
          infrastructure Barak and the dem’s should continue to spend good
          money for mass transit and bike paths.
          There is a correlation to spending and education. The avg college freshman reads at a 9th grade level11M have signed up and 4M have said that they can’t pay for any services.
          Food amp spending has not DOUBLED under Barak, heck youhave to work to get welfare Barak placed a moratorium on it.
          The GOP has sent the Senate OVER 80 bills to export jobs. Harry Reid would never allow any to come up for a vote

          Reply
      4. Whatmeworry May 16, 2015

        Your right I don’t remember correctly. Rather than repaid the
        infrastructure Barak and the dem’s should continue to spend good
        money for mass transit and bike paths.
        There is a correlation to spending and education. The avg college freshman reads at a 9th grade level
        11M have signed up and 4M have said that they can’t pay for any services.
        Food amp spending has not DOUBLED under Barak, heck youhave to work to get welfare Barak placed a moratorium on it.
        The GOP has sent the Senate OVER 80 bills to export jobs. Harry Reid would never allow any to come up for a vote

        Reply
        1. dpaano May 18, 2015

          First of all, money from gas sales goes to the individual state, not to the Federal Government (although there is also a tax that goes to the government….it’s minimal). Secondly, whose fault is it that our college students can’t read…..if I remember right, it’s the GOP Governors who are taking money away from schools, not the Federal government. Thirdly, not sure what you’re talking about the 4M who say they can’t pay for services….might want to explain that in more detail. Fourthly, it was the GOP House that decided to put a moratorium on welfare…..not the president. They also took money away from unemployment insurance, food stamps, etc. And, lastly, if the GOP had sent CLEAN bills to Harry Reid, maybe some of them would have come up for votes, but the House likes to insert little “surprises” in their bills like trying to keep Lynch from being approved for the Justice Dept. job. They tried to stick that one in as an ultimatum to the government to fund another very important bill. So, until the House stops putting in their little tidbits in the bills, they’ll sit on Reid’s desk and wither!!! Don’t blame the Democrats OR our president for that trick….it’s all on you!

          Reply
          1. Whatmeworry May 18, 2015

            Money from gas sales geos into baraks wallet

            Reply
  7. atc333 April 15, 2015

    So, why don’t the powers that be in the Democratic party begin a concerted effort to educate the American voters instead of doing the same thing over and over again in elections. The GOP fiscal record since Reagan is a joke, great for the top 3%, but a disaster for the 97% Spend time and money reaching out and educating the 47% as to the failures of the Party of Greed, Oligarchy, and Profit’s economic agenda, and they will get out and vote. After all, aren’t the ten poorest states in America all Red States?

    Reply
    1. dpaano May 15, 2015

      I agree….the Democrats that run for offices fail to bring these things up when they are campaigning. IMO, this is why they failed to win in the midterm election….they chose to not support our president and not let their constituents know exactly what good this party has done since he has taken over the reins!!! The Democratic candidates need to be more vocal and tell the people the truth about what’s going on…..otherwise, they listen to the GOP, who use lies and scare tactics to keep their base in line!!!

      Reply
  8. paulyz April 15, 2015

    So the Democrats admit they DON’T want to balance the budget according to this article, but blame the wealth of others instead of their failed policies. Of course many of us understand why they don’t want a balanced budget, because that would severely curtail their deficit spending for votes, by promising more stuff to voters. Then, to diffuse their tactics, they blame the wealth of others.

    Reply
    1. dpaano May 15, 2015

      Pauly….I’m not sure what exactly you man about “promising more stuff to voters.” I’ve never been offered anything to vote, and I don’t think anyone else has either. As for the deficit….it has gone down significantly since President Obama took over, but I guess you don’t consider that, right?

      Reply
  9. pm1 April 21, 2015

    Damn straight! When R’ cons claim to love this country, what they really mean is they love this country’s money. And, nothing more. There is nothing these faux patriots love more than money. Money is their God. Family, faith, and especially America, are far down on the list of things repuplicons claim to care about. Money. Greed. Self. These are the things republicons revere and love more than anything else.

    Reply
  10. Jasmine An'deez May 3, 2015

    Don’t be fooled, folks: Obamacare isn’t about more choices and lower prices, it’s about fewer choices and higher prices.

    Reply
  11. dpaano May 15, 2015

    What’s extremely upsetting is that all of these corporations use our infrastructure; i.e., railroads, roads, bridges, etc. to ply their products, but it’s the middle man who pays for these! Unfortunately, we can’t even upgrade our infrastructure because the Republicans don’t want to spend the money, but they’ll be the first to complain if something serious happens to disrupt their businesses!!!

    Reply

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