Corporate America's Tax Scheme: 'Lobby More, Pay Less'

Tuesday, April 17, 2012 by Common Dreams
Top eight companies that spent the most on federal lobbying saw greatest drop in tax rates

A recent report released by the Sunlight Foundation found that of the 200 wealthiest U.S. companies, those who spent the most on lobbying in Washington saw the greatest reduction in reported tax rates between 2007 and 2010.

The top eight biggest spenders of the group between 2007 and 2009 saw the most unanimous tax benefits between 2007 and 2010, showing how money buys extreme tax leniency, with financial gains well into the billions.

"If you think you wound up paying too much in taxes this year, maybe you ought to hire a lobbyist. Or two. Or 20. After all, it’s a strategy that seems to be working well for some of the nation’s biggest corporations," the foundation states.

* * *

Sunlight Foundation: Lobby more, pay less in taxes

Combined, the Big Eight spent $540 million on lobbying between 2007 and 2009. In total, they filed 332 lobbying reports that mentioned taxes, naming 491 different tax bills over the three-year period we investigated. [...] 

Compared to what their taxes would have been if their 2007 tax rates were applied to their 2010 income, we estimate that these eight companies saved a combined $11.2 billion on $120 billion in reported 2010 profits. If we assume that the entire reduction was due to their lobbying, the return on investment would be 2,069%. Of course, this is probably not the case. Without a detailed analysis of these companies’ taxes, it would be impossible to tell why their rates fell. But we can observe that it is very unlikely that the eight companies that lobbied the most between 2007 and 2009 all would have seen such significant drops in their tax rates by random chance alone. [...] 

Taking the 200 companies as a whole, we estimate that for each additional $1 million that companies spent lobbying between 2007 and 2009, their 2010 tax rate fell by 7/100ths of a percent. While that might not sound like much, for a $2.5 billion company at the median in our sample of large companies, each $1 million spent on lobbying translates into an estimated annual tax savings of $1.8 million – almost double the original investment, with benefits likely to continue in the future. [...] 

When it comes to paying less in taxes, having an army of lobbyists appears to be helpful. Many companies lobby on taxes, but those who spend the most report the largest and most consistent declines in tax rates.

Table 1. Changes in reported tax rates:

Company	2007-2010 decline	2007 rate	2010 rate	2007- 2009 lobbying (in millions)	Estimated tax reduction (in millions)
Exxon Mobil	-1.1%	41.8%	40.7%	$81.92	-$565.32
Verizon Communications	-7.9%	27.4%	19.4%	$77.58	-$1,005.51
General Electric	-7.6%	15.0%	7.4%	$73.17	-$1,082.70
At&T	-40.4%	34.0%	-6.4%	$70.96	-$7,359.95
Altria	-1.6%	28.9%	27.4%	$63.31	-$160.66
Amgen	-7.1%	20.1%	13.0%	$58.33	-$377.16
Northrop Grumman	-11.4%	32.9%	21.5%	$57.56	-$296.08
Boeing	-7.1%	33.7%	26.5%	$56.99	-$321.5
Median among 200 companies	-0.6%	31.8%	31.6%	$5.48	-$13.08

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Huffington Post: Corporations That Spent The Most On Lobbying Saw Tax Rates Decline: Report

The report notes that these top eight firms spent $540 million on lobbying from 2007 to 2009. They filed 332 lobbying reports that mentioned taxes and named 491 different tax bills in those reports. 

The top eight companies that spent the most on lobbying were Exxon Mobil, Verizon Communications, General Electric, AT&T, Altria, Amgen, Northrop Grumman and Boeing. Exxon Mobil spent the most, some $81.92 million from 2007 to 2009. 

AT&T recorded the largest tax reduction, with its tax rate falling from 34.0 percent to negative 6.4 percent from 2007 to 2010, or an estimated reduction of more than $7.3 billion. Altria, the parent company of Philip Morris, had the smallest decline from 2007 to 2010, with its rate declining from 28.9 percent to 27.4 percent. Six of the top eight companies saw declines of at least 7 percentage points. 

The report comes as both President Barack Obama and Republican Party's presumptive nominee, Mitt Romney, have proposed lowering corporate tax rates. Obama has proposed lowering the corporate tax rate from 35 percent to 28 percent but eliminating loopholes and deductions. American manufacturers would get a bigger tax cut, having an effective rate of no more than 25 percent. 

Romney has proposed cutting the corporate tax rate to 25 percent and repealing the corporate alternative minimum tax.

ALEC Disbands Task Force Responsible for Voter ID, 'Stand Your Ground' Laws

Tuesday, April 17, 2012 by The Nation
by John Nichols


Pressured by watchdog groups, civil rights organizations and a growing national movement for accountable lawmaking, the American Legislative Exchange Council announced Tuesday that it was disbanding the task force that has been responsible for advancing controversial Voter ID and “Stand Your Ground” laws.

ALEC, the shadowy corporate-funded proponent of so-called “model legislation” for passage by pliant state legislatures, announced that it would disband its “Public Safety and Elections” task force. The task force has been the prime vehicle for proposing and advancing what critics describe as voter-suppression and anti-democratic initiatives—not just restrictive Voter ID laws but also plans to limit the ability of citizens to petition for referendums and constitutional changes that favor workers and communities. The task force has also been the source of so-called “Castle Doctrine” and “Stand Your Ground” laws that limit the ability of police and prosecutors to pursue inquiries into shootings of unarmed individuals such as Florida teenager Trayvon Martin.

The decision to disband the task force appears to get ALEC out of the business of promoting Voter ID and “Stand Your Ground” laws. That’s a dramatic turn of events, with significant implications for state-based struggles over voting rights an elections, as well as criminal justice policy. But it does not mean that ALEC will stop promoting one-size-fits-all “model legislation” at the state level.

Pressure by CMD, civil rights groups such as the NAACP, the Urban League and ColorOfChange and good government organizations such as Common Cause and People for the American Way—which have expressed concern with ALEC’s meddling in public safety and democracy debates at the state level—has in recent weeks led to decisions by Coca-Cola, Pepsi, McDonald’s and other corporations to drop their affiliations with ALEC.

Indeed, the disbanding of the “Public Safety and Elections” task force looks in every sense to be a desperate attempt to slow an exodus of high-profile corporations from the group’s membership roll.

Anger over initial failure of Florida police and prosecutors to address Martin’s shooting led to an intense focus on the state’s “Stand Your Ground” law, and on the role of ALEC and the National Rifle Association in passing similar laws in states across the country.

That expanded interest in ALEC, a conservative “bill mill” that has been under scrutiny since the Center for Media and Democracy and The Nation launched the “ALEC Exposed” project last summer.

Pressure by CMD, civil rights groups such as the NAACP, the Urban League and ColorOfChange and good government organizations such as Common Cause and People for the American Way—which have expressed concern with ALEC’s meddling in public safety and democracy debates at the state level—has in recent weeks led to decisions byCoca-Cola, Pepsi, McDonald’s and other corporations to drop their affiliations with ALEC.

In many cases, the corporations that have quit ALEC have suggested that—while they were comfortable working with the right-wing group in order to advocate on behalf of tax and regulatory policies that are favorable to their business interests—they are ill at ease being drawn into debates about issues such as voting rights and gun control.

ALEC’s decision to disband the Public Safety and Elections task force—which worked on those issues—cannot be seen as anything other than a response to the pressure the group has felt as high-profile corporate members have been quitting it on an almost daily basis.

While the group is not acknowledging as much, its statement on the disbanding of the task force speaks volumes.

“We are refocusing our commitment to free-market, limited government and pro-growth principles, and have made changes internally to reflect this renewed focus,” announced Indiana State Representative David Frizzell, ALEC’s national chairman. “We are eliminating the ALEC Public Safety and Elections task force that dealt with non-economic issues, and reinvesting these resources in the task forces that focus on the economy.”

While this is a dramatic development in the struggle to expose and challenge ALEC’s one-size-fits all assault on local and state democracy, it should be remembered that ALEC remains a prime proponent—via task forces working in other areas—of state-based assaults on labor rights, environmental protections and public education.

“Dozens of corporations are investing millions of dollars a year to write business-friendly legislation that is being made into law in statehouses coast to coast, with no regard for the public interest,” explains Bob Edgar of Common Cause. “This is proof positive of the depth and scope of the corporate reach into our democratic processes.”

ColorOfChange Executive Director Rashad Robinson promised that the group's advocacy would continue.

"ALEC has spent years promoting voter suppression laws, Kill at Will bills, and other policies that hurt Black and other marginalized communities. They have have done this with the support of some of America's biggest corporations, including AT&T, Johnson & Johnson and State Farm," said Robinson. "ALEC's latest statement is nothing more than a PR stunt aimed at diverting attention from its agenda, which has done serious damage to our communities. To simply say they are stopping non-economic work does not provide justice to the millions of Americas whose lives are impacted by these dangerous and discriminatory laws courtesy of ALEC and its corporate backers. It's clear that major corporations were in bed with an institution that has worked against basic American values such as the right to vote. Now that these companies are aware of what they've supported, what will they do about it? If ALEC's corporate supporters will not hold the institution accountable for the damage it has caused nationwide, then the ColorOfChanng community will hold them accountable."

STAR WARS a la SPACED

Spaced Wars - Free videos are just a click away

Woman claims TSA molested her during pat-down

And watch how the TSA threatens the guy filming the whole thing.

Why Most of the Very Rich Have NOT Earned Their Money

Monday, April 16, 2012 by Common Dreams

by Paul Buchheit

 

The wealthiest Americans believe they've earned their money through hard work and innovation, and that they're the most productive members of society. For the most part they're wrong. As the facts below will show, they're not nearly as productive as middle-class workers. Yet they've taken almost all the new income over the past 30 years.

Any one of these five reasons should reinforce the belief that the rich should be paying a LOT more in taxes.

1. They've Taken All the Middle Class Wage Increases

In 1980 the richest 1% of America took one of every fifteen post-tax income dollars. Now, according to IRS figures, they take THREE of every fifteen (doc) post-tax income dollars. They've tripled their cut of America's income pie. That's a trillion extra dollars a year.

For every dollar the richest 1% earned in 1980, they've added three more dollars. The poorest 90% have added ONE CENT.

Yet the average American factory worker, according to Berkeley economist Enrico Moretti, produces $180,000 worth of goods a year, more than three times what he or she produced in 1978, in inflation-adjusted dollars.

So workers have TRIPLED their productivity over 30 years while the richest 1% have TRIPLED their share of income. Worker pay remained flat as the top 10% took almost all the productivity gains since 1980.

2. They've Mismanaged Key American Industries

We have the most expensive health care system in the world. Failing banks have survived because of taxpayer bailouts. Management-approved shortcuts have led to workplace deaths and chemical leak disasters. Companies lobby for cap and trade laws so their profits can pay for their pollution.

Over twenty percent of Americans are unemployed or underemployed as big companies hoard $2 trillion in cash. 93% of post-recession income (pdf) is going to the 1% "job-creators" with no appreciable increase in jobs.

Private tuition is skyrocketing, with student loans reaching the $1 trillion mark. Bonuses continue for executives at Ford and Bank of America and Sirius and other companies who have underperformed and/or laid off workers.

No, the captains of industry have not earned their money because of their top-notch management skills.

3. They've Benefited from 50 Years of Public Research

The very rich have made their fortunes in good part because of taxpayer-funded research at the Defense Advanced Research Projects Agency (the Internet), the National Institute of Health, the National Science Foundation, and numerous other government agencies.

Consider just a simple communications device. Computer chips and audio/video/voice technologies grew out of decades of funding at the Department of Defense, the Air Force, NASA, and public universities. The pieces of the device were put together by a procession of chemists, physicists, chip designers, programmers, engineers, production-line workers, market analysts, testers, troubleshooters, etc., etc. They, in turn, couldn't have succeeded without another layer of people providing sustenance and medical support and security and administrative assistance and transportation and office maintenance for the technologists. ALL of them contributed to the final product.

But over the years private businesses have received government contracts to produce and market the results, and "entrepreneurs" have rearranged the pieces into products that seem to appear out of the magical world of a single individual.

4. They've Increased Their Incomes By Not Paying Taxes

The richest 10% own 80% of the stock market, providing billions in "unearned income" that is taxed at less than half the rate of income earned through real work.

Hedge fund managers call their income "carried interest" instead of "income" to keep their tax rate at 15%. Even this small amount may not be paid. Hedge fund managers with incomes in the billions can pay ZERO income tax by deferring their profits through their companies indefinitely.

Real tax rates for the richest Americans have gone way down over the last 30 years, from 34% in 1980 to 23% in 2006. Yet the 1% claim they pay most of the taxes. They don't, if all taxes are considered. Based on recent data from the Center on Budget and Policy Priorities, the total of all state and local taxes, social security taxes, and excise taxes (gasoline, alcohol, tobacco) consumes 22% of the annual incomes of the poorest quintile. For the top 1% of Americans, the same taxes consume less than 10% of their incomes.

In addition, most inherited wealth goes untaxed, with estates valued up to $5 million exempt from federal taxes. The average tax rate on inheritance is less than 3 percent.

It's no different for corporations. U.S. Office of Management (OMB) figures show a gradual drop over the years in Corporate Income Tax as a Share of GDP, from 4% in the 1960s to 1.3% in 2010. That's ONE-THIRD of their previous share. From 2008 to 2010, the top 100 U.S. corporations paid only 12.2% of their income in taxes, and thirty of them paid nothing at all (pdf).

The lack of SEC regulation has also allowed corporate America to seek tax dodges beyond our borders. Citizens for Tax Justice reports that the 280 most profitable U.S. corporations sheltered half their profits from taxes - up to $337 billion a year (pdf) - between 2008 and 2010.

Most shocking is the long-term shift in the tax burden from corporations to middle-class workers. For every dollar of workers' payroll tax paid in the 1950s, corporations paid three dollars. Now it's 16 cents.

5. They've Contributed Little to Society

The richest individuals and corporations have shown little regard for the majority of Americans who depend on sound financial management for their economic security. According to sources such as the New York Times and ProPublica, Wall Street firms including JPMorgan, Citigroup, Bank of America, and Goldman Sachs have been repeatedly charged with fraud only to avoid punishment by paying a fraction of their profits in fines.

Financial insiders have figured out how to cheat other investors by timing the purchase of a stock option to precede good corporate news, timing the sale of a stock option to precede bad corporate news, and changing the purchase date (pdf) on a stock option to a time when the price was lower.

One hedge fund manager, John Paulson, made $4 billion by working with Goldman Sachs to create a financial product that would allow him to bet on the collapse of the housing market. Other financial masterminds packaged toxic derivatives for sale to unknowing pension funds, as ratings agencies were paid to ensure the worthless packages received AAA ratings.

Meanwhile, the banks were roughing up the homeowners. Bank of America foreclosed on tens of thousands of Americans by using unverified evidence called "robo-signing."

Disdain for average citizens goes way beyond fraud, and well outside our borders, into the areas of environmental and human rights abuses. Computer and phone makers like Apple save money by obtaining their coltan from the Congo, where children dig it out of the mines. The "blood coltan" goes to China, where teenagers stand for 12 hours a day performing repetitive tasks for a few dollars. Monsanto's herbicides and pesticides cause biological damage, promote the growth of 'superbugs' and 'superweeds,' and generally don't outperform organic methods of farming. Exxon is not only the biggest profitmaker and polluter, but the company has conducted a lengthy campaign (pdf) to deceive the public about global warming. Corporate Accountability International named Monsanto, Exxon, Koch Industries, Chevron, Blackwater, and Halliburton to its Corporate Hall of Shame.

And finally, how well is society served when valuable resources are spent on a yacht complete with golf course, submarine, beach, and helicopter, and which qualified for a second-home mortgage deduction? Or on a $250,000 playhouse for the kids?

Studies show that increased wealth is correlated with a lesser degree of empathy for others. Despite their dependency on society for everything else, the super-rich have apparently earned the right to live in their own privileged world.

Google: Internet Freedom Faces Greatest Threat Ever

Sunday, April 15, 2012 by Common Dreams

In an interview published today, Google Co-founder Sergey Brin told The Guardian that internet openness and universal access are under immediate attack by "very powerful forces that have lined up against the open internet on all sides and around the world".

"I am more worried than I have been in the past," he said. "It's scary."

The threat to the internet comes "from a combination of governments increasingly trying to control access and communication by their citizens, the entertainment industry's attempts to crack down on piracy, and the rise of 'restrictive' walled gardens such as Facebook and Apple, which tightly control what software can be released on their platforms," The Guardian reports.

In the interview Brin alludes to the reach of the US government, telling how Google is forced to hand over data and is restricted from notifying users that their privacy has been breached.

* * *

The Guardian: Web freedom faces greatest threat ever, warns Google's Sergey Brin

Brin said he and co-founder Larry Page would not have been able to create Google if the internet was dominated by Facebook. "You have to play by their rules, which are really restrictive," he said. "The kind of environment that we developed Google in, the reason that we were able to develop a search engine, is the web was so open. Once you get too many rules, that will stifle innovation."

He criticised Facebook for not making it easy for users to switch their data to other services. "Facebook has been sucking down Gmail contacts for many years," he said. [...]

He reserved his harshest words for the entertainment industry, which he said was "shooting itself in the foot, or maybe worse than in the foot" by lobbying for legislation to block sites offering pirate material.

He said the SOPA and PIPA bills championed by the film and music industries would have led to the US using the same technology and approach it criticised China and Iran for using. The entertainment industry failed to appreciate people would continue to download pirated content as long as it was easier to acquire and use than legitimately obtained material, he said. [...]

Brin acknowledged that some people were anxious about the amount of their data that was now in the reach of US authorities because it sits on Google's servers. He said the company was periodically forced to hand over data and sometimes prevented by legal restrictions from even notifying users that it had done so.

The NSA Wants Even More Power

April 16, 2012

by James Wilson

 "The NSA has been lobbying for a bigger role in the cybersecurity operations of private networks for some time, including more access to private communications." - Leslie Harris, Center for Democracy & Technology  

Two competing "cybersecurity" bills will be considered in the House the week of April 23.
Is Congress about to authorize private companies to share your personal information to the National Security Agency (NSA)?  

As this highly-recommended article by James Bamford shows, the NSA is already spending billions on supercomputers in order to unconstitutionally collect and permanently store your personal data. 

Should the NSA be further empowered? Or should it be stopped?

I sent the following letter to STOP the NSA using DownsizeDC.org's Hands Off the Internet Campaign, and I urge you to do the same. 

The hard-wired message says...

As a constituent, I insist that you oppose any attempts to undermine Internet freedom.

You may borrow from or copy these additional comments...

That is why I'm opposed to the Rogers bill (HR 3523) and the Lungren bill (HR 3674).
"Cybersecurity" is the new "terrorism." It's a made-up scare-word. It benefits those who seek federal power. It favors crony contractors. It does so at the expense of my privacy. It pretends I'll be safer if the internet is less free. 

• Jim Dempsey, of the Center for Democracy and Technology, calls these bills a "classic case of overreach."... (http://bit.ly/I31te2)

• Victims of cyber-attacks are already permitted to share information with The State, just as they are permitted to report crimes in the real world. 

• We may need a tweak in current law that allows service providers to share information about _attacks_ with one another. But both bills go farther than a tweak. And the Rogers bill is FAR worse than the Lungren bill. Lungren has limits on the sharing of cybersecurity information. But the Rogers bill... (http://abcn.ws/HyRizc)
• Contains vague language that could hand sweeping powers to agencies like the National Security Agency (NSA). For example, they could create "backdoor wiretaps." 

• Creates a sweeping "cybersecurity exception" to every single federal and state law, including key privacy laws. 

• Offers a very broad, almost unlimited definition of the information that can be shared with government agencies. 

• Allows private companies to share your private communications with each other and with all other agencies of the federal government. In a cyber-crisis, warrants and prior disclosure to customers would be unnecessary.  

• Gives blanket immunity to companies for cooperating with The State, thereby increasing the INCENTIVE to do so.   

• Authorizes any collected personal data to be used to prosecute ANY crime, not just cybersecurity crimes. Be careful what you write in email!. As James Bamford has reported, the NSA already has too much power. This agency is creating a Big Brother system of surveillance, called Stellar Wind. (http://www.wired.com/threatlevel/2012/03/ff_nsadatacenter/all/1) 

• The NSA is currently constructing a $2 billion "data collection" facility in Utah. 

• In its "near-bottomless databases will be all forms of communication, including the complete contents of private emails, cell phone calls, and Google searches." 

• It will have the most powerful hacking system in the world for financial information, stock transactions, business deals, foreign military and diplomatic secrets, legal documents, and confidential personal communications, including ALL of my emails and phone calls. Do you seriously want to give the NSA even GREATER ability to collect our data?