ECONOMY Making Corporations Pay Their Fair Share House Republicans have proposed a slew of spending cuts for the rest of the 2011 fiscal year that would block important investments and hurt vital public services , citing America's current federal deficit. At the same time, several conservative governors -- including Govs. Scott Walker (R-WI), John Kasich (R-OH), and Paul LePage (R-ME) -- have proposed placing the brunt of deficit reduction in their states onto low- and middle-income Americans. Conservatives are using budget woes to call for decreased funding for education, health care, and the social safety net, while also trying to wring pay and benefit cuts out of public employees. But it wasn't middle-class workers or public employees that caused the deterioration in America's fiscal picture: it was the Great Recession, caused in large part by malfeasance of the elite class on Wall Street. Instead of asking middle-class workers and public employees to pay for the sins of the financial industry, officials at all levels of government could be looking to raise additional revenue not only from Wall Street's financial titans, but from corporations which, in this country, have gone to great lengths to avoid paying taxes. Last weekend, Americans across the country organized a Main Street Movement to stand with organized labor and, in part, to demand that corporate interests pay their fair share to keep government services intact. US Uncut, modeled on UK-inspired demonstrations against tax dodgers, protested outside of multiple Bank of America branches, noting that BofA paid nothing in federal taxes in 2009. As Carl Gibson, the founder of US Uncut, explained, if you have "one dollar" in your wallet, you're carrying more than the "combined income tax liability of GE, Exxon-Mobil, Citibank, and the Bank of America."
CORPORATE TAX DODGERS: As the Center on Budget and Policy Priorities (CBPP) found, "corporate tax revenues are now at historical lows as a share of the economy, at a time when the nation faces deficits and debt that are expected to grow to unsustainable levels." While the U.S. statutory tax rate of 35 percent is high compared to other countries, the effective tax rate -- the rate that corporations actually pay -- is quite low, due to the myriad loopholes and credits in the corporate tax code and the widespread use of corporate tax havens. In fact, the U.S. collects below the OECD average in corporate tax revenue. Many corporations, including Boeing, General Electric, and Wells Fargo, have paid nothing to the U.S. government in recent years. Other corporations, like Google, Pfizer, and Coca-Cola dramatically lower their effective tax rates, often by 20 points or more. Over the last three years, for instance, Google paid a 2.4 percent effective tax rate by sheltering its income in Ireland and countries in the Caribbean. According to the Government Accountability Office, Citigroup has 427 subsidiaries in identified tax havens, while Bank of America has 115, Morgan Stanley has 273, and Goldman Sachs has 29. The GAO actually found that 18,857 U.S. companies maintained a post office box in one five-story building in the Cayman Islands. According to Business and Investors Against Tax Haven Abuse, multinational corporations alone avoid $37 billion in taxes annually. As the CBPP noted, "the corporate tax now contributes considerably less to federal revenues than it once did: between 2000 and 2009, 10.7 percent of federal revenues were collected through the corporate tax, down from 29.8 percent of revenues in the 1950s."
CORPORATE TAX GIVEAWAYS: In many instances, when corporations aren't exploiting weaknesses in the U.S. tax code, they are actively receiving subsidies from American taxpayers. For example, oil companies receive billions of dollars in taxpayer subsidies every year, even though the oil industry is hugely profitable: "The big five oil companies -- BP, Chevron, ConocoPhillips, ExxonMobil, and Shell -- made a total profit of nearly $1 trillion over the past decade." Former Shell Oil CEO John Hofmeister admitted earlier this month that oil companies do not need this money. "In the face of sustained high oil prices it was not an issue -- for large companies -- of needing the subsidies to entice us into looking for and producing more oil," Hofmeister said. And oil company subsidies are far from the only corporate giveaway. Cutting coal subsidies would save taxpayers $2.5 billion over ten years. The farm bill up for renewal in 2012 includes $30 billion in agriculture subsidies, much of which goes to big, profitable factory farms. As the Center for American Progress' Seth Hanlon pointed out, there are "special tax provisions that allow companies to choose the most favorable method for valuing their inventory and cost of goods sold. This is an inefficient and unnecessary subsidy for certain businesses." Changing these provisions could save taxpayers $61 billion over ten years.
PRO-TAX DODGING CONSERVATIVES: Corporations are aided in their effort to bilk the taxpayer by complicit lawmakers in Congress. This week, every Republican member of the House (joined by 13 Democrats ) voted to preserve subsidies for the five largest oil companies. In fact, the Obama administration has been proposing to cut these subsidies since it came into office, only to be rebuffed by conservatives every time. A few Republicans -- including House Ways and Means Chairman Dave Camp (R-MI) and Rep. Jeb Hensarling (R-TX) -- have actually said that corporate tax dodging is proof that the corporate tax rate should be lowered. When asked by ThinkProgress if it was fair that Bank of America pays no federal corporate taxes, former Gov. Tim Pawlenty replied "the corporate tax rate in America is too high." House Republicans are so unconcerned about tax dodging that they have proposed cutting the Internal Revenue Services's budget by $600 million, even though "every dollar the Internal Revenue Service spends for audits, liens and seizing property from tax cheats brings in more than $10." IRS Commissioner Doug Shulman said that a $600 million cut in this year's budget "would result in the IRS collecting $4 billion less through tax enforcement programs." While they allow tax dodging to continue unabated, House Republicans have laid out spending cuts that would would gut important federal investments in special education, K-12 education for low-income students, federal job training, environmental protection, community health centers, infrastructure, programs that aid both pregnant women and newborns, and housing assistance for low-income veterans and long-term disabled people.
 The Ohio state senate approved a bill that would severely curb the collective bargaining rights of public employee unions. The bill would prohibit workers "from bargaining over health benefits and pensions, while also eliminating the right to strike."
At a town hall meeting yesterday, Gov. Chris Christie (R-NJ) exclaimed "I love collective bargaining" and insisted that the Garden State is very different from Wisconsin or Ohio. While Christie's relationship with state unions "has in the past been icy," he now wants to work with them now, adding "get me out of the cage" and "let me at them."
Anti-government rebels repelled an attack by forces loyal to Libyan leader Col. Muammar Qaddafi yesterday in the strategic oil city of Brega. The battle was the pro-Qaddafi forces' first attack in the rebel-held eastern Libya. The rebels fought through artillery fire and air power throughout the day and forced the government forces to flee by night fall.
Defense Secretary Robert Gates poured some cold water on the idea of establishing a no-flight zone over Libya yesterday, telling Congress it would be "a big operation in a big country" that would have to begin with an attack on the country's air defenses. Senate Foreign Relations Committee Chairman John Kerry (D-MA) also expressed concern about the idea.
A new Wall Street Journal/NBC News poll found that "less than a quarter of Americans support making significant cuts to Social Security or Medicare to tackle the country's deficit." Eighty-one percent said that placing a surtax on millionaires is either a “totally" or “mostly" acceptable way in which to reduce the deficit.
President Obama signed a bill yesterday extending federal government funding for two weeks and called for high-level negotiations to bridge budgetary differences between Republicans and Democrats in Congress. “Living with the threat of a shutdown every few weeks is not responsible, and it puts our economic progress in jeopardy," Obama said.
Obama has arranged a meeting between Congressional leaders and Vice President Biden aimed at solving the federal budget impasse -- but Republican leaders may not attend. A GOP aide told Roll Call "such a meeting would be more productive if Democrats had a plan for cutting Washington spending."
Federal Reserve Chairman Ben Bernanke said yesterday that House Republicans' spending plan would likely cost "a couple hundred thousand jobs," a number he called "not trivial."
Sen. Daniel Akaka (D-HI) announced that he will not be running for re-election in 2012 . "It was a very difficult decision for me," he said. "However, I feel that the end of this Congress is the right time for me to step aside."
And finally: Cleveland may rock, but actor and Price Is Right host Drew Carey "doesn't appear willing to 'come on down' into the Ohio Senate race ." "Carey's libertarian-conservative philosophy and recent weight loss" have made him an attractive candidate for some Republican activists, but his publicist told Politico that "Drew does not plan to run for office."
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 "As soon as each of them shows some serious intention to form an exploratory committee, we would take the same action. Huckabee is on a book tour, so I think his present intention is to sell books."
-- Fox News spokesperson Dianne Brandi, 3/02/11, explaining why Newt Gingrich and Rick Santorum, and not Mike Huckabee, were suspended from their Fox News contracts
VERSUS
Q: I read this book and I say, "Mike Huckabee is thinking about running for president."
HUCKABEE: Of course I'm thinking about it.
-- Huckabee, 2/22/11
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