income inequality wealth concentration fair society ge

5 Ways GE Plays the Tax Game
tax rate distribution irs tax code

How to Get the IRS Out of Our Lives

Inequality is now so outrageous that critics are getting close to a critical mass. We trim, blend, and append five 2011 articles from: (1) Vanity Fair, 2011 May on 1% by Joe Stiglitz; (2) ProPublica, Apr 4, on GE by Jeff Gerth and Allan Sloan of Fortune; (3) on fighting back by Joel Hirschhorn; (4) USA Today, Apr 4, by Rep. Charles Boustany, R-LA; and (5) TruthOut, Apr 5, on commonwealth by David Leeper, Z Communications.

by J. Stiglitz, J. Gerth & A. Sloan, by J. Hirschhorn, Ch. Boustany, and D. Leeper

The upper 1% of Americans are now taking in nearly a quarter of the nation’s income every year. In terms of wealth rather than income, the top 1% control 40%.

While the top 1% have seen their incomes rise 18% over the past decade, those in the middle have actually seen their incomes fall. All the growth in recent decades has gone to those at the top.

Among our closest counterparts are Russia with its oligarchs and Iran.

The corporate executives who helped bring on the recession of the past three years -- whose contribution to our society, and to their own companies, has been massively negative -- went on to receive large bonuses.

Growing inequality is the flip side of shrinking opportunity. Whenever we diminish opportunity, we are not using some of our most valuable assets -- our people -- in the most productive way possible.

Monopolies and near monopolies have always been a source of economic power -- from John D. Rockefeller at the beginning of the last century to Bill Gates at the end. Wealth begets power, which begets more wealth.

The wealthiest class feels no pinch from higher taxes when the nation goes to war: borrowed money will pay for all that. There is no limit to the adventures we can undertake; corporations and contractors stand only to gain.

Virtually all US senators, and most of the representatives in the House, are members of the top 1% when they arrive, are kept in office by money from the top 1%, and know that if they serve the top 1% well they will be rewarded by the top 1% when they leave office.

The top 1% may complain about the kind of government we have in America, but in truth they like it just fine: too gridlocked to re-distribute, too divided to do anything but lower taxes.

America has long prided itself on being a fair society, where everyone has an equal chance of getting ahead. Americans understood a basic fact: looking out for the other guy isn’t just good for the soul -- it’s good for business.

To see the whole article, click here

JJS: How’d some get so rich? Here’s one way.

GE pares its tax rate well below the top US corporate rate of 35% -- sometimes into the single digits.

Last year, GE's tax rate, for earnings-reporting purposes, was 7.4%. The company says it will be higher this year, in part because of the $3 billion gain it recorded on the sale in January of a 51% stake in its NBC-Universal media operation to Comcast.

To see the whole article, click here

JJS: Learning all the details of tax loopholes for powerful corporations, leftist critics get to feel knowledgeable and morally superior. Yet do corporadores care to learn the details of, say, a leftist tax reform? No. The weaklings pay attention to the strong, and feel good about themselves, feeling connected to the strong, while the strong ignore the weak.

Governments and corporate lobbyists change tax policy so much it is impossible for critics to keep up with the full breadth of tax abuse. By now, critics should have learned that taxes do not have loopholes for the powerful so much as taxes are blankets upon the non-rich and skirts hiding the evasion of the superrich. Yet leftist critics keep complaining about rich tax dodgers and keep faith in taxation.

Two recent articles should be required reading in every classroom and home. First is by acclaimed economist Joseph E. Stiglitz in Vanity Fair (above); second by Robert Scheer in The Nation (click here ). Also, examine the Who Rules America? website (click here ). What kind of population would endure all this inequality? Peruse a Mother Jones article (To see the whole article, click here ), which points out most Americans perceive wealth distribution more fairly distributed than it really is, delusional thinking.

The economic oppression by the richest one% is far greater than that of the British which spurred the American Revolution. Have you had enough, when politicians don’t tax the rich nor cut corporate welfare? As the middle class merges into one huge lower class, more Americans will suffer. We desperately need a second revolution against domestic tyranny. We do outnumber them.

JJS: Ending corporate welfare is necessary but not enough, and raising taxes is not necessary at all, not as long as we use fees, dues, and leases to recover the commonwealth. Taxes are not necessary, just “evil”, a holdover from feudalism.

We ought to reduce the underlying cost of the IRS by reforming our tax code and reducing the IRS’ role in domestic programs.

There have been nearly 5,000 changes to the tax code in the past 10 years alone, and in the past 30 years the tax code has tripled in size to more than 2.1 million words.

For next year alone, the IRS has requested nearly half a billion dollars and more than 1,200 new employees to implement the health care law.

This country doesn’t have a revenue problem -- it has a spending problem. We can no longer afford ever-increasing budgets, skyrocketing debt, and higher taxes. Instead, we must simplify the code and get the IRS out of our daily lives.

To see the whole article, click here

JJS: Focusing on taxes obscures the fact that there’s not just the value generated by individuals but also the values generated as an unintended but welcome byproduct of society.

When a real estate investor buys land for $1,000 an acre and sells it five years later for $30,000 an acre, he has not created that wealth. That wealth was created by the community that developed the city surrounding the investor’s land. The community creates the services, and the demand, that increases the value of this land.

The investor may have done nothing but sign a promissory note to pay for that land, yet we have accepted a system where all of the increased value goes to the person who signed the note. We then tax that income, at the most, at approximately one third. We leave two thirds of this huge increase in private hands while the rest of us work and scrape to pay for the services that will multiply his next investment.

Donald Trump’s salary is reportedly $42,000,000 per year, primarily from real estate investments. Yet we -- the community -- create the conditions that increase the value of his investments every year. We have been trained to believe that $42,000,000 he makes each year is entirely his money. It is not.

To see the whole article, click here

JJS: “Tax Justice” is an oxymoron. Taking property is wrong. What would be just are land dues, whereby people compensate each other for gifts of nature and society that they exclude others from.

The money society spends for the nature it uses is a surplus, the commonwealth. Once we recover the commonwealth, there won’t be enormous fortunes for taxists to envy.

If you don’t want those few insiders to have your money, forget about taxing. Taxes cannot be fixed. They must be replaced. Charge land dues so payments for nature can no longer collect in few pockets. Pay rent dividends so those revenue flows benefit everyone.


Editor Jeffery J. Smith runs the Forum on Geonomics. complexity

Also see:

Wealth Gap Yawns and So Do Media

Why is so much wealth in the hands of the few?

America -- less equal than ever

Email this articleSign up for free Progress Report updates via email

What are your views? Share your opinions with The Progress Report:

Your name

Your email address

Your nation (or your state, if you're in the USA)

Check this box if you'd like to receive occasional Economic Justice announcements via email. No more than one every three weeks on average.

Page One Page Two Archive
Discussion Room Letters What's Geoism?

Henry Search Engine