The news that Apple paid zero taxes on tens of
billions in income on its overseas operations, investments, and sales grabbed a
momentary headline but stirred little more than a yawn among GOP leaders.
There's little surprise here for several well-known and deeply troubling
reasons. The tax dodge scheme that Apple and other giant corporations and
banking entities use to pay zero or minimum taxes on their sales and investments
abroad is perfectly legal. Tax laws allow companies that do business outside
the U.S. to park their profits, that's cash, in offshore accounts and they are
exempt from taxing as long as they stay there. Indeed Apple CEO, Tim Cook,
pretty much said as much in telling how Apple makes billions abroad and pays no
taxes on it. The fallback retort of Apple and other corporate tax dodgers is
that they pay billions in U.S. taxes on their operations here, so there's no
issue, since taxes paid are taxes paid.
This is a ridiculous argument. Apple and other companies are American owned
and operated firms, and worse they pay little or no taxes in the countries
where they sell their products. Apple is a textbook example. Its three name subsidiaries have no "tax residency"
in Ireland where they operate from. Apple's main subsidiary, a holding company
that includes Apple's retail stores throughout Europe, hasn't paid any
corporate income tax in the last five years.
Apple's
tax dodge again tossed the ugly glare on the long, and cozy, but toxic
corporate welfare feed at the government trough. Six years ago, the libertarian
Cato Institute, documented nearly $100 billion in direct and indirect subsidies
that the banking industry and major corporations grabbed from the federal
government. This figure doesn't include the billions more in direct and
indirect subsidies from state and local governments. This figure almost
certainly is even higher today.
The federal
agencies that shell out the corporate welfare largess are unchanged. The
Tax Foundation in a 2010 report found that corporations will be showered with
more than $600 billion in government entitlements spread over the next five
years in the form of an array of tax breaks and loopholes. The partial
checklist of those breaks include; the Graduated Corporate Income Credit,
Inventory Property Sales, Research and Experimentation Tax Credit, Deferred
Taxes for Financial, Firms on Certain Income Earned Overseas, Alcohol Fuel
Credit, Credit for Low-Income Housing Investments, Accelerated Depreciation of
Machinery and Equipment, the Deduction for Domestic Manufacturing, Exclusion of
Interest on State and Local Bonds, and Deferral of Income from Controlled
Foreign Corporations. Every major corporation and bank is and has been in on
the subsidy grab for years.
The billions doled out in corporate welfare annually
dwarf the amount the federal government pays out to the states for welfare,
food stamps, child nutrition programs, and other support programs for the poor
and needy. However, these are the programs that are eternally in the GOP's bull's
eye to be cut or eliminated. They are convenient, popular, and emotionally
rousing whipping boy programs that stir the ire of millions and routinely
ignite rants against welfare queens, leeches, and the entitlement chislers. To brand a corporate or banking head that
receives millions in direct or indirect government handouts lazy, slothful,
hand out is unthinkable. The GOP has
transformed the stereotype of who is a government leech into the perennial
political attack point that the government is too big, wasteful and intrusive. And that those who appear to benefit most from
government should pay the most for it.
The GOP's big wasteful, intrusive government line
spans nearly a century of GOP politics. It has been used as a political ram to
batter Democratic presidents. It was used against FDR's New Deal, Truman's Fair
Deal Program that included a push for national health care, LBJ's Great Society
jobs and education spending programs, and to pressure JFK and Clinton into tax
cuts that directly benefited corporations and the wealthy.
This ties directly into
the GOP's other sacred belief that lower-end workers, and the poor are in
essence parasites that feed at the government pen at the expense of
upper-income earners and the wealthy.
The GOP has translated its
mantra of chop off the subsidies from the supposedly undeserving needy but
don't touch a dime of the federal government's subsidies to the truly
undeserving corporate rich into a can't miss tactic to rally conservatives, the
business community, and a significant number of Americans that genuinely
believe government spending and power is way out of control. And of course, to
wage its relentless, high intensity, war against President Obama.
To his credit Arizona Senator
John McCain did rip Apple for tax avoidance. But if past practice is any
indication, aside from this, a few nasty media hits here and there, and feigned
indignation, that will be where it ends. And Apple and the other corporate
biggies will skip away with their corporate welfare goodies just as they always
have.
Earl Ofari Hutchinson is an author and political analyst. His
new ebook is How the NRA Terrorizes
Congress--The NRA's Subversion of the Gun Control Debate ( Amazon ). He is an associate editor of New
America Media. He is a weekly co-host of the Al Sharpton Show on American Urban
Radio Network. He is the host of the weekly Hutchinson Report on KTYM 1460 AM
Radio Los Angeles and KPFK-Radio and the Pacifica Network.
Follow Earl Ofari Hutchinson on Twitter:
http://twitter.com/earlhutchinson
