My accountant
Found a niche;
Lowered my taxes,
Though I’m rich.
Taxes, like death, may be certain. Unlike death they can be finagled.
Finagling works best if you’re rich and can join with brethren to hire accountants, lawyers, lobbyists, and politicians to carve out loopholes in the law. Then either the rest of us have to pay your share, public services degrade, or the country just goes deeper into debt.
Google, with its ironic “Do no evil” motto, epitomizes this problem. The tech giant shifts its profits to cooperative nations, including Ireland, the Netherlands, and Bermuda, Bloomberg News revealed. Thanks to ploys with cute names like “Dutch sandwich,” Google has saved $3.1 billion that it would have otherwise paid in taxes since 2007.
Locally this conniving takes the form of spiffy cars and comfy yachts being registered someplace else that offers lower property taxes. Meanwhile businesses wheedle local abatements and credits for a multitude of questionable purposes.
Ironically, state capitols are often even easier to fleece than towns since they are farther removed from prying local eyes. Thus state income taxes develop mysterious exemptions, favored industries get handled with kid gloves, and nominal corporate headquarters shift unchallenged to Delaware. Plus, some states don’t levy income taxes at all, meaning that the rich man’s burden gets borne by you-know-who.
While these local scams navigate quietly through placid waters, the economic seas in Washington are more turbulent. How is it that while overblown headlines glower about Social Security’s impending doom we’re rarely informed that payroll income over $100,000 is not taxed at all for this key federal system? If we could simply collect Social Security taxes on breadwinners’ total income, we’d end that blather about raising the retirement age or cutting benefits in other ways.
But not only do the rich own Congress, they own the media too. So we hear little of this and other obvious solutions.
We do hear plenty about the Bush tax cuts currently bankrupting our nation. The general wisdom is that they should expire for the wealthy at the end of the year, so those folks might finally pony up their fair share. For the rest of us, the cuts should be extended a while so that we can, in our own meager way, continue to stimulate the economy.
But Republicans claim that the wealthy stimulate the economy too. True, but unfortunately they stimulate the economies of Switzerland, Bahamas, Brazil, Australia, and China. They don’t invest much back here.
Investors under Bush also got a juicy deal on dividends and capital gains. What, you say, you’re not living high off the money you’ve saved instead of paying as taxes? And neither is the economy? You don’t mean those “Pledge to America” types lied to us back in 2001? Gracious sakes! Well maybe we ought to restore those higher rates on investment profits too, and tax hedge fund operators at regular percentages instead of pretending that their profits are capital gains.
The estate tax is another biggie. The rich call it the “Death Tax” and they really hate it. Not that they will have to pay it themselves. They’ll be dead. But yes, their kids will pay it from mom’s and dad’s investments. Their dynasty will be impaired, after a $3.5 million exemption, of course. I can see the tears welling in your eyes. Would a $3.5 million exemption cover your needs?
The Republicans’ biggest argument against a fair estate tax is that it dooms family farms. It’s not a bad ploy for tugging heart strings, but so far they haven’t been able to find any farms that were sold because of a taxed estate.
In short, the U.S. tax system is a mess. Corporations shift profits abroad and the rich shift assets and legal residences to other states, all to avoid taxes. And it works. To obtain further profit they purchase lawmakers and media outlets. If only we could get those folk to pay their fair share, we wouldn’t have to worry so much about bloating deficits.
