It recently came to light that Apple, one of America’s most-profitable corporations, legally sidesteps a hefty portion of its annual Federal corporate tax obligation by taking advantage of certain loopholes in the U.S. Tax Code (and international financial law) via a complicated series of overseas banking transfers. Over $75 billion dollars in potential federal tax payments got avoided that way between 2009-2012. Lots of people are pretty bent out of shape over it.
But! They didn’t do anything illegal. No law was broken. Like if some normal middle class American guy notices a loophole in the tax code that legitimately allows him to deduct his socks if he buys them in Guatemala. So he imports his socks from Guatemala so he can legally take advantage of the deduction, saving several hundred dollars a year on his taxes. Is that guy a crook? Nope. Just someone who found and exploited a legitimate lapse (or unintended benefit) in the tax code.
Don’t like it, IRS? Amend the law and close the loophole. Readers may recall that Mitt Romney (who?) came under fire during the last presidential election when people noticed he saves a buttload on income taxes by squirreling away personal income in tax shelters, off-shoring portions of it in overseas banks where the IRS can’t touch it. Yet he does this LEGALLY. Because IRS be damned, there’s no way to stop it— apart from investing millions of American dollars pursuing years of diplomacy signing treaties with foreign governments to gain better access to overseas banking records.
It’s LEGAL. Stop whining, IRS, and pass legislation to stop it. You might also want to quit profiling certain types of political groups. Just play fair and run everyone through the same ringer. Otherwise, expect to get messily called out for it (which is a great scandal to distract us from realizing Congress remains stalemated, since no one dares put forth any serious legislation from ether side). Thanks for the smoke screen, Cleveland IRS guys! Wouldn’t want anyone to notice that our shiny new Congress isn’t doing its job.
But corporate influence remains the biggest, sneakiest, most pernicious problem in Washington.
Federal prosecutions of financial fraud recently hit a 20-year low… though to be fair, the number of such prosecutions has fallen every year since 1999. Politicians seem perfectly happy to accept corporate campaign donations and leave the private financial sector to its own devices, while entire industries openly scoff at safety and trade regulations. Deregulation continues on all fronts, and it keeps allowing hundred-car financial pile-ups in the corporate fast lane (plus the occasional ugly industrial accident).
The gap between rich and poor has been rising unchecked since 2001. America’s most profitable companies use loopholes to pay zero in taxes, but the Obama administration’s farcical proposed tax overhaul would lower the corporate tax rate even further. The worst offending Wall Street greedoids got off scott-free for crashing the economy. Our entire “recovery” has just been a lunatic attempt to re-inflate the same massively-inadvisable financial bubble built on never-ending economic expansion— because American economists are too scared to imagine anything else. That’s the same bubble that goes flat whenever too much deregulation unleashes a greedy financial free-for-all of investment money grabs, torpedoing our economic infrastructure. Lost middle class jobs get hastily replaced with low-wage jobs for a net loss. Median household income has fallen.
Is the United States bouncing back? Kind of. But we’re just re-building the same stack of cards. Business as usual, as the corporations say.