Level the Playing Field
National Debt & Deficits to no end, is no way to run the mightiest economic engine on earth. To fix that, once and for all. A Vote to end Tax Injustice, Tax Inequality, and Tax Discrimination, of smaller businesses vis-a-vis the biggest ones. A Vote to stop the federal tax favoritism granted to multinational corporations, in a bid for Small and Medium Business tax relief. And a quest for sustainable fiscal and financial health for America, with a Plan to end Debt and Deficits, once and for all.
(Note that underlined words or phrases, you find below, correspond to links. Also note that the following is a continuation of the reasoning & rationale for the Bill-Request begun at Main Street Gov, found here.)
FYI: In the 1930s, corporations contributed about as much to federal tax receipts as individuals. With World War II, corporations contributed 50% more to federal tax receipts than individuals. By the 1980s, individuals were contributing 4 times what corporate profits were contributing. By 2009, the corporate share of the nation’s tax receipts had sunk to 6.6%. THIS WAS NOT BECAUSE SMALL AND MEDIUM BUSINESSES WERE SHOWERED WITH TAX GOODIES — IT WAS BECAUSE OF ALL THE BAD STUFF DOCUMENTED IN LINKS LIKE THESE:
Mega Banks and other entities on Wall Street are by and large the biggest beneficiaries of the tax favoritism bestowed by Washington DC. Per our Corruption & Cure bill-request:
(a) Wall Street’s banks implicated in frauds, such as foreclosure fraud (or foreclosing on people the banks didn’t have a right to, because the banks had phony’d up the paperwork to throw homeowners out of their homes) have settled with the government with settlement dollars that were later allowed to be tax-deductible for the most part.
(b) In Dec 09, the government granted Citigroup permission to repay taxpayers $20 billion in bailout money. Despite Citi being still in tatters, financially, the idea was: The bailouts had put restrictions on executive compensation, yet the execs wanted to be compensated the way they dreamed of being compensated, and returning $20 billion to the taxpayer was one way to get executive compensation flowing like it used to flow, pre-bailout. So Citi gave Treasury the $20 billion and, in return, Treasury gave Citi $38 billion back in tax breaks.
( c ) Pretty much every working American, no matter their financial well-being or struggle, experienced a tax increase starting 2013 with the payroll tax hike, equal to about a thousand bucks more taken away from a household earning a median income of about $52,000 a year. (The fact that this tax break, for mostly the poor and the middle class, was allowed to lapse only after President Obama’s re-election, was no accident.) Despite a $125 billion payroll tax hike hitting up everyone in the middle class and poor — yes, that includes those of you on a minimum hourly wage, as well — it’s important you know that there were $60-some billion in tax breaks for the usual suspects in 2013 alone, including:
(i) breaks for offshore loans (hooray for banks);
(ii) breaks for Liberty Zone bonds that helped bankroll luxury high-rises in lower Manhattan, including Goldman Sachs’ spanking new 200 West Street global headquarters;
(iii) breaks for the politicians’ perennial buddies: the hedge fund and private equity bigwigs, who’ll get to make a hundred million bucks or a billion bucks in a year at a discounted tax rate, while all the suckers they see around them, making little money, pay almost twice that, because those itsy-bitsy teeny-weeny people, making small dough, can’t buy the politician the way the big-dough-makers can.
(d) In the aftermath of the financial crisis of 2008, the U.S. Treasury changed the tax code to tax-favor and thus encourage bank mergers, figuring perhaps that the only way to taxpayer-protect and bail-out Wall Street at their next self-concocted crisis was to make the already Too Big To Fail banks even bigger.
Consider, for example, the changes made in 2008 to Section 382 of the U.S. Tax Code (FYI: Congress designed Section 382 in 1986 to counter corporate abuse of the tax code by strictly restricting the practice of profitable corporations buying up shell companies that were harboring losses, so that the profits at the parent could be offset by those losses, allowing the parent to bypass tax liability on otherwise taxable profits.)
On Sep 30 2008, the Treasury unilaterally amended Section 382 to give banks the benefit of that tax-bypass, a windfall worth up to an estimated $140 billion to the banks.
Within days of that move, former Treasury officials, working for the banks on the other side of the revolving door, met with Assistant Secretary of the Treasury for Tax Policy, Eric Solomon, to ask that even foreign banks be allowed to get in on the dodge.
Treasury did not have Congress make the change, per the U.S. Constitution. No, Treasury made the alteration on its own, leaving many to question its legality. “Did the Treasury Department have the authority to do this? I think almost every tax expert would agree that the answer is no,” said George K. Yin, the former chief of staff of the Joint Committee on Taxation. “They basically repealed a 22-year-old law that Congress passed, as a backdoor way of providing aid to banks.”
But what did Members of Congress do about Treasury’s invasion into their Constitutional territory? Yep, you guessed it: Nothing! Why mess with something that could send some of that $140 billion back to legislators, either in campaign finance or in perhaps multimillion dollar jobs at the big banks (going through the revolving door, after retiring from Public $ervice).
Matter of fact, the staff of Senator Max Baucus (D-Montana), chairman of the Finance Committee, reportedly asked that an entire conference call about the modification to Section 382 be kept secret from the public.
And, finally, to elaborate on something we insinuated under our Social Security & FICA bill:
The hedge fund and private equity guys receive preferential treatment when it comes to the taxes they pay. They benefit from what is called the carried-interest loophole. Their income is treated as capital gains, rather than ordinary income. In 2007 and again in 2009, the top 25 hedge fund managers were paid over $25 billion dollars of such income, i.e. over $1 billion per person, and were subjected to only a 15% tax rate.
A small business owner earning one-ten-thousandth the income (that the hedge funders each made) pays 15.3% in FICA alone.
(Note also: As of this writing, the billion dollar earner pays Social Security on only the first $118,500 of income; the remaining $999 million 881 thousand 500 dollars is exempt from Social Security taxation.)
In 2007 and in 2009, the average top hedge fund manager earned in an hour about 17 times what the average American worker made in a year. Yet the hedgie got to pay a lower rate than the average American worker.
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