Last Week Tonight Episode on ‘Long and Infuriatingly Proud History’ of Corporate Tax Cheating

It’s a pretty good video (link) based on its evidence and presentation, and I say that as someone who has spent a fair amount of time studying corporate tax systems.

Comedian John Oliver pulled no punches (well, he pulled a few) during Sunday night’s episode of “Last Week Tonight,” especially in the feature segment in which he eviscerated the U.S. tax system by revealing just how endlessly favorable it is to corporations and the wealthy at the expense of everybody else.

Citing last year’s massive tax giveaway to the rich, which will ultimately raise taxes on tens of millions lower-income families, Oliver says, “We just had a huge chance to reform our tax code and we absolutely blew it.”

As The Week details, Oliver goes on to pillory the ability for corporations to avoid taxes by exploiting loopholes and a worldwide web of tax shelters:

Oliver walked through the “long and infuriatingly proud history” of corporate tax avoidance, with a special nod to Apple and Google for being top “innovators in weaselly accounting,” though GE and other huge companies paid zero federal taxes for much of this century. The new tax bill does force some of those companies to pay taxes on money stashed overseas, but at bargain rates — a gamble that did not pay off in terms of job creation in 2004, and probably won’t this time either, Oliver said.

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Ralph Nader at Harvard Law School

Particularly notable here is the story about the potentially corrupting effects of being in the law school, the facts that aren’t mentioned enough, and the indignance about how institutions are often functioning in modern society.

Nader is in one of his prime elements the law at HLS, delivering what is probably one of the best lecture sessions that he’s given in recent years. I would know, as I’ve seen most of them.

“You have to ask yourself, are you going to become a lucrative cog in a corporate wheel? Plenty of wheels! Plenty of opportunities. Do you really want to be part of the perpetrator class? Do you really want to be part of the class that covers up massive deaths and injuries, penury, fraud, and a enveloped corporate crime wave?”

Paradise Papers Release Shows Immense Wealth Hidden by World Elites in Offshore Tax Havens

The Paradise Papers show that the world is moving too quickly in the direction of what’s perhaps appropriately described as an international oligarchy controlled by billionaires and giant multinational corporations.

The world’s biggest businesses, heads of state and global figures in politics, entertainment and sport who have sheltered their wealth in secretive tax havens are being revealed this week in a major new investigation into Britain’s offshore empires.

The details come from a leak of 13.4m files that expose the global environments in which tax abuses can thrive – and the complex and seemingly artificial ways the wealthiest corporations can legally protect their wealth.

The material, which has come from two offshore service providers and the company registries of 19 tax havens, was obtained by the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists with partners including the Guardian, the BBC and the New York Times.

The project has been called the Paradise Papers. It reveals:

[…]

Meanwhile, multinational companies are shifting a growing share of profits offshore – €600bn in the last year alone – the leading economist Gabriel Zucman will reveal in a study to be published later this week.

“Tax havens are one of the key engines of the rise in global inequality,” he said. “As inequality rises, offshore tax evasion is becoming an elite sport.”

In 2016, 73% of Fortune 500 Companies Used Offshore Tax Havens

All of those hundreds of billions of dollars being deprived of productive use for the public, and that because of a few greedy corporate executives no less.

new study reveals the extent to which companies are using tax havens to avoid U.S. taxes and undermines the case for any tax proposal that would allow companies to repatriate their U.S. profits at a special low tax rate.

In 2016, nearly three in four Fortune 500 companies maintained subsidiaries in offshore tax havens, according to “Offshore Shell Games,” an annual study of offshore tax avoidancereleased today by the U.S. PIRG Education Fund and the Institute on Taxation and Economic Policy.  Fortune 500 companies’ offshore cash hoard now totals $2.6 trillion, a sum on which these companies are avoiding up to $752 billion in U.S. taxes.

Corporate tax avoidance is a central part of the current tax reform debate. Republican lawmakers have proposed not only to lower the statutory corporate tax rate, but also to allow corporations to repatriate offshore profits and pay just a fraction of the current statutory 35 percent corporate tax rate.

[…]

“Real tax reform would fix the deferral loophole, not reward companies for using the loophole to avoid taxes year after year,” said Richard Phillips, a senior policy analyst at the Institute on Taxation and Economic Policy. “Lawmakers shouldn’t be discussing how to sweeten the pot and give corporations a huge tax break that amounts to a huge financial reward for engaging in bad corporate behavior.”

The amount that these corporations will help the American public at a low repatriated rate is comparatively insignificant. This experiment was already run in the 2000s, and the corporations used most of the money for stock buybacks and other corporate malfeasance back then. As the same would happen today, it would be a far superior outcome for those profits to be taxed at a rate that’s actually fair and then used for productive investment in the public interest. An infrastructure project would be one of many sensible ideas.

Lower corporate tax rates aren’t going to lead to more productive investment either. The data from the last 7 decades proves that there’s no correlation between higher aggregate corporate profits and investment.

Wonderful-Graph

The effective corporate tax rate in the U.S. is also already about half of the statutory rate too.

effective-tax-rate - Copy

RNRH: The Existential Threat of Big Tech

The threat that big tech corporations pose is discussed on the recent edition of the Ralph Nader Radio Hour. If the power of these big corporations is left unchecked and is insufficiently opposed, it may lead to a truly dystopian form of society.