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U.S. Uncut, ‘Progressive Tea Party,’ Demands Corporations Pay Their Taxes

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Spurred by an article in The Nation by Johann Hari called “How to Build a Progressive Tea Party,” a new group called U.S. Uncut has begun protesting against large corporations that avoid paying much or all of the income taxes they ostensibly owe.

The group, modeled after a British organization called U.K. Uncut, has begun by targeting Bank of America branches across the nation.

The embryonic wave of activism is in part a response to the Tea Party’s focus on budget cutting, which has led to proposals for drastic cuts in U.S. states and nationally, cuts which are seen as primarily impacting working people. The massive protests in the Midwest against moves to eliminate collective bargaining have been one response.image of US Uncut protest

U.S. Uncut wants to shift the budget focus to the billions of corporate taxes that go uncollected because of various deductions. According to a Forbes list, Bank of America, for example, with “a provision for credit losses of $49 billion, probably won’t be paying taxes for a long time.”

Companies like ExxonMobil and Chevron pay little or no U.S. income tax despite many billions of dollars in domestic sales. That’s in contrast to Wal-Mart, which paid nearly a third of its profit in taxes in 2009, the kind of percentage a working family would be familiar with.

Different business models account for these disparities, and the issues are complex. ExxonMobil, for example, does a high volume of business in countries with extremely high tax rates, so it pays a lot of income tax—just not to the U.S. treasury.

Still, when working people see their teachers and firemen being laid off while corporations rack up huge profits yet appear to pay almost nothing into the system, it’s no wonder hackles are raised, whether outside a State House in the Midwest or in a bank branch in New York City.

Image courtesy of U.S. Uncut.

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About Jon Sobel

Jon Sobel is a Publisher and Executive Editor of Blogcritics as well as lead editor of the Culture & Society section. As a writer he contributes most often to Culture, where he reviews NYC theater; he also covers interesting music releases. Through Oren Hope Marketing and Copywriting at http://www.orenhope.com/ you can hire him to write or edit whatever marketing or journalistic materials your heart desires. Jon also writes the blog Park Odyssey at http://parkodyssey.blogspot.com/ where he visits every park in New York City. And by night he's a part-time working musician: lead singer, songwriter, and bass player for Whisperado, a member of other bands as well, and a sideman.
  • Boeke

    American corporations are waaayy overprivileged, as anyone who has formed one will testify. In fact, you specifically incorporate to take advantage of corporate privileges that reduce your liabilities and reduce your taxes. It only costs about $1600 (one-time cost) and obligates you to a little extra paperwork each quarter and a pretend board meeting once a year. LLCs are even cheaper and easier.

    Pretty soon we will consider it just the ordinary obligation of a parent to incorporate a child upon birth, like starting a college fund, etc.

    The tax benefits are spectacular: you can deduct EVERYTHING and you get on a more generous tax schedule. You can move your business winnings from high tax personal income to low tax capital gains thru stock options, stock grants, etc.

    Everything becomes a scam. Suppose you want a new car. The corp buys it as a company car, which you use at low or no cost, than after a year they sell it to you for a song. You can even start a car-lease division and run all your family cars thru that.

    Quite often these days, the founder of a corp sells his personal services to the new corp through a personal corp as a consultant, thus further insulating himself from liability and opening up further tax avoidance possibilities. You can even setup a stock deal for convertible preferred shares that are paid for by a loan from the corp., thus getting in on a big IPO with no liability and no investment. Dick Cheneys failure to take that step at Halliburton left him open to shareholder suits when the Dresser Industries deal turned into a $20billion rotten egg, H went thru the floor, and Halliburton shareholders sued him personally for irresponsibility. Perhaps he enabled all those sweetheart KBR contracts in Afghanistan and Iraq in a deal to get out of those liabilities. Maybe, even, that’s why we invaded.

    Since corporations are anonymous, you can use your clout in foreign countries because no one knows who owns the company. So foreigners can own a USA corp that bribes USA government officials (ala the SCOTUS Citizens United Decision) with impunity. That’s the only way for foreigners to contribute to a US election.

    Present day corporations are a gross distortion of corporations that the Founders were familiar with, such as the Hudsons Bay Company, which were very restricted in terms of markets they could operate in, and duration of charter, which was usually less than 25 years.

  • MBL

    Clavos, it doesn’t bother me that unions give so much to Democrats. But when corporations donate that is a concern. Here’s why: They are completely different animals.

    Unions are set up to stand up for the working person. They are working class people who have formed solidarity so that the employee-employer relationship is less unequal.

    Corporations are for-profit businesses that have no interest whatsoever in giving back to society. Their primary purpose is to maximize profits for their stockholders. While unions are supposed to act on behalf of the public interest, corporations have no such goal. They simply exist to earn profits for themselves–the public good doesn’t matter.

    So while I’m aware that there may be some corruption in unions (as there is always corruption anywhere when human beings are involved), the purpose of the union is to advocate for the people. And that is in line with what, theoretically, our reps in Congress are supposed to do–advocate for us, for we the people. However, corporations do not serve that same function. They truly are private interests and exist solely for the purpose of profiting for themselves.

    If Democrats are largely getting funding from unions while Republicans are being funded by private corporations then it is no wonder that Republicans have been at the forefront of helping the rich get richer while the few in Congress who have stood up for the average person have, for the most part, been Democrats. (Yes, I’m aware that many Democrats are just as corrupt as the Repubs–not trying to defend them but I am saying the Dems are less corrupt than the Repubs in terms of advocating for the avg person.)

    Problem is that politicians need money to fund their campaigns and the Supreme Court ruled that corporations can donate as much money as they want to fund those campaigns. Want to change the system? Then advocate for campaign finance reform. A politician who refuses to take money from big corporations is going to have trouble funding his/her campaign and probably won’t get elected!

  • howard

    clavos , we are both correct. we both smell smoke , and now we urgently try to determine if it is coming from my house or yours. i think this is communication. right now communication is controlled by those who want to continue their free ride. i thank you , sir , for seeing my point. as for myself , i am 69 years old , and i have been a witness to these events. i remember that when i saw the assasination of kennedy and then the warren report , i began to question all of this. i remember the quote by hitler , that “whoever is the victor will write the history books” and so it appears that someone or something is attempting to assasinate , not sure if this is the correct word , but again , to destroy the poor and the so called “middle class” and so , the republican tea bag party keep referring to “class warfare” because this is what they fear the most. this is a war they can not win. as for me , i do not want to be involved in this war. all i want is for my grandchildren and great grandchildren to grow up in the country that i remember. i remember trumen , and eisenhower. i remember how plentiful jobs were. i can tell you this. that reagonomics , and this new world order and free trade will destroy jobs. have a good day.

  • Glenn Contrarian

    Clavos –

    What you’re saying makes sense…but only for those companies doing business only within the United States. For those businesses who operate overseas as well, whatever taxes they pay to do business in other countries, by your logic those companies pass on the cost of those taxes onto American taxpayers, too.

    So why, then, shouldn’t we force any international company doing business in America – Exxon comes to mind, since they paid less in taxes than what I have in my wallet right now – to pay the taxes they should be paying so that the cost can also be passed on to customers in other countries?

    Or should American taxpayers continue to be disproportionately burdened?

    Furthermore, why should we continue to subsidize multinational companies by giving them huge tax breaks? They’re going to do business here anyway since we are still by far the biggest market in the world. But in the SOTU address, when Obama proposed taking the subsidies away from Big Oil (that pays little or no taxes anyway!) and using the money instead to enable green and renewable energy, Speaker Boehner was obviously displeased at that, and the Republicans who were taking their cue from him applauded not at all….

  • howard

    i am not sure i want to target corporations on their taxes??? moreover i want the tax rate on individuals targeted. example is this. any and all income below $ 30 thousand should be tax free. from 30 up to $50 thousand , maybe 1%. then graudually raise this percent as you get to $250 thousand. now above $250 thousand and up , the percent will rise up to a cap of 90% , just as it was during world war two. now a corporation tax will be severe to those companies who chose to locate and outsource jobs to say china or india. this is long overdue. but for companies who employ workers here in the u s a , pay zero taxes. again , this is long overdue.

  • Clavos

    I have felt for a long time that the tax burden was being shifted to the middle class of America.

    You’re right, except that it hasn’t shifted in recent years, it’s always been that way — the middle class bears the entire burden of the country, taxes especially. We pay the corporate taxes, too. Corporations pay them to the government (when they do), at which point (when paid) they become a “cost of doing business” and get built into the price of whatever they are selling us. In short, corporations don’t pay taxes, even when the send the money to the government; we do.

  • mcgman

    It is about time that we go after the corporations that don’t pay their fair share of taxes. It only makes sense to go after the corporations since they are the ones who pay off the politicians. When the politicians see that the heat is being applied to the corporations, they will be more likely to pass bills prohibiting the hiding of assets and the non-payment of taxes. I have felt for a long time that the tax burden was being shifted to the middle class of America. We need to go after the corporate tax dodgers and then develop a truly progressive tax code. The highest paid hedge fund manager made approximately $4,000,000,000 in 2009 – that’s right, 4 billion dollars. He/she could be taxed at 75% at the federal level and that person would still have a billion to play with.
    To quote a famous movie line, “I’,m mad as hell and I’m not going to take it anymore!” The sleeper has been awakened by Scott Walker and his greedy minions.

  • Clavos

    What I’m saying is, the government as a whole, regardless of party, can be swayed by a popular uprising…

    I hope so, Jon,I really do, because the government itself doesn’t seem to be up to the job of correcting what’s wrong, and we sure have lots of “wrong.”

  • Clavos

    Jon, what I’m hearing is that the national sentiment is swinging AGAINST the government unions, but not the private sector ones

    As well it should, since those workers receive better compensation packages (wages + benefits) and because of stronger unions and the fact that the government NEVER cuts back — not even in recessions, enjoy near total job security.

  • Clavos

    The corporate chiefs, canny devils that they are…

    yeah, all 3 of ’em in the top 15…

  • Clavos, yes, both parties are in the pockets of special interests. What I’m saying is, the government as a whole, regardless of party, can be swayed by a popular uprising. The unions may be spearheading the protests in the Midwest, but the unfair treatment of unionized government employees has tapped into the passions of something much wider than that: what we might call the liberal base.

  • Boeke

    Who cares if the dems are more hurt than the reps?

    The corporate chiefs, canny devils that they are, buy BOTH sides. Now THAT is called a successful hedge.

    And it’s generally the case that campaign funds DO buy election victories.

  • Clavos

    Can union-inspired protests + US Uncut coalesce into such an uprising?

    Probably not, because the pols (especially the Dems) are in the pockets of the unions as well; in fact, the unions are among the biggest donors to politicians. For example, according to Opensecretsdotorg, from 1989 to 2010, these unions gave:

    American Federation of State, County and Municipal Employees (AFSCME): $43,477,361 (98% to Democrats)

    International Brotherhood of Electrical Workers (IBEW): $33,056,216 (97% to Democrats)

    National Education Assn. (NEA): $32,024,610 (93% to Democrats)

    Laborers Union: $30,292,050 (92% to Democrats)

    Teamsters Union: $29,319,982 (93% to Democrats)

    Carpenters & Joiners Union: $29,265,808 (89% to Democrats)

    Service Employees International Union (SEIU): $29,140,232 (95% to Democrats)

    American Federation of Teachers (AFT): $28,733,991 (98% to Democrats)

    Communications Workers of America (#14): $28,376,306 (98% to Democrats)

    These unions are all in the top 15 of donors for that period.

    In addition to the unions, the top 15 included ActBlue (which is #1). ActBlue is a Democratic (only) PAC. It gave the Dems more than $51 million.

    Also in the top 13:

    AT&T Inc (#2): $46,292,670 (44% to Dems, 55% to GOP)

    National Assn of Realtors (#4): $38,721,441 (49% Dem, 50% GOP)

    Goldman Sachs (#5): $33,387,252 (61% Dems, 37% GOP)

    American Assn for Justice (#6): $33,143,279 (90% to Dems — no surprise there)

    Citigroup Inc (#15): (50% Dems, 49% GOP)

    And that’s it. Very few corporations (3 + 1 trade association and 1 Professional Association), and even they gave more money (in the aggregate) to the Dems than the Reps.

    So, by all means, lets stop corporate and union donations; it will likely hurt the Dems more than the Reps.

  • MW – Yes! Problem: if laws need to be changed to eliminate these tax havens, it has to be Congress that changes them. And Congress is in the pockets of the companies that use the tax havens. Only a very large upwelling of popular dissent can be a stronger influence on the politicians than corporate backing. Can union-inspired protests + US Uncut coalesce into such an uprising? Time will tell.

  • MW

    Actually, the beef is with the corporations that put their money in offshore accounts called ‘tax havens’ in order to make it appear that they lost money. Make the tax havens go away and enforce honest income reporting…then pay your taxes.

  • Clavos

    Unless, of course, the congressmembers are bought and paid for by the corporations.

    The beef is still with the congresscritters; they weren’t elected to be on the take.

    If your congressman is taking bribes from corporations he’s certainly not representing you; on the other hand, if her refuses the bribe, he’s probably not in office.

  • Boeke

    “US Uncut’s beef is with Congress, not the corporations.”

    Unless, of course, the congressmembers are bought and paid for by the corporations.

    Wouldn’t the officers of a corp be remiss and unresponsive to their shareholders if they didn’t use every opportunity to bribe congressmembers? There is a very high ROI on political bribery, better than R&D budgets, better than employee education, and even better than executive bonus plans!

    After all, SCOTUS has proclaimed bribery is free speech and thus immune to government control.

  • Yes… I very much wonder if the “enemy” here can be identified well enough to be affected by such protests. Taking aim strictly at corporations ignores the dynamic by which politicians pretty much just do the bidding of their corporate funders.

  • Clavos

    If these corporations are underpaying their taxes by taking legal deductions, US Uncut’s beef is with Congress, not the corporations.

    Anyone, individual or corporation, who doesn’t take every deduction legally available to them is mismanaging their money.