Want to avoid the fiscal cliff….stop spending so much money.
Spending by the federal government has an average increase of over 700 billion per year. In 2012 federal spending reached a staggering 3.6 trillion. 18.7 % of which, was spent on defense. It was government pensions that took up 1.1 trillion dollars and nearly 1/5 of the budget. Any financial analyst worth his salt has prophesied on the looming spending cuts. Considering that entitlement programs account for 61.9% of our expenditures, these are the biggest and easiest targets for politicians. However, it doesn't help your disabled brother who works part time as a greeter for Walmart because it’s the only job that will hire him while he is on medication to control the severe anxiety and PTSD he developed while serving in Iraq.
With the proliferation of tax shelters and the use of gaping loopholes in the tax code, the corporate contribution to the tax base has dwindled to a mere 7.9%. (See Graph) Bank of America, J.P. Morgan Chase, and Goldman Sachs are only the top three of 31 companies that Senator Bernie Sanders put in his report “Meet the top wall street and corporate tax dodgers”. Filed with the United States Senate on February 7th 2013, the report outlines the some of the most egregious examples of corporate tax shelters, so much so that it literally boarders on evasion.
According to his report “Senator Sanders is introducing legislation to crack down on Wall Street and corporate tax avoiders that are dodging tens of billions in taxes every year by shifting profits to the Cayman Islands and other tax havens. Rep. Jan Schakowsky (D-IL) is introducing the companion bill in the House”
Businesses and CEO’s named explicitly in the report included General Electric: CEO Jeffrey Immelt. With 14 tax havens with an estimated $102 billion in offshore accounts, General Electric avoided paying somewhere in the neighborhood of $35.7 billion. Sign Of The Times an excellent online news source, published a break-down of the report. “Amount of federal income taxes paid in 2010? Zero. $705 million tax refund.
In 2010, Verizon received a $705 million refund from the IRS despite earning $11.9 billion in pre-tax U.S. profits.
Amount of federal income taxes Verizon would have owed if offshore tax havens were eliminated? $525 million.
Verizon has stashed $1.5 billion in offshore tax havens to avoid paying U.S. income taxes. Verizon would owe an estimated $525 million in federal income taxes if its use of offshore tax avoidance was eliminated. How many American Jobs were cut in 2010? In 2010, Verizon announced 13,000 job cuts, the third highest corporate layoff total that year.”
When business practices such as these go overlooked or ignored by the very governing body that is in charge of regulation, as the Finance Committee, IRS and Congress are, one could only conclude that there is a reason. Millions of dollars every election cycle are doled out to politicians from big businesses. Since the Citizens United decision was handed down by the Supreme Court our political system has become what is tantamount to legalized bribery. With politicians beholden to such huge corporations we have seen the corporate contribution to the tax base dwindle to a mere 4.7%. The companies that make the most in profits pay the least in taxes.
It is corporations that have kept our nation at war for the last ten years. With huge lucrative defense contracts, it is in their best interest to continue occupation of oil and mineral rich countries. Politicians owe their positions of power to these businesses and in turn vote accordingly on legislation that keeps the profits flowing.
As we inch ever closer to the so called “fiscal cliff” it is imperative that we have an intricate and detailed accounting of institutions such as the Federal Reserve and the intelligence agencies. It is also incumbent upon us to demand oversight of the entitlement programs that corporate sponsored politicians seem to be so keen on cutting. Oversight committees should be independent of both parties and corporate influence. One way that this could be insured, is to have all oversight staffed by regular citizens with a background in business. It could be instituted like jury duty. With proper compensation and a thorough selection process there could be much accomplished.
With the current system in place there is literally no hope for the rampant spending in Washington. As long as we the people allow our representatives to dictate how our tax dollars are spent we with forever increase our debt and decrease our quality of living.