“Ten Filthy Rich, Tax-Dodging Hypocrites” by Alternet: 8 out of 10 are Registered Republicans!

October 28, 2012


SATURDAY, OCT 27, 2012 03:53 PM EDT

Ten filthy rich, tax-dodging hypocrites

The “Fix the Debt” coalition pushes tax breaks for the rich and saddles the rest of us with the burden they created


Ten filthy rich, tax-dodging hypocritesGoldman Sachs CEO Lloyd Blankfein(Credit: Jason Reed / Reuters)

This article originally appeared on AlterNet.

Brace yourself for one of the most aggressive corporate lobbying campaigns of all time. And one of the most hypocritical.


Fix the Debt ” is a coalition of more than 80 CEOs who claim they know best how to deal with our nation’s fiscal challenges. The group boasts a $60 million budget just for the initial phase of a massive media and lobbying campaign.

The irony is that CEOs in the coalition’s leadership have been major contributors to the national debt they now claim to know how to fix. These are guys who’ve mastered every tax-dodging trick in the book. And now that they’ve boosted their corporate profits by draining the public treasury, how do they propose we put our fiscal house back in order? By squeezing programs for the poor and elderly, including Social Security, Medicare, and Medicaid.

Fix the Debt claims their agenda is not just about spending cuts. But when it comes to their tax proposals, they use the slippery term “pro-growth reform” to push for cuts in deductions that are likely to include credits for working families and — you guessed it — more corporate tax breaks. Chief among these is a proposal to switch to a territorial system under which corporate foreign earnings would be permanently exempted (instead of being taxed when they are returned to America).

This idea, also supported by the Bowles-Simpson deficit commission, would make it even more profitable for big corporations to use accounting tricks to disguise U.S. profits as income earned in tax havens. Citizens for Tax Justice estimatesthat such tax haven abuse will cost the Treasury more than $1 trillion over the next decade.

So who are the CEOs who are telling the rest of us to be responsible and tighten our belts after they’ve spent decades stiffing the U.S. Treasury? Of the 80 members of Fix the Debt’s CEO Fiscal Leadership Council, here are 10 that stand out as the biggest hypocrites:

1. Jeffrey Immelt, General Electric

Perhaps no tax-dodging U.S. corporation has done more to drain the U.S. Treasury than General Electric. Over the last 10 years GE reported more than $80 billion in U.S. pre-tax profits and yet paid a federal corporate income tax rate of just 2.3% .

2. Jim McNerney, Boeing

Last year, Boeing was one of 25 major U.S. firms that paid their CEO more than they paid Uncle Sam in corporate income taxes, according to an Institute for Policy Studies report . The aerospace giant enjoyed a $605 million tax refund in 2011, despite reporting more than $5 billion in U.S. pre-tax profits. CEO Jim McNerney made $18.4 million in personal compensation. In fact, Boeing is aserial tax dodger , having paid federal corporate income taxes in only two of the last 10 years.

3. Lloyd Blankfein, Goldman Sachs

Few corporations have been as dependent on U.S. taxpayers for their very existence as Goldman Sachs. The 2008 bailout ofAmerican International Group and the steady stream of low- and non-interest loans for the financial sector have kept the company alive.

CEO Blankfein says he’d accept a small increase in individual taxes for the wealthy in exchange for a comprehensive budget deal. But his corporate tax proposals would wipe out the revenue gains from rolling back the Bush tax cuts for top earners. Blankfein is a big supporter of the territorial tax system explained above. This is hardly a surprise, since Goldman Sachs already operates 37 subsidiaries in tax havens .

Blankfein has also used his position at the helm of the Financial Services Forum, a club for the CEOs of 20 top banks, to oppose financial transaction taxes — small levies on trades of stock, derivatives, and other financial instruments. Goldman Sachs has made as much as $300 million per year from the volatile high-frequency trading strategies that would be hardest hit by such a transaction tax. In early October, 11 European governmentsannounced a plan to implement such taxes, with expected revenues in the neighborhood of $ 75 billion per year . But Goldman Sachs and other Wall Street firms have blocked U.S. progress on this major revenue-raiser.

4. Brian T. Moynihan, Bank of America

After a decade of risky and reckless mortgage lending, Bank of America survived the 2008 financial crash with the help of a $45 billion bailout. Today, Bank of America sits on $128 billion in cash — $18 billion of it is overseas —and much of that is sitting in the company’s 115 tax haven subsidiaries .

Last year, after investors saw their stock price decline 58 percent and 30,000 Bank of America employees lost their jobs to layoffs,CEO Brian Moynihan saw his compensation quadruple to more than $8 million. His predecessor, Ken Lewis, raked in more than $50 million in the two years before the housing bubble that Bank of America had help inflate burst in 2008.

5. David Cote, Honeywell Corporation

Over the last three years, Honeywell received more than $2.7 billion in federal defense contracts and reported more than $2.5 billion in U.S. pre-tax profits. And yet thanks to corporate deductions, tax subsidies, and loopholes, Honeywell has claimed $377 million in federal tax refunds during this period.

6. Randall Stephenson, AT&T

AT&T is another firm that paid its CEO more last year than they paid in federal corporate income taxes. CEO Randall Stephenson made $18.7 million , while the firm enjoyed a $420 million refund from Uncle Sam.

7. Arne Sorenson, Marriott International

In 2009, the U.S. Department of Justice prosecuted Marriott International for using an illegal tax shelter swindle dubbed “ Son of Boss .” The scam involved setting up a series of complex paper transactions between company subsidiaries to create $70 million in fake losses that could be offset against Marriott’s real profits. Presidential candidate Mitt Romney, a long-time friend of the Marriott family and named after Marriott’s patriarch J. Willard Marriott, was the head of the hotel giant’s audit committee in 1994 at the time the board first approved the Son of Boss transaction. According to Bloomberg, Marriott has also shifted profits to a Luxembourg shell company and avoided hundreds of millions of dollars in taxes through one federal tax credit for so-called synthetic fuel that Senator John McCain dubbed an “expensive hoax.”

8. Alexander Cutler, Eaton Corporation

Less than two years after accepting $90 million in taxpayer-financed subsidies to locate a new world headquarters in the suburbs of Cleveland, Eaton Corporation announced that it would be moving its headquarters and reincorporating as an Irish company. The move is part of a merger deal with Cooper Industries, another Fix the Debt coalition member. The two companies boast that Eaton’s departure after 100 years in Cleveland will cut their tax bill by $160 million . Meanwhile, Eaton is fighting a $75 million bill from the IRS for back taxes and penalties related to alleged violations of transfer pricing agreements.

9. Lowell McAdam, Verizon

Verizon is one of 30 companies identified by Citizens for Tax Justice as having paid “less than nothing” in federal income taxes over the entire 2008-10 period. Despite earning $32.5 billion in profits during these three years, the firm got so much in tax subsidies that they wound up with a net tax refund of $951 million. That works out to a tax rate of negative 2.9%. In effect, every Verizon phone customer paid more in federal telephone excise taxes than Verizon paid in federal income taxes.

10. Steve Ballmer, Microsoft

A recent Senate investigation exposed how Microsoft has used Olympic class accounting acrobatics to avoid paying taxes. Specifically, the Senate Permanent Subcommittee on Investigations charged that the software giant had devised a complicated transfer pricing agreement with a subsidiary in Puerto Rico to lower its tax bill on goods sold in the U.S. market by as much as $4.5 billion from 2009 to 2011. The investigation also accused Microsoft of avoiding billions in U.S. corporate income taxes by shifting royalty revenue to low-tax jurisdictions. Subcommittee Chair Carl Levin described Microsoft’s strategies as “tax alchemy, featuring structures and transactions that require a suspension of disbelief to be accepted.” Such alchemy, while not illegal, is a major contributor to the national debt.

Sanders to CEOs: Look in the Mirror

When Fix the Debt launched their 80 CEO-strong coalition on October 25, Senator Bernie Sanders responded by stating, “Before telling us why we should cut Social Security, Medicare and other vitally important programs, these CEOs might want to take a hard look at their responsibility for causing the deficit and this terrible recession.”

Instead, the Fix the Debt coalition members are portraying themselves as the honorable ones who are brave enough to push the tough austerity medicine that is the only remedy for our fiscal ills. Nonsense. We are the richest nation in the history of the world. Our problem is that too much of our wealth is going into the coffers of rich individuals and corporations and to pay for misguided wars.

There are numerous budget plans by Senator Sanders, the Congressional Progressive Caucus, and others that would get us on the right track. At the Institute for Policy Studies , we’ve identified a dozen policies that would collectively raise trillions of dollars to in ways that would not only address the fiscal challenge but help make our economy more equitable, green, and secure. The report also points out that until we recover from the current unemployment crisis, we should not be contemplating any spending cuts that could deepen the crisis.

The Fix the Debt coalition is using the so-called “fiscal cliff” as an opportunity to push the same old corporate agenda of more tax breaks while shifting the burden on to the middle class and the poor. If America’s CEOs really want to Fix the Debt, they should first commit to eliminating the loopholes that have allowed them to avoid paying their fair share of the cost of government, including investments necessary to keep our families and our communities strong and secure.


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