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Entries tagged "Corporations"Page 1 • 2 • 3 Next
July 31, 2012 · By Hilary Matfess
The media spectacle surrounding the Supreme Court’s upholding of the Affordable Care Act eclipsed another important judgment the Court made that week. In American Tradition Partnership, Inc. v. Bullock, the Court voted 5-4 to reaffirm its Citizens United v. Federal Election Commission decision, the controversial campaign finance case in 2010. In Citizens United, the court's majority argued that political spending is a form of speech and that restrictions upon that speech would violate corporations' first amendment rights. The Bullock ruling overturned a Montana Supreme Court decision that affirmed a century-old voter-approved ban on corporate spending in the state's elections. This reinforcement of the Citizens United decision has grave implications for the legitimacy of our democracy and our constitutional rights. It should serve as a rallying point for grassroots movements.
The Citizens United decision and the Bullock affirmation are both ushering in a stampede of corporate contributions to candidates and parties. The dismantling of regulations on corporate expenditure on elections has no clear stopping point, particularly when the nation's highest court seems intent upon granting them legal status as citizens. These precedents make it easier for corporations to exercise the rights of American citizens without corresponding civic responsibilities.
The Roberts Court apparently believes that corporate rights are more important than those of U.S. citizens. It's also making it harder to prosecute corporations. The Alliance for Justice, an advocacy group that compiles annual reports detailing the Supreme Court cases concerning corporate rights, has found that “under the leadership of Chief Justice John Roberts, the Court has radically rewritten laws in order to shield big business from liability, insulate corporate interests from environmental and antitrust regulation, make it easier for companies to discriminate against women and the elderly, and enable powerful interests to flood our election process with special interest dollars.”
The Constitutional Accountability Center found that the U.S. Chamber of Commerce, a prominent business lobby, enjoys a 68 percent success rate when filing briefs with the Roberts Court, a significant improvement over the 43 percent success rate it experienced under Chief Justice Warren Burger and the 56 percent rate under Chief Justice William Rehnquist.
The Supreme Court is, ideally, divorced from ideology and committed to the notion of justice when considering the constitutionality of laws and events brought before it. The Roberts Court, however, has an ideologically motivated agenda that influences its decisions. The judicial activism this Court engages in doesn't benefit the people of the United States. One has to look no further than its Exxon Shipping Company v. Baker ruling, in which the majority ruled that the punitive damages that the oil behemoth owed the victims of the Valdez oil spill be slashed from $2.5 billion to $500 million, to see where the Roberts Court’s sympathies lie.
In light of the elevated legal status the Roberts court has bestowed upon corporations, a grassroots movement towards community-centered businesses and banks is essential. It's up to us to maintain the integrity of our rights. There are many ways for us to roll back the power the Roberts Court has handed corporations. Simply buying your peaches at a farmers market or moving your money to a community-based credit union are great first steps.
This fight, however, requires more than just an informed citizenry wielding the power of their purse strings. In addition to making community-conscious decisions, combating a Supreme Court at odds with the interests of the American public requires voting for legislators who will pass laws restricting the rights and powers of corporations and a president who will enforce these laws. The 2012 elections offer all Americans an opportunity to demonstrate our opposition to the Roberts Court's agenda.
Everyday decisions, such as where to buy our coffee, where to invest our money, and whom to elect, empower us to reshape our economy to value people over profits. Every community-conscious choice that we make pushes back against the agenda of the Court; just imagine the power of 300 million Americans mindfully choosing local businesses and progressive politicians over corporations.
Hilary Matfess is an Institute for Policy Studies intern and a Johns Hopkins University student.
February 29, 2012 · By Emily Schwartz Greco
The Supreme Court heard arguments in a crucial case yesterday that could have major ramifications for corporate accountability.
In Kiobel vs. Royal Dutch Petroleum Co., the multinational oil giant commonly known as Shell is accused of helping the Nigerian government commit atrocities.
A dozen Nigerian citizens, all granted political asylum in the United States, filed the lawsuit. These refugees include victims of torture and people with relatives who were executed. The suit is named after Esther Kiobel, the widow of one of the victims. The court's conservative justices, who are in the majority, indicated that they may opt to side with the corporations, the Los Angeles Times reports.
To get a firm grasp of the importance of this case, please read this op-ed that Peter Weiss published last week in The New York Times. Weiss, a human rights law expert, pioneered efforts to use the Alien Tort Statute as a way to try the perpetrators of human rights crimes committed abroad in U.S. courts. In the commentary, he wrote:
If the Supreme Court rules in favor of Royal Dutch Shell and against the plaintiffs, multinational corporations — particularly in mining and other extractive industries — could draw the lesson that it is now safer to forge alliances with autocratic regimes that have poor human rights records because they will not be judged culpable in the way individuals can be.
Today, the Times' online edition features a debate about corporate and human rights. It includes an essay by Vincent Warren of the Center for Constitutional Rights (CCR), who argues that since corporations obtained "extensive rights," in the Citizens United ruling, "now we must enforce their responsibilities."
Weiss is CCR's vice president and a former chair of the Institute for Policy Studies board of trustees. His op-ed concludes with a comparison of Citizens United and Kiobel:
The Supreme Court has "an extraordinary choice to make, in juxtaposition to its previous ruling in Citizens United: whether to accept an argument that, in effect, leaves corporations less culpable than individuals are for human rights violations committed abroad — or whether to hold that if a 200-year-old law can be used to hold individual violators to account, it can be used against corporate violators as well.
A decision affirming that Shell should go unpunished in the Niger Delta case would leave us with a Supreme Court that seems of two minds: in the words of Justice John Paul Stevens’s dissent from Citizens United, it threatens “to undermine the integrity of elected institutions across the nation” by treating corporations as people to let them make unlimited political contributions, even as it treats corporations as if they are not people to immunize them from prosecution for the most grievous human rights violations.
A more startling paradox is difficult to imagine.
Emily Schwartz Greco is the managing editor of OtherWords, the Institute's non-profit editorial service.
February 27, 2012 · By Adwoa Masozi
States across the US are excising billions of dollars from their education budgets as if 22% of the population isn’t functionally illiterate.
According to the NAAL standards of the National Center for Education Statistics 68 million people are reading below basic levels. The Center on Budget and Policy Priorities found that “nearly all states are spending less money (on education) than they spent in 2008 (after inflation), even though the cost of providing services will be higher.” On top of cutting 4 billion dollars from their budget, Texas has also eliminated state funding for pre-K programs that serve around 100,000 mostly at-risk children. North Carolina has cut nearly a half billion dollars from K-12 education resulting in an 80 percent loss for textbook funds and a 5 percent cut in support positions like guidance counselors and social workers among numerous other cuts. Decisions like these leave little reason to wonder why both those states are facing 27% drop out rates.
Closing public schools has so become the rage that the state of California has even produced a best practices guide on how to close and make them fit for turn-around. Why not promote a ‘best practices guide for keeping a school going’ instead? Why make these decisions when we know that a lack of education decreases access to quality (and legitimate) employment opportunities, increases the likelihood of encounters with the criminal (in)justice system, negatively impacts health outcomes, and altogether limits one’s ability to determine her or his own future?
What we’re witnessing is a systemic recasting of education priorities that gives official structure and permanence to a preexisting underclass comprised of largely criminalized poor black and brown people. Certainly having a prominent underclass isn’t new to the US as it has quite the track record of denying fill-in-the-blank people fill-in-the-blank rights. But the material outcomes of this shift are as communally and economically devastating as were the outcomes of the Black Codes in the 1800s and subsequent Jim Crow laws that persisted until 1965; both of which were legal, with implementation that varied from state to state and still impacts communities today.
The collusion between this government and private interests are not new either. It is not a coincidence that at the same time neighborhoods with high incidences of black people are being destabilized and displaced through fast track urban-land grabs, or gentrification, by developers empowered by local municipalities states are divesting from the public school infrastructure serving them. This is an insidious process that forces the hand of communities. Public education is something more than a right, a liberty, or a privilege. It is a need. One as basic and inarguable as the land we must walk on, food we must eat, water we must drink, and air we must breathe to live. For absolutely nothing will or can be done in human society without it. So who would want to send their children to schools that have police presence and metal detectors in place of books? Or to overcrowded schools with teacher to student ratios of 1 to 30 and little to no extra curricular activities or wrap-around services? These are the material consequences of divestment from public schools. Who wants to send their children to schools in neighborhoods that are mini-police states? If it can be helped, no one.
Charter schools by definition aren’t the real problem. They have been practical and creative solutions to educating children when needs go unmet. Forming alternative centers of education has been a norm practiced in communities across the country since the 1800s. But what we have today is something very different. Charters now elbow out established public schools in part or completely. Corporations like Wells Fargo, BOA, JP Morgan,and Wal-Mart, all major investors in private prisons and players in corporate education reform, have extraordinary influence on education policy at the state and federal levels.
Parents, students, teachers, and other relevant stakeholders are manipulated into making a false choice, drawing a line in the sand where the wrong group of people is on the opposing side. Whether for public schools or charters, both sides want the same outcomes - creative, critical thinking students who are equipped to participate fully in their community and society at large. Instead of charters continuing to operate as creative workarounds, especially for communities in crisis, sharing in the resources for the public, they’ve been co-opted. Now taking an antagonistic role towards traditional public schools.
While these turf wars are being fought, the children who don’t make it into the tier one schools or roll sevens in the charter lotteries are left behind and to their own devices in these poorly administered, under resourced and overcrowded schools.
Forty-six percent of the 2.3 million people incarcerated are without a high school diploma and the skills to compete in an ever-shrinking job market. This means roughly a million people won’t ever get a shot at what should already be low-hanging fruit—a low-waged, skill-lite, benefit-deplete, socially unrewarding job with a work environment that’s likely to be mentally and spiritually stifling.
Little guesswork is needed around what will happen to these unskilled and undereducated millions who have been failed by these schools that continue to be eroded. It is the prisons that will have them; for these youth are the preferred meat of the criminal (in)justice system.
This is why we can have record closings of public schools throughout the country, and at the same time witness the rise of corporate backed charter schools and private prisons. The message to the people being that a select few will be educated and the rest will be locked in struggle against their own commoditization. This is why we must continue to fight.
January 26, 2012 · By Chuck Collins
(Park City, Utah) — "We're Not Broke," a lively documentary about the ways that wealthy individuals and global corporations dodge taxes, had its world premiere on Sunday at the Sundance Film Festival.
The timing couldn't have been more extraordinary. Just two days earlier, the Associated Press reported that Republican presidential candidate Mitt Romney has up to $32 million in offshore bank accounts, mostly in the Cayman Islands. Two days after the film's debut, Romney bowed to mounting pressure and released his damning 2010 and 2011 tax returns, and President Barack Obama called for a new mandatory 30 percent tax rate on Americans earning $1 million or more each year.
Directed by Karin Hayes and Victoria Bruce, "We're Not Broke" visually and expertly explains how "offshore "banking enables the richest 1 percent and several thousand transnational corporations to avoid regulation, taxes, and accountability.
Unlike other documentaries about corporate abuses, "We’re Not Broke" inspires viewers to see themselves as agents of change. The film stands out in is its portrayal of ordinary people learning about the offshore system and taking action. It profiles the emergence of US Uncut, and follows how its activists engage in direct action at Bank of America, Verizon, Apple, and other tax dodgers.
There are an estimated 60 tax havens — formally called "secrecy jurisdictions" — around the globe. The countries have loose incorporation rules, bank reporting standards, and financial transparency requirements. People in the U.S. are more aware of Caribbean tax havens such the Cayman Islands, Bermuda, and the Bahamas. But technology and pharmacy companies often create subsidiaries in countries like Ireland and the Netherlands to hold patents and intellectual property to reduce their U.S. tax bills.
The offshore system has spawned a gigantic tax avoidance industry, with teams of lawyers and accountants who add nothing to the efficiency of markets or products. In 2011, reports about General Electric's storied tax dodging dramatized the ways that modern multinationals view their tax accounting departments as profit centers.
At a time when federal and state lawmakers are grappling with huge budget deficits, the impact of corporate tax dodging is getting new attention. Tax havens are costing us more than an estimated $100 billion of lost revenue each year. And a coalition of over 20 U.S. companies have launched their "WIN America" campaign to lobby for a "tax holiday" on $1.2 trillion in overseas profits they want to bring back to the U.S. without paying the back taxes they owe.
"We're Not Broke" portrays the "business case" for closing down the off shore system with profiles of several small business people who are at a competitive disadvantage with global corporate tax dodgers.
The documentary will probably figure into the election debate, given how Obama used his State of the Union address to highlight the tax system's deep inequities in the. If Mitt Romney nails the GOP nomination, the abuses of the offshore system will draw plenty of attention.
Romney's spokespeople argued the candidate was pursuing normal tax reduction schemes. But the offshore system is a rigged game, benefiting a small handful in the 1 percent of wealth holders and a few thousand global corporations. "It may be legal, but these are loopholes that show problems in our tax code," said Nicole Tichon, executive director of Tax Justice Network USA, an organization that promotes tax transparency. "The bottom line is, they're taking advantage of a system that's flawed."
Chuck Collins, co-author of the Institute for Policy Studies report, America Loses: Corporations that Take Tax Holidays Slash Jobs, is a featured expert in "We're Not Broke." www.ips-dc.org
November 7, 2011 · By Sam Pizzigati
Over a quarter century ago, in 1984, the Washington, D.C.-based Citizens for Tax Justice released its first in-depth report on how much America's top profitable corporations were actually paying in taxes.
America's top companies, this initial study found, were paying only 14.1 percent of their profits in taxes, less than a third of the corporate tax rate then in effect.
That startling report left a bit of an uproar in its wake. Corporate tax loopholes would go on to figure prominently in the 1986 tax reform debate. The tax legislation eventually enacted would plug a host of them.
But the 1986 tax reform legislation also slashed tax rates on high personal incomes. Corporate earnings now faced a higher tax rate than the income wealthy Americans reported on their personal tax returns.
What happened next should have been predictable: Businesses that could easily change their tax status, to take advantage of the new lower personal tax rates, reorganized into "sole proprietorships" and the like. Income that had been taxed at corporate rates now began showing up on individual tax returns.
This tax-status shifting would not be an option for America's biggest corporate powerhouses. GE couldn't become a "sole proprietorship." So execs at these corporate giants did the next best thing. They invested heavily in politics and had their lobbyist legions carve out huge new loopholes in the tax code.
The latest Citizens for Tax Justice corporate tax report, just released, details the result: America's top corporations are now getting what essentially amounts to a 50 percent discount off their tax bills.
By current statute, corporations are supposed to face a basic 35 percent income tax on their corporate profits. Over the last three years, the new Citizens for Tax Justice report documents, top U.S. corporations have actually been paying only 18.5 percent of their profits to Uncle Sam.
Corporations, in effect, have achieved total tax loophole parity with America's individual super rich.
The nation's top 400 income-earners, the latest IRS stats show, are supposed to be paying taxes on their top-tax bracket income at a rate of 35 percent, the same as the corporate rate. These 400 mega millionaires and billionaires are actually paying taxes at an effective rate of only 18.1 percent.
How are corporations getting away with what amounts to a 50 percent tax discount? The new Citizens for Tax Justice research walks us through all the major loopholes.
Corporate executives, the group's new report explains, are shifting and stashing their corporate profits overseas. They're taking huge "accelerated depreciation" write-offs on suspect investments. They're even turning their own stock option windfalls, incredibly enough, into super corporate tax savings.
This infuriating stock option loophole works by a simple formula: Corporations grant their top execs "options" to buy millions of shares of company stock at a cost below the going market rate. The companies then deduct off their corporate taxes the difference between the price executives pay to get the shares and the higher marketplace price they get when they sell them.
Two-thirds of the 280 corporations Citizens for Tax Justice examines in the group's new corporate tax report claimed these option deductions over the 2008-2010 period. These deductions saved the 185 corporations involved $12.3 billion.
Overall, the 280 profitable companies that the new Citizens for Tax Justice study focuses in on grabbed a combined $1.4 trillion in profits over the three-year 2008-2010 time span. These 280 corporations could have paid, under the tax code, over $473 billion in federal corporate incomes taxes. They actually paid only $250.8 billion, a tax discount of $222.7 billion.
The tax subsidy "discount" for 2010 alone: $85.1 billion. Over a decade, that annual tax avoidance savings adds up to well over three-quarters of a trillion dollars, enough to fill all sorts of holes in the federal budget — and "avoid" massive cuts in public services.
Another perspective on the new Citizens for Tax Justice numbers: In the 1950s tax dollars from corporations offset about a quarter of federal outlays. Last year, corporate tax dollars covered only 6 percent of federal expenditures.
Shutting off corporate tax loopholes, concludes Citizens for Tax Justice, would bring "real benefits" for Americans, everything from "reduced federal budget deficits" to "more resources to improve our roads, bridges, and schools — things that are really important for economic development here in the United States."
But closing off corporate tax loopholes would not bring "real benefits" to everybody. The power suits who run America's top corporations are doing just fine under current tax arrangements.
In 2010, Institute for Policy Studies researchers revealed earlier this year, CEOs at 25 of America's largest corporations — major firms that range from Boeing to Verizon — took home more in personal compensation than the companies they run paid in federal income tax. These top execs averaged $16.7 million each.
Rewards this impressive give top corporate executives a powerful incentive to continue their tax avoidance ways.
In the 1950s, by contrast, this incentive didn't exist. CEOs back then had a distinctly limited income upside. A powerful trade union presence in America's workplaces and tax rates as high as 91 percent on personal income over $400,000 served to keep huge corporate executive windfalls off the table.
Labor journalist Sam Pizzigati edits Too Much, the weekly Institute for Policy Studies newsletter on excess and inequality. www.toomuchonline.org