The other night I wrote an article about how oil companies in Oklahoma (who certainly aren’t lacking for profit margins) receive additional subsidies from the state, while things like storm shelters for older schools go unfunded. As outrageous as this is, it is a small example of a much larger problem.
While Congress was busy as usual trying to find anything they can possibly use to undermine the President and set the stage for 2014 elections and beyond, the Senate investigated Apple’s tax-dodging strategies. In an article by Business Insider, it outlines the highlights of the Senate report which found that the makers of the iPhone manage to dodge literally billions of dollars in taxes every year through offshore tax shelters and loopholes in the corporate tax code.
It isn’t just Apple that does this; Google and other tech giants use countries like Ireland to pay less taxes off the profits they make in the United States. Often when they do pay taxes, it is to a country on whose infrastructure and educational system they didn’t use to make their profits.
They manage to do this because of the fact that when it comes to taxes, they’ve bought the politicians and accountants who allow it to happen. You probably can’t afford your own politician and I certainly can’t, but they can — and with Citizens United, they can use the same tax-dodging tactics to funnel some of these untaxed profits into the campaigns of legislators (both sides of the aisle are guilty) to further stack the deck in their favor.
But looking only at the surface fails to acknowledge the big picture — the biggest problem lies within our outdated tax code. Most of it was written long before corporations like Apple or Google were bringing in billions of dollars, and as such these corporations have had years — and the best accounting help available — to figure out how to maximize their profits. As far as we can tell, what they’re doing is not illegal, and that’s a major problem. The tax code needs to be rewritten to include specific wording on this type of tax avoidance, as well as specific penalties that supersede simple monetary penalties, which are nothing but a drop in the bucket for huge multinational corporations. The blame lies squarely in Washington for this still not having been done. This, of course, circles right back around to the fact that our elected officials have had no pressure to do this — and have been rewarded handsomely for looking the other way when it comes to corporate tax avoidance.
Some people like to say “we don’t have a revenue problem, we have a spending problem,” but they’re wrong and they know they are. When companies sell billions of dollars of product every year in a country, and also use that country’s infrastructure and workers for their benefit while purposefully avoiding paying their full share of owed taxes… well, that’s blatant exploitation at best, and economic treason at the worst. Close the loopholes, draft specific penalties for tax avoidance and make things clear rather than muddying the waters and asking for trouble. Until then, we will continue to see these corporations take advantage of a system (and a country) that allows it to happen.
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