As the plutocracy’s assault on the nation’s social safety net intensifies, recent data shows that billionaires and corporations are refusing to pay hundreds of billions of dollars in owed taxes every single year. Criminal evasion on such a scale should put all the hand-wringing about recent George Floyd “looting” into perspective.
The next time you hear conservative politicians insist they want “law and order,” hate “robbing,” and believe America can’t afford new government programs, show them two hugely important reports that came out/became visible in the last twenty-four hours. The data in those analyses tell the story of conservative politicians letting billionaires and corporations evade laws and loot hundreds of billions of dollars from the public treasury – all while those same politicians plead poorness to give a good reason for cutting the social safety net during a deadly pandemic.
The first report came from the non-partisan Congressional Budget Office (CBO), which found that between 2011 and 2013, $381 billion in taxes went unpaid every single year. Couple that data with recent Harvard University research showing that the top 1 percent of income earners are responsible for 70% of the tax gap, and you start seeing the full picture: The richest sliver of people/of the group is taking away about $266 billion owed in taxes from the American public every year.
That tax gap didn’t just magically happen — it results from conservatives’ huge cuts to the Internal Revenue Service’s enforcement budget, which resulted in an especially steep and dangerous decline in audit rates for the super-rich. In fact, the $266 billion figure could be only the tip of the iceberg because the congressional budget analysts were guessing at the tax gap that existed before those IRS budget cuts.
“With the money that these tax cheats owe, this year alone, we could fund tuition-free college for all, eliminate child hunger, ensure clean drinking water for every American household, build half a million affordable housing units, provide masks to all, produce the protective gear and medical supplies our health workers need to combat this pandemic, and fully fund the U.S. Postal Service,” said Senator Bernie Sanders, who requested the CBO study. “That is an absolute outrage, and this report should make us take a long, hard look at what our national priorities are all about.”
“SHIFTING OVER $1 TRILLION IN REVENUE EVERY YEAR TO CORPORATE TAX HAVENS”
Just after the government-related report was released, the Tax Justice Network released a separate study showing that newly released international data prove “that instead of declaring money made in the countries where they were created, huge company firms operating around the world are moving over $1 trillion in profits every year to corporate tax havens — moves that take away $330 billion in taxation from governments, money that’s owed but not being paid.
The study noted that just four small countries – the UK, Netherlands, Switzerland, and Luxembourg — “are together responsible for half of the world’s corporate tax avoidance.”
The United States alone is losing about $60 billion of revenue a year because of these corporate tax avoidance schemes, according to Reed College money-flow expert Kimberly Clausing.
In case you thought the tax haven shenanigans were just limited to corporations, jog your memory and recall the Panama Papers and Credit Suisse scandals that spotlighted how wealthy individuals have gotten in on the offshore schemes.
"WE KNOW HOW TO FIX THINGS, BUT OUR POLITICAL SYSTEM IS RIGGED"
At a time when the social safety net is being dismantled in the name of budget austerity, the ruling class refusing to pay owed taxes is a weird and ugly form of robbing. So what is Washington doing in response to all this?
On the domestic front, Donald Trump began his time as President proposing more IRS budget cuts. But this year, the White House is pushing for an increase. At the same time, though, Trump’s Justice Department is prosecuting far fewer criminal cases referred by the IRS over the last 5 years, such prosecutions have dropped by over 66% according to data collected by Syracuse University researchers.
On the international front, Trump’s 2017 tax cut bill included measures to “encourage American-based corporations to shift profits offshore,” according to the Institute for Taxation and Money-based Policy. The management has also moved to roll back rules designed to crack down on ‘corporate inversions’, by which companies incorporate offshore to avoid tax liabilities. And thanks to Trump’s coronavirus laws, firms that were already using ‘corporate inversion’ could now be rewarded with Federal Reserve rescues, according to Bloomberg News.
"THE PROBLEM HERE ISN’T THAT WE LACK THE KNOWLEDGE TO FIX THINGS. THE PROBLEM IS OUR POLITICAL SYSTEM AND OUR POLITICIANS."
The lawmakers with the power to improve enforcement and crackdown on revenue shifting operate inside a machine that runs on legal bribery. Some of them are trying to do the right thing, but most of them are paid-for, in part, by wealthy patrons and a corporate oligarchy enriched by lazy tax enforcement and offshore tax evasion. Those bought-and-paid-for lawmakers will publicly insist they want “law and order” and argue against robbing, but they’ll allow unregulated big business and tax lawlessness to continue, while they pretend there’s no money to pay for anything.
Meanwhile, because groups of people who fight for fair treatment, voting activists, and political leaders are organized around particular programs and issues – say, Medicare or public education – there remains no large group of voters organized around the general goal of cracking down on tax cheating — even though such a crackdown could provide new useful things/valuable supplies for key programs and issues.
Maybe all of this can change. Maybe the rise of ordinary people, funded by the grassroots, elected into the system, can break the link between corrupt politicians and policies that encourage tax theft. And maybe one day we will see more clear organizing, movement building, and public education around the tax issue — it has started happening in the United Kingdom, where some celebrities have made tax fairness their cause, so perhaps it can happen in the United States.
But if it doesn’t happen, hundreds of millions will continue fighting over a few budget crumbs while the 1% keep taking bigger and bigger bites of the national revenue pie.