› Don’t trust corporate charity | Murtaza Hussain
[Whatever] these organizations put back into the communities in which they operate, communities which are often struggling under the weight of collapsing infrastructure, they expend far greater effort to ensure that they avoid paying their share of tax into public coffers. By avoiding taxes these companies ultimately help eliminate social services, a simulacrum of which they then provide in the form of charitable donations and other public outreach. The company keeps the funds it would’ve otherwise lost to tax and earns PR credibility for its supposed altruism, while the public loses out on the tax revenue which rightfully belongs to it. These taxes after all represent the funds which should have been available to make sure that Americans do not have to deal with substandard schools, crumbling roads, and deep cuts to social services; and to a large extent they are being withheld by the same corporations now offering charitable handouts. As an example, in the fiscal year 2010 the largest financial institutions in America paid an effective tax rate of only 11 percent, a rate which is below the legally mandated minimum of 35 percent and which itself is likely overstated through financial manipulation. A report published in 2011 by Citizens for Tax Justice revealed that 30 of the largest companies in America paid zero or even negative income tax (in the form of transfer payments from the government) between the years 2008 and 2010. The companies on this odious list include some of the most enthusiastic “corporate citizens” in the country such as General Electric, Dupont, and Honeywell. Through shrewd manipulation of tax loopholes, the utilization of offshore havens for profits, and often through direct lobbying of lawmakers, many of the same organizations making a show of their charitable generosity to the public are simultaneously taking much larger sums away from the very same people. It is estimated that closing tax loopholes and imposing fees on speculative transactions would generate $150 billion dollars in additional tax revenue per year from the financial sector alone. Wells Fargo, a company whose annual CSR report in 2010 proudly cited its contributions over the past two years of approximately $419 million to charitable organizations such as the Portland Housing Center (which provides assistance to new and low-income homeowners), paid only 7.5 percent tax on its income, and was also a recipient of $2.5 billion in federal income tax benefits during the same period; a massive figure which happens to be equal to the Obama administration’s proposed cuts of 50 percent to the Low-Income Home Energy Assistance Program. Perhaps if Wells Fargo had not neglected its responsibility to pay tax these types of cuts to services for homeowners would be unnecessary, as would be the need for any type of charity to make up a fraction of what was lost.
A list of the most charitable companies in America shows some of the biggest tax evaders in the country. These include heavyweights such as Goldman, Wells Fargo, BoA and Exxon Mobil; a company which made $41.1 billion in profits last year and paid only 17 percent in effective taxes, a far lower rate than the average U.S. citizen. The savings here vastly outweigh any donation which is subsequently offered in the spirit of “social responsibility”. The result of this neglect of public duty has been spending cuts across all areas of government, resulting in layoffs to teachers, the closing of hospitals and the slashing of benefits to the most vulnerable sections of society including children and the elderly. That these same corporate citizens turn around and give back a fraction of what they owe in the form of charitable donations (for which they of course can claim further tax benefits) is a cynical attempt to manage their public image in the face of the increasingly angry public backlash against their policies.
The private social safety net, provided by corporate donors as compensation for the public one which their tax avoidance helps shred, is a poor substitute for democratically accountable public spending. Besides being poorer, free of public oversight, and geared primarily towards public relations efforts, the private safety net is a rug that can and will be pulled out from under its beneficiaries at the slightest notice. [++]
› The invisible welfare state of the top one percent | Ezra Klein
Other programs, like Medicare, are provided by the government, but eligibility is mostly automatic, and recipients have paid into them. Beneficiaries of such programs are somewhat less likely to realize they’re on a government dole than beneficiaries of means-tested programs.
Then there’s what Mettler calls “the submerged state.” These policies are mostly, though not exclusively, tax breaks. They include the much-beloved home-mortgage interest deduction and the tax exclusion for employer-provided health care. Recipients of these policies — and there are tens of millions of them — are rarely cognizant that they’re benefiting from a government program.
But they are. “Indirect social policies offer benefits that are comparable to direct social benefits both in their purposes and in their costs,” Mettler and Koch write. “Both are targeted to specific groups of people, aimed to reward some kind of activity or some class of persons whom policymakers deem worthy of public support. From an accounting perspective, as well, both types have the same effect: They impose costs on the federal budget, whether incurred through fiscal obligations or lost revenues.”
The costs are significant. Huge, in fact. Tax expenditures now cost the federal government $1 trillion annually — more than Medicare and Medicaid combined. And they’re regressive.
There is also a pattern to these programs: The more a government social program benefits wealthier Americans, the less obtrusive it is. We design policies for the poor in ways that make it hard to escape the knowledge that the government is providing help. But richer Americans rely on programs that are “submerged.”
(Source: azspot, via sarahlee310)
› The Fight Against Capitalism | Nicole Demby
While #OWS still encompasses within it a multiplicity of tactics, opinions, and degrees of political radicalism, the evidence is all too clear that the soul of Occupy is anticapitalist, and the desire for a different system is a desire for a protest movement whose grasp on our lives is more holistic. There has already been inspiring work done to organize in different communities, and one can envision the emergence of a dispersed network not only of general assemblies but of communes and cooperatives as well.
The old pessimism of theory beats at our backs, telling us that any developed and sustained form of communal organization can only exist as an autonomous pocket whose threat to capitalism is nil. Yet sustaining autonomous, communal forms of care is not a shift away from direct, active forms of resistance. The positive and the negative aspects of the fight against capitalism must work in conjunction with one another to mutually reinforce each other. Communes, cooperatives and other structures of social support provide a material safety net that facilitates more radical action, enabling people to strike from work and from debt obligations with the assurance that their material needs will be met when they do. Moreover, such forms of organization can begin the incredibly difficult process of building trust between those with radically different backgrounds and experiences, providing support for whoever needs it, especially those who have borne the brunt of the economic collapse.
› Is Libertarianism Fundamentally about Competition? Or about Property?
Liberals should recall that fair competition is the driver, the engine of our cornucopia. The source of the wealth that made social progress possible. And libertarians need to pause, amid their dogmatic, “FDR-was-Satan” incantations, and recall that the word “fair” is the only thing that can make competition last.
Ironically, government can play a role there, if carefully watched. e.g. by ensuring that all poor kids get the care and education needed to become adult competitors! By ensuring that social status - whether poor or hyper-privileged - is never the prime determinant of success or failure. In other words, a sane libertarian who loves competition does not scream “Socialism!” at every state intervention. Instead, that grownup libertarian calmly judges every intervention by one standard. “Will this help to increase the number of skilled, vigorous competitors?”
And by that standard, suddenly, liberals and libertarians have something to discuss. Without a scintilla of doubt, measures for civil rights, sanitation and public health, infrastructure, childhood health care and… yes… the vast increases in literacy wrought by public education… vastly increased the number of citizens capable of independent engagement in markets and innovative goods and services.