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from
http://www.guerrillanews.com/newswire/214.html
MUST READ: Rich Returns
Institute on Taxation & Economic Policy, Citizens for
Tax Justice, Public Campaign
2001-11-09 00:30:38
Last month, while America was busy recovering from the
9-11 terrorist attacks and worrying itself sick about
the possibility of more, the House quietly passed a
so-called "economic stimulus" package. The bill, if
passed by the Senate, amounts, as Michael Moore
eloquently put it on "Politically Incorrect" tonight,
to nothing short of treason: While the federal budget
runs deep into the red, and Americans are increasingly
asked to make "sacrifices" for the war effort, big
corporations (and big political donors) like Disney,
GE and General Motors will receive hand-outs totaling
in the billions - in the form of tax breaks and even
rebates. In other words, money the treasury has
already spent.
But, "Hey," you ask. "Isn't that money going to be
invested back into the economy?"
Here's a hint:
Michael D. Eisner, Chairman CEO, Disney: Total
compensation (2000): $61,005,644. Stock options
exercises from prior grants: $60,531,000. Unexercised
stock options from previous years: $266,765,100.
John F. Welch Jr., Chairman CEO, General Electric:
Total compensation (2000): $231,149,232. Stock option
exercises from prior grants: $57,112,560. Unexercised
stock options from previous years: $341,518,062.
G.R. Wagoner Jr., CEO President, General Motors: Total
compensation (2000): $21,685,557. Unexercised stock
options from previous years: $5,153,233.
The following is the Executive Summary of a joint
report released on Nov. 8 2001 by the Institute on
Taxation & Economic Policy, Citizens for Tax Justice,
and Public Campaign. It is the best analysis of this
insidious bill I have seen:
In the aftermath of the horrific terrorist attacks on
the World Trade Center and the Pentagon on September
11, 2001, the President and congressional leaders
quickly agreed on the outlines of a $50-75 billion,
one-year economic stimulus plan to help those most
hurt by the disaster and the economic downturn. After
a flurry of corporate lobbying, however, that
bipartisan agreement is in shambles.
On a close party-line vote, the House passed a $212
billion tax-cut bill stuffed with tax breaks for
profitable corporate campaign contributors, including
repeal of the corporate alternative minimum tax and
huge increases in tax write-offs for "depreciation."
Senate Republicans have endorsed a similar measure, as
has President Bush. Meanwhile, special interests
continue to plead for even more tax breaks, from
reinstating the three-martini lunch by making business
meals 100 percent tax-deductible to granting special
treatment for theme parks.
Although the war on terrorism is new, lobbying for
corporate tax breaks is not. This study examines
campaign contribution records of top tax avoiding
companies -- 41 corporations that enjoyed more than
$55 billion in tax breaks between 1996 and 1998,
including 23 companies that received tax rebates in
1998. This short list of profitable tax-avoiders --
essentially, the companies that are the best at
working the system to avoid paying taxes -- includes
many household names, companies such as General
Electric, Microsoft, and Walt Disney.
This study also includes five case studies showing how
these individual companies and sometimes whole
industries have used campaign contributions to help
establish, widen, and protect particular tax
loopholes. Most Americans may not commonly know these
tax loopholes -- no ordinary taxpayer can claim tax
credits for exports, or for manufacturing goods in
Puerto Rico. Case studies include in-depth looks at
lobbying by exporters for the Foreign Sales
Corporations tax break, Microsoft�s campaign to extend
the break to software companies, and computer and
pharmaceutical companies� lobbying to extend tax
credits permanently for research.
The picture that emerges is of a profitable corporate
America using campaign contributions cynically, to
ensure that they pay far less than their fair share in
taxes. At a time when all of America is being asked to
sacrifice, corporate executives have their hands out,
filled with campaign contribution cash as they ask for
special breaks and to pay less in taxes.
Major findings of the study include:
Sixteen profitable corporations, which will receive
$7.4 billion in immediate alternative minimum tax
rebates if the "stimulus" bill passed by the House
becomes law, are the source of $45.7 million in
campaign contributions to federal campaigns since
1991, including more than half a million dollars to
President George W. Bush�s campaign.
The short list of top tax avoiders -- 41 large
profitable companies that got $55.2 billion in tax
breaks between 1996 and 1998, including 23 companies
that got tax rebates in 1998 -- contributed more than
$150 million to federal candidates and parties between
1991 and 2002. The majority of this cash -- 56 percent
-- was given in the form of "hard money" contributions
-- contributions from PACs associated with the
companies and from business executives and their
families subject to federal limits but "bundled" in
large amounts from these companies. Forty-four percent
was contributed as soft money, unlimited contributions
to political parties.
After the GOP took over Congress in 1994 -- and
control of writing tax laws -- top tax-avoiding
companies sharply increased their contributions to
Republican candidates and parties. In the 1992 and
1994 election cycles, the GOP received 54 percent of
their contributions, and the Democrats, 45 percent. By
the 2000 election cycle, Republican politicians and
party committees got more than twice as much campaign
cash as Democrats did. Thus, campaign cash followed
the power to make laws the companies wanted -- not any
ideological preference or principle.
Members of the Congressional tax-writing committees --
the House Ways and Means and Senate Finance Committees
-- collected $9.7 million from 1991 through June 2001
from executives, their families, and PACs associated
with top tax-avoiding corporations. These lawmakers
were all crucial targets for maintaining, expanding,
and securing new tax breaks for the companies studied.
The top recipients of these contributions among
current Senate Finance Committee Members were Sen.
Orrin Hatch (R-UT), who received $355,430, and Sen.
John B. Breaux (D-LA), who received $251,150. On the
House Ways & Means Committee, the top recipients were
Rep. Charles B. Rangel (D-NY), the ranking minority
member, who received $308,600, Rep. Nancy L. Johnson
(R-CT), who received $244,200, and Rep. Bill Thomas
(R-CA), chairman of the committee, who received
$233,000.
The "Big Five" accounting firms, which beefed up their
tax lobbying practices in the late 1990s, building a
reputation for securing tax loopholes for corporate
clients from Congress and the Treasury Department, are
also major campaign contributors to federal candidates
and political parties. Together, Ernst & Young,
Pricewaterhouse-Coopers, Deloitte & Touche, Andersen
Worldwide, and KPMG Peat Marwick, gave $29 million to
federal candidates and party committees from 1989
through June 2001. These firms have hired former aides
from Congressional tax-writing committees and the
Treasury Department whose close ties and political
fundraising finesse help them get what their corporate
clients want. For example, Pricewaterhouse-Coopers
hired Kenneth Kies, a former chief of staff of the
Joint Committee on Taxation, and a significant
campaign donor, at a reported $1 million salary. On
Kies� current "to do" list -- lobbying for repeal of
the corporate alternative minimum tax (AMT) for his
clients, General Motors and IBM.
Executive compensation totals provided by AFL-CIO
Executive PayWatch.
This article originally appeared in TomPaine.com
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