When I tell people I work at a school of public policy, I can often see their eyes glaze over. Policy is so…boring.
Politics, on the other hand, is interesting.
Political horse-races are so much more exciting than the intricacies of the tax code. And let’s be honest: people can decide how to vote on the basis of a candidate’s skin color or his willingness to stick a probe up a pregnant woman’s vagina; they don’t have to know anything about that candidate’s stance on tax policy.
Today’s politics, especially, is all about distraction and the “shiny object.”
And while we are all engaged with that shiny object, American taxpayers are getting ripped off–and it’s all legal.
We’ve heard a lot lately about so-called inversions.
Companies striking deals to become technically foreign can be found in all corners of American business, from California computer-equipment manufacturer Applied Materials to Minnesota medical-device giant Medtronic to North Carolinabased banana behemoth Chiquita. Little is changing in the core business of these firms. They will just pay less in taxes – and to a foreign government, often Ireland or the Netherlands.
[I]nversions are just the tip of the iceberg. The crisis of corporate tax avoidance is far more pervasive – and destructive – than either Obama or Lew is letting on. At a moment when Congress appears impossibly divided, a strong, bipartisan consensus has, in fact, emerged in Washington: The world’s richest corporations will get away with fleecing hundreds of billions of tax dollars from the rest of us….
Last year the IRS finally collected more in tax receipts than it did before the crash in 2007. But dig a little deeper into the numbers and it is clear we haven’t returned to normal: Corporations paid nearly $100 billion less in federal income taxes last year than before the Great Recession….
The top names in American business – from Apple to Xerox – have joined in the greatest tax dodge in world history. Using clever accounting games, these corporations have siphoned majestic sums out of the country and into tax-haven shell companies – where the money is untouchable by the IRS.
The numbers are staggering. More than $2 trillion in U.S.-based multinational profits currently sit in offshore accounts, representing, by credible estimates, in excess of $500 billion in unpaid taxes. If that money were deposited in federal coffers tomorrow, it would wipe out the deficit for 2014. And every year that Congress dithers on a crackdown, America is forfeiting an approximate $90 billion in revenue.
The article details a variety of tax provisions–all legal, all part of the U.S. Tax Code–that privilege corporate America at the expense of individual taxpayers. The people who are outraged–outraged–by the use of tax dollars to provide poorer citizens with access to healthcare are curiously silent about the immense costs of this preferential treatment of corporations.
The silence of the elites, of course, is understandable. People who understand that our tax code is massively tilted toward America’s “haves” tend to be beneficiaries of those provisions. They are unlikely to complain.
Most of the silence, however, can be attributed to the average American’s deep-seated disdain for policy, our preference for easy issues, “shiny objects” and pop culture distractions from all those boring details.
I guess it’s just too much trouble to figure out who is picking our pockets, and how they’re doing it. And too much work to vote their lapdogs out of office.