Home Budget, Economy The “Grand Bargain” Scam: Part II

The “Grand Bargain” Scam: Part II

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Recently, the Campaign to Fix the Debt, to which Peter G. Peterson is a major donor, sent out an email (with a very revealing picture) to its major supporters. The picture showed a bevy of Wall Street CEOs standing in the NY Stock Exchange, ringing the bell to begin a day’s trading and surrounded by “Fix the Debt” signs. Although the Campaign’s supporters want to appear moderate, seeking to pair spending cuts with new revenue, they are not.

As shown by Americans for Tax Fairness, thirteen of about 80 CEOs and companies that signed a letter pressing Congress to “Fix the Debt” have drained tens of billions of dollars from the federal tax system and thus placed the main burden on other taxpayers. Six companies signing the letter advocate tax amnesty for corporate profits in offshore tax havens.

Six corporations whose CEOs are signatories of the letter to “Fix the Debt” are members of the WIN America Coalition, lobbying Congress to pass Senate bill 161, which would enable companies to reduce their tax rate on trillions of dollars in foreign profits “repatriated” to the U.S. That law would reduce the on-paper 35% corporate tax rate to 8.75% on repatriated dollars.  

According to Citizens for Tax Justice, five corporations whose CEOs signed the letter to “Fix the Debt” paid NO federal income taxes on $62 billion in total profits, but instead garnered $27 billion in tax subsidies over the last for years. (See also “Big No-Tax Corps Keep on Dodging,” Citizens for Tax Justice, 04/09/2012.)

And according to the Institute for Policy Studies, eight of the CEOs signing the letter gained a total of $11.8 million in tax breaks last year from the Bush tax cuts. (Those eight are among 57 CEOs who each gained more than $1 million in such tax favors, collectively receiving more than $100 million in tax breaks.)  

The Office of Management and Budget shows that corporate taxes have decreased from 22.2% of federal revenues in 1961 to a mere 7.9% in 2011. Even though the profits of American corporations have skyrocketed in recent years, their contributions to federal revenues have plunged by 60% in the last 50 years.

The letter to Congress from CEOs and other wealthy “elites” says in essence, as Felix Salmon of Reuters notes: “Please cut our taxes, raise taxes on everybody else, and cut benefits they get from Medicare, Medicaid, and Social Security, which we [the wealthy] individually don’t rely upon.” In other words, the letter and the Campaign to Fix the Debt constitute nothing more than self-interest masking as public concern.

[This diary is cross-posted by me on BlueNC.]