[Boston-editorial] Op-Ed Submission: America ¹ s Corporate Benedict Arnolds

[Pete Stidman]

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-Pete

--- Press Room at UFE <sklinger at responsiblewealth.org>
wrote:

> Op-Ed Submission from United for a Fair Economy
> (617-423-2148 x119)
> 
> America's Corporate Benedict Arnolds
> 
> ³That¹s un-American² is the cry heard whenever the
> unwritten code of
> American values is breached, Compassion, fairness
> and equal opportunity are
> hallmarks, and although you might not be able to
> recite chapter and verse of
> the code, you know when it is broken.
> 
> On this the 204th anniversary of the death of
> Benedict Arnold, one of
> America¹s most famous traitors, it¹s time to
> consider whether some of
> America¹s largest corporations that pay little or no
> federal taxes, have
> indeed become traitors.
> 
> Large corporations are in full retreat from paying
> their fair share of
> taxes. In 2003, corporations paid just 7% of the
> cost of the US government,
> according to a study by Citizens for Tax Justice.
> 
> It wasn¹t always this way. At the end of the Second
> World War, a time when
> paying taxes was viewed as a patriotic duty,
> corporations paid half the cost
> of the federal government. Even as recently as the
> 1970s, corporate taxes
> accounted for 20% of federal treasury receipts.
> 
> This dramatic change has shifted the cost of paying
> for government to
> smaller businesses and individual taxpayers, while
> at the same time boosting
> corporate profits and their executive¹s pay.
> 
> In 2003, ten companies each reported more than $1
> billion in profits to
> their shareholders, yet paid no federal corporate
> income tax. Collectively,
> these firms that have claimed the only way they can
> remain competitive is
> through tax breaks, earned $30 billion in profits
> and paid their CEOs $126
> million in 2003.  The average pay of the CEOs of the
> corporate Benedict
> Arnolds was $12.6 million, 51% higher than the pay
> of the average
> large-company CEO as reported by Business Week.
> 
> Who are these resurrected Benedict Arnolds? A new
> report published by United
> for a Fair Economy entitled Corporate Traitors: The
> Decline of Corporate
> Taxes and the Subsequent Rise of CEO Pay
>
(http://www.faireconomy.org/press/2005/corporatetraitors.pdf)
> bestows awards
> on some of these tax avoiders.
> 
> Boeing, the nation¹s second largest defense
> contractor, is honored with the
> ³Taxes are the Real Enemy² Benedict Arnold award.
> Boeing received the
> largest federal tax refund in 2003. So large was
> Boeing¹s $1.7 billion tax
> refund that it dwarfed the company¹s $1 billion in
> reported earnings, giving
> the company an effective tax rate of -159% according
> to Citizens for Tax
> Justice. 
> 
> Viagra maker Pfizer took home the ³Taxpaying
> Dysfunction (TD)² award.
> Despite $14 billion in profits between 2001 and
> 2003, Pfizer couldn¹t get
> excited enough about paying taxes to perform ­
> sending just $1.2 billion to
> the federal treasury, a miserly effective tax rate
> of just 8.2%. In
> contrast, Pfizer¹s industry competitor Merck paid
> 32.5% of its $12.7 billion
> in three-year profits in federal taxes.
> 
> Pfizer saw no need to be Scrooge-like when it came
> to paying its CEO Hank
> McKinnell, however, who walked away with $21.4
> million in 2004, more than
> three times what Merck paid its CEO.
> 
> These disparities in tax rates adversely affect the
> competitive playing
> field not only between giant companies like Pfizer
> and Merck, but to an even
> greater degree between large companies and small
> businesses. While the
> average large company today pays only 18% of its
> income in federal taxes,
> many small businesses owners pay 34%.
> 
> Two centuries after Benedict Arnold used his power
> and influence to gain a
> plum assignment as commander of West Point, and then
> used that position to
> surrender this important fort to the British, we are
> witness to other
> powerful players using their privilege and standing
> to rewrite the nation¹s
> tax laws for their own gain.
> 
> Corporate tax and accounting departments have
> morphed from backwater cost
> centers to sexy profit drivers. Investments in
> research and development have
> shrunk as investments in aggressive lobbying and
> accounting have blossomed.
> These corporate Benedict Arnolds, like their
> namesakes, are jeopardizing the
> nation¹s security. 
> 
> The American public, angered by Arnold¹s betrayal,
> went on to fight and
> reclaim West Point from the British. Today the fight
> is about restoring the
> fairness of the tax system by assuring that
> corporations pay their fair
> share to maintain the society upon which their vast
> wealth depends.
> 
> The fight has many fronts
> -Congress should reform and simplify the corporate
> tax code, lowering the
> rate, eliminating the myriad of tax breaks and
> implementing progressive tax
> principles that would tax Big Business at higher
> rates than small family
> businesses, reversing the current reality.
> -The corporate alternative minimum tax, eviscerated
> by the Clinton
> Administration, needs to be restored, so that all
> profitable companies pay
> taxes. 
> -We need to withdraw from tax treaties with many of
> the 90 tax haven nations
> who aid and abet corporate tax avoiders.
> 
> Those who continue down Benedict Arnold¹s path
> might, like the infamous
> traitor, consider taking themselves to another
> country. Their current
> behavior is un-American and unacceptable.
> 
> Scott Klinger is the corporate accountability
> coordinator at United for a
> Fair Economy (http://www.faireconomy.org) and author
> of the report:
> ³Corporate Traitors: The Decline of Corporate
> Taxation and Subsequent Rise
> in CEO Pay.² 
>
(http:///www.faireconomy.otg/press/2005/corporatetraitors.pdf)
> Scott Klinger may be emailed at
> sklinger at faireconomy.org. 
> 
> 
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