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

[Matthew Williams]

So, anyway, do we want to feature this? I think it's got some good 
information, but I also think the way it's framed--the whole traitor, 
Benedict Arnold thing--is kind of silly, which makes me hesitate. -- 
Matt

On Jun 13, 2005, at 5:51 PM, Press Room at UFE wrote:

> Op-Ed Submission from United for a Fair Economy (617-423-2148 x119)
>
> America's Corporate Benedict Arnolds
>
> “That’s un-American” 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
> America’s most famous traitors, it’s time to consider whether some of
> America’s 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 wasn’t 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 executive’s 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 nation’s second largest defense contractor, is honored 
> with the
> “Taxes are the Real Enemy” Benedict Arnold award. Boeing received the
> largest federal tax refund in 2003. So large was Boeing’s $1.7 billion 
> tax
> refund that it dwarfed the company’s $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 “Taxpaying Dysfunction (TD)” award.
> Despite $14 billion in profits between 2001 and 2003, Pfizer couldn’t 
> 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, Pfizer’s 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 
> nation’s
> 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
> nation’s security.
>
> The American public, angered by Arnold’s 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 Arnold’s 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:
> “Corporate Traitors: The Decline of Corporate Taxation and Subsequent 
> Rise
> in CEO Pay.”  
> (http:///www.faireconomy.otg/press/2005/corporatetraitors.pdf)
> Scott Klinger may be emailed at sklinger at faireconomy.org.
>
>
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