How the Ultra-Rich Betray America

The ultra-rich betray America and it comes in many forms. Here are a
few of the more outrageous, and destructive, examples:

Evasion: Corporations Suddenly Stopped Meeting Their Tax
Responsibilities  - While corporate profits have doubled to $1.9
trillion in less than ten years, the corporate income tax rate, which
for thirty years hovered around the 20-25% level, suddenly dropped to
10% after the recession. It has remained there for three years. We are
seeing a manifestation of the Shock Doctrine. Corporations are using
the national emergency of the financial collapse to make a statement
about taxes, and a traumatized nation is too preoccupied to do
anything about it.

Delusion: Technology Companies Won't Admit That Much of Their
"Innovation" Is Due to Public Assistance  -- According to the report
Funding a Revolution, government provided almost half of basic
research funds into the 1980s. Federal funding still accounted for
half of research in the communications industry as late as 1990. Even
today, the federal government supports about 60 percent of the
research performed at universities. Apple's first computer was
introduced in the late 1970s. Apple still does most of its product and
research development in the United States, with US-educated engineers
and computer scientists.

Google's business is based on the Internet, which started as the
Defense Department's Advanced Research Projects Agency (ARPANET), a
computer network from the 1960s. The National Science Foundation
funded the Digital Library Initiative research at Stanford University
that was adopted as the Google model. Apple got its tax bill down to
9.8% last year. About 2/3 of its profits remain overseas for tax
avoidance purposes. Google, like Apple, avoids taxes by moving most of
its foreign profits through Ireland and the Netherlands to Bermuda.
Both Apple and Google, along with Microsoft and Cisco, are lobbying
for a repatriation tax holiday to allow billions of overseas dollars
to come home at a greatly reduced tax rate. An Apple executive said:
"We don't have an obligation to solve America's problems." That may be
true, but they do have an obligation to pay the taxes that help
America solve its problems.

Desertion: The People Who Benefit Most from Government Are Renouncing
Their Citizenships to Avoid Taxes  - Perhaps the ultimate insult to
America is to just quit on your country after making a fortune off of
it. In 2011 almost 1,800 Americans gave up their citizenship to avoid
taxes. The wealthy benefit disproportionately from property and
inheritance laws, contracts, stock exchanges, favorable SEC
regulations, the Small Business Administration, patent and copyright
and intellectual property laws, estate planning, trust funds, Internet
marketing, communications infrastructure, highway maintenance, air
traffic control, local and national security, and 60 years of research
in technology and other industries. A recent outrageous example is
Facebook part-owner Eduardo Saverin, whose family came to America from
Brazil partly for safety reasons, and who happened to land Mark
Zuckerberg as a roommate at Harvard. Now after falling into billions,
he's decided to renounce his U.S. citizenship to avoid taxes.

Denial: Traders Feel It's Inappropriate to Pay Even a Tiny Tax on a
Quadrillion Dollars in Sales  - A quadrillion dollars sounds like a
fake amount. But it's all too real. That's a thousand trillion dollars
of derivatives transactions which, along with the high-frequency
computer-generated transactions (5,000 per second) that make up over
half of U.S. stock trades, contributed to a financial meltdown and a
$3 trillion bailout for reckless trading. But there's no tax on these
transactions. While average Americans pay a 10% sales tax on
necessities, millionaire investors pay just a .00002% SEC fee (2 cents
for every thousand dollars) for a financial instrument. And their
supporters claim, inexplicably after the disastrous trading frenzy in
2008, that a tax would increase volatility.

Illusion: The Media Leads Us to Believe We Should All Be Cheering When
the Stock Market Is Booming  - Conservatives insultingly assure us
that the "democratization of stock ownership" is gradually making
America more equal, as evidenced by the flattening of wealth ownership
among the richest 1% in recent years. So we should all be excited
about a rising stock market. Here are the facts. Data from Edward
Wolff confirms that from 1983 to 2007 the percentages of net worth and
financial wealth for the top 1% remained steady. But the percentages
for the rest of the richest 5% increased by almost 20%, while the
percentages for the lowest 80% of the population DECREASED by almost
20%. In other words, the share of wealth owned by the top 1% leveled
off because the "democratization of stock ownership" spread the wealth
among just 5% of the population, those earning an average of $500,000
per year. A few people - 5 out of 100 - got very rich, but everyone
else lost ground.

Conclusion  - The issues are difficult to address with Congress
largely on the side of the wealthy. At the very least:
(1) Eliminate the tax break on unearned income (capital gains). The
richest Americans, who own most of the stocks, should not pay a
smaller tax than everyone else.
(2) Implement a small financial transactions tax. It would be easy to
administer on computer trades, it would generate hundreds of billions
of dollars in revenue, and it would help guard against the reckless
speculation that devastated the financial markets and our country.
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