Breaking Through Power by Ralph Nader

Author:Ralph Nader
Language: eng
Format: epub
Publisher: City Lights Publishers

The strategic planning by global corporations to escape the laws and standards of the nation state has been accelerating over the decades. In the 1940s and 1950s, authors wrote about the “Seven Sisters”—the seven largest oil companies and how they created their own global regime. In 1972 Carl A. Gerstacker, chairman of Dow Chemical Company, revealed this yearning by his big-business colleagues. He declared that an “anational corporation,” without any national ties, could operate more flexibly and freely around the world. Later he told an inquirer that for a decade, Dow had been studying the possibility of relocating to an island in the Caribbean. The chief obstacle, he added, would be unfavorable tax consequences to investors in the exchange of stock involved in such a corporate emigration.28

Escaping the nation state, especially the larger, more formidable states, has been the goal of corporate attorneys for many years. That is what “tax havens” are all about in such accommodating jurisdictions as the Cayman Islands, Ireland, Luxemburg, Bermuda, Switzerland, and Britian’s Isle of Man. Tax attorneys have recently conceived of something called “an inversion.” This is where a functioning corporation chartered in the United States, like Pfizer, sheds its U.S. citizenship, then acquires and melts into another company chartered, for example, in Ireland or Luxemburg, where tax rates cost the company less. The former U.S. company still maintains its full presence in the United States with its workers, sales, and other operations. But by shuffling papers, the attorneys can get the best of both worlds for the massive corporations that hire them: public services paid for by us, the taxpayers, while contributing fewer tax payments in return. Even the wealthiest One Percenters, with a few exceptions, would think twice about renouncing their U.S. citizenship for a tax deal, but few of them see the hypocrisy of complaining about our government’s deficits.

When it comes to taxes, it’s truly startling how the freeloading executives of U.S. corporations, so lavishly nurtured for so many years by so many of America’s governmental institutions, are unrestrained by any sense of national loyalty or patriotism when they engage in such tax-avoiding flights. Their arrangement allows them to have it both ways: the advantages of our country without the responsibility of contributing to the country’s upkeep and security. Most regular taxpayers generally have heard about these “tax loopholes” for the rich. The common reaction is for people to push to get their tax burden reduced rather than to go after the variety of gigantic tax reductions that lawyers and lobbyists win for their corporate clients. On December 20, 2015, The New York Times reported that it took eleven days for lobbyists hired by billionaire One Percenters, along with allies from the hotel, restaurant, and gambling industries, to successfully add 54 words to a tax and spending bill that would deprive the U.S. Treasury of $1 billion in future federal tax payments.29

Since World War II, the percentage of the overall national revenue garnered through the taxation of corporations has been dropping. In 1950, federal corporate tax collections amounted to about thirty percent of all federal revenues.

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