WASHINGTON – Sophisticates speaking for the real power here have already blown off President Obama’s 2015 budget. The group includes almost the entire Congress and sadly, the corps of journalists, some who are world weary, but include all who accept the perpetual rule of monied interests.
Obama’s budget, however, offers a muscular, progressive blueprint that puts real meat on the president’s spoken interest in narrowing the income gap, making the rich pay a greater share of taxes, raising up kids trapped in our urban ghettos and ending the country’s permanent war footing.
Contrasted with the House Republican tax plan, the president’s budget gives Democrats some powerful kitchen table finance issues to campaign on, if only the president and the Democrats would embrace them and talk about them.
The GOP tax menu would hit hard at taxpayers from New York to Virginia to California by eliminating deductions of local and state taxes from federal tax payments. At the same time, the Republicans would continue protections for huge global firms like Corning, Boeing, General Electric, Verizon and Priceline, who paid no corporate income taxes while raking in billions in profits from 2008 to 2012, according to the independent research group Citizens for Tax Justice.
The current corporate rate is 35 percent. The Republicans want to reduce it to 25 percent. CTJ and its sister organization, Institute on Taxation and Economic Policy, say U.S. corporations now pay higher effective taxes overseas than they do here.
Of the 288 corporations CTJ studied, 111 of them paid zero taxes in at least one year during which they made money. Among them were Buffalo’s cable TV provider, Time-Warner Cable, and Mattel, Yahoo, Facebook and the broadcaster conglomerate CBS. Time-Warner reported profits of more than $2 billion in the year it paid no federal corporate tax. IBM received tax subsidies from the federal government of $13.2 billion over a period of five years, CTJ said.
The CTJ report did not look at how New York State treated these companies.
The tax avoidance is all perfectly legal. Corporations spend millions on lawyers who help them wiggle through the loopholes that both parties in Congress carved, and more millions to create these loopholes, and more millions still to send money back to our elected representatives in the form of campaign contributions.
Meanwhile, Democrats would have to demand from Obama and Attorney General Eric Holder stern, prompt action to make the Swiss banking giant Credit Suisse cough up details on its estimated 22,000 American customers who have used the bank to hide $12 billion in assets to avoid paying U.S. taxes.
It would seem a no-brainer for Democrats to vigorously assail the GOP for trying to lower taxes for globalists while looking to cut deductions for average Americans. But then they would have to buy into the Obama budget, which includes an enhanced Buffett Rule, named for the billionaire investor, Warren E. Buffett, who is chairman of The Buffalo News. The rule would require those making more than $1 million a year to pay at least 30 percent in taxes after deducting for charity. But the new chairman of the Senate Finance Committee, Ron Wyden, Ore., did not list this, or raising the state tax, among his imperatives.
It’s good that Obama has dispatched a dozen F-16s to Poland amid the Russia-Ukraine crisis. The president would stand even taller today if he had not caved in to Russian pressure in 2009 when he canceled the missile defense shield facilities that were being created for Poland and the Czech Republic under orders from President George W. Bush.