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BIG BANK ASSETS AND GDP – DO WELFARE RECIPIENTS WRITE OUR TAX LAWS?

June 28, 2013

BIG BANK ASSETS AND GDP – DO WELFARE RECIPIENTS WRITE OUR TAX LAWS?

We now know that big Wall Street banks have corralled financial assets at an astounding and alarming rate of increase, from 18% of GDP in 1995 to 63% of GDP today, and climbing. Such numbers are especially significant when you consider that the base in 1995 was smaller than the base today on which such increases were computed – and only some of such increase can be attributed to inflation. Some of such rate of increase can be explained by lower effective tax rates financial and other corporations pay to our treasury along with loopholes galore, delay in repatriating profits from overseas operations until advantageous in tax terms, claims that income was had from overseas operations in tax-free venues when it was only a paper pretense and when no actual production of goods and services occurred in such venues, or, if so, at a much more reduced rate than the rate claimed (see especially Ireland) etc. The list of games played en route to the bottom line of corporate America is only limited by the imagination of its accountants, enforced by its tax lawyers, and kept well-oiled by its lobbyists whose role is to spread propaganda and campaign contributions among the political establishment (with the unbelievable result that the Internal Revenue Code is amended on average of ONCE A DAY)! (Parenthetically, I am of the view that any statute that needs daily amendment must be seriously deficient and in great need of a total redo so that order can come out of the chaos of daily change.)

There are obvious advantages to effectively writing your own tax code, as corporate America does. For instance, GE, one of our big defense contractors and a major corporation on the civilian side of production as well, reported hundreds of millions of dollars in profits in 2010 and not only did not pay any income taxes at all on such profits – rather GE got a THREE BILLION DOLLAR refund from our treasury for its 2010 taxable year. Guess who pays or is liable to pay the three billion GE did not pay? Look in the mirror while considering just what new and different forms corporate welfare can take.

It is bad enough that corporate America writes its own tax code; what’s worse is that it writes ours, too. After all, there is a budget we have to meet (or add to the deficit). What the corporations do not pay with their serial chicanery we have to pay – their gain is necessarily our loss – someone has to pay if we are to meet our budgetary needs, otherwise we continue deficit financing that leads to increased long term debt. We are not talking pennies here. Corporate welfare in one way or another is costing our treasury perhaps hundreds of billions of dollars a year, billions that you and I have to make up in the scheme of things as now constituted. We desperately need a complete revision and/or rewrite of the Internal Revenue Code (along with safeguards on serial amendment) if we are to survive this fiscal funk.

Big Wall Street banks are the worst of the corporate culture because they are almost impossible to regulate due to their size and headed, as they are, toward 100% of GDP, or total corporate control of America. We now have a bill before the Senate to break up these big banks so that they can be subject to regulation and so that collusion among their number will be difficult and competition from other banks can be assured. The bill is sponsored by both Democrats and Republicans and should be passed and implemented without delay. Teddy Roosevelt, a Republican, is widely and correctly credited with breaking up the robber baron trusts of his era. He was and is properly admired as a “trust buster.” America is at a similar impasse once again; one need only substitute “Wall Street big banks” for “John D.Rockefeller.” We need a “big bank break upper” and this bill will do the job. LET’S PASS IT. GERALD E

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