Andrew Leonard has a piece over at Salon describing some jaw-dropping information about Verizon from a new report issued by the nonpartisan Center for Tax Justice:
In 2010, Verizon reported an annual profit of nearly $12 billion. The statutory federal corporate income tax rate is 35 percent, so theoretically, Verizon should have owed the IRS around $4.2 billlion. Instead, according to figures compiled by the Center for Tax Justice, the company actually boasted a negative tax liability of $703 million.
(Leonard’s column is worth the read, as is the whole report. But have a stiff drink handy.)
Verizon probably uses dozens of tax evasion techniques, such as carried-interest pay, offshore subsidiary shell games — hell, probably the corporate jet loophole. But there is a larger context here. Aside from the absurd profits, what has Verizon’s year looked like?
Remember, just last August, 45,000 members of the Communication Workers of America, the union servicing Verizon’s massive cable installation business, went on strike. Verizon gutted their contracts to the tune of $20,000 per worker. Verizon wouldn’t even sit down to negotiate with the union until they broke the strike.
Paging Scott Walker.
In other words, while making $12 billion in profit, while dodging $4 billion in taxes, Verizon executives tried to squeeze $1 billion from their workers by lowering pay, freezing pensions, and reducing healthcare benefits. It appears that Verizon has an austerity program of its own.
Verizon is just one example of a multinational corporation living off of welfare. Still, many on the right and in the news-o-tainment business say that we can’t raise — or even collect — corporate taxes because it would burden the illusive “job creators.” Tell me, if Verizon cared about jobs, why isn’t it using the 703 million negative tax burden, a gift from Mr. & Mrs. Taxpayer, to honor at least a portion of its workers’ contracts?
After all, these workers are some of the last holdouts of the American middle class.
As reported on NPR this morning and here in the Wall Street Journal, the occupation of Zuccotti Park requires spending money on police overtime pay.
The police presence is constant, and comes with a price tag. The New York Police Department already has spent $1.9 million, mostly in overtime pay, to patrol the area near Zuccotti Park, where hundreds of protesters have camped out for several weeks. Though cold weather is on the way, they’re prepared to stay put for the long haul.
The expense comes at a time when Mayor Michael Bloomberg has ordered citywide budget cuts…
Last week, Bloomberg ordered all agencies to prepare to cut expenses by a total of $2 billion during the next 18 months. Police Commissioner Raymond Kelly said the budget cuts may cause the cancellation of a new class of police officers entering the academy in January.
This is a prevailing criticism of the movement. The implication here is that the city can not afford the protests. There are several things to keep when you hear thiscriticism used.
First, there is no price ceiling on U.S. citizens’ First Amendment rights of free assembly and free speech. If there were, Bloomberg — or any government — could unconstitutionally deny these rights by purposefully inflating the cost of the police effort.
Second, $1.9 million is not a significant dent in the NYPD’s $46.5 billion budget.
Third, police are likely clamoring for this overtime pay because Wall Street robbed their pension fund. In May of last year, the New York Comptroller announced, “[t]he New York State Common Retirement Fund and the five New York City public pension funds have announced today a proposed settlement of the Countrywide Financial Corporation Securities Class Action for $624 million.”
Remember, Bank of American bought Countrywide so it could more easily securitize subprime loans and fraudulently convery them to its victims, such as the New York City Police Pension Fund (part of the common fund). The $624 million award was a settlement, so it is safe to assume the real damages flowing from the fraud was higher.
Fourth, there would be no budgetary issues if we had an enforced progressive tax system. One trick the wealthy deadbeats use is to hide income in offshore tax heavens. This cheat alone cost New York $8.4 billion in 2008.
Hiding income abroad is only one of hundreds of tricks the super-wealthy use to evade taxes.
Fifth, tax revenue, and therefore budgets, suffer during high unemployment. Wall Street tanked the world economy in its lawless orgy of financial derivative greed. The resulting Great Rrecession has done considerable damage to New York’s budget. To be sure, this year Bloomberg announced a $400 million NYPD budget deficit. Had Wall Street been properly regulated then NYC’s budget would not be aching for tax revenue.
Sixth, when the NYPD uses unlawful methods to suppress protests they expose the city to high-dollar civil liability. Such is the case of the recent mass arrest on the Brooklyn Bridge: “Attorneys from the Partnership for Civil Justice Fund (PCJF) on Oct. 4 filed a class action lawsuit against Mayor Bloomberg, Police Commissioner Kelly and the City of New York, charging mass violations of constitutional rights in the trap and detain mass arrest of 700 demonstrators on the Brooklyn Bridge this past Saturday, October 1, 2011.” It is silly to decry $1.9 million on a lawful protest when, last year, the city paid $135 million to settle aggressive NYPD tactics.
While it is true that protests costs New York City in police overtime, it pales in comparison to the burden caused by Wall Street’s lawlessness. After considering all the numbers, $1.9 million for a social movement that could end Wall Street’s budgetary arson seems like a smart return-on-investment.
Trolling around on Forbes.com, I came across a head-turner from none other than Mr. Forbes himself. In describing why a recent Wall Street Journal report on the value of credit default swaps is not accurate, the PR Chief of the Ruling Elite makes a surprising call for increased government regulation:
“One of our columnists, noted economist David Malpass, has long warned of economic harm from the CDS market. This is where regulatory-mandated transparency in the actual volume behind CDS prices would do a world of good.”
Presently, the financial products that crippled the world economy are traded behind closed doors. Only a court order can compel the details of the transactions.
Of course we should blow the door open on the shadow markets of CDS, CDO and all other financial “weapons of mass destruction.” Lack of transparency in the synthetic derivatives markets is one of the reasons the 2008 crash blindsided so many people. Who knew these banks were leveraged to their eyeballs on this toxic waste? Who knew the derivatives markets had ballooned to over a quadrillion dollars?
Shining light on these shady casinos is not a novel idea. It’s a no-brainier. Democratic lawmakers have attempted to do so — having their amendments jettisoned by other lawmakers compromised by campaign donations.
The interesting thing here is that Forbes, the ostensible cheerleader for financial domination on our economy, wants to shine this light. It flies in the face of neoliberal orthodoxy; regulation is bad in any and all circumstances. It is inefficient, or stifles risk taking, or John Galt, or something.
Unlike Forbes, we, the 99% struggling in debt peonage, are not permitted to challenge the financial industry’s status quo. Our role in this equation is to shut up and work longer for lower pay. Austerity is what we deserve. Million-dollar bonuses is what Wall Street deserves.
Even if it is so obviously a good idea, only someone of Forbes’ clout, or the pro-plutocracy Financial Times, can call for government regulation without being slandered as a neo-Marxist class warrior. This monopolization of good ideas is why it is a such a huge story when someone like Warren Buffet makes the simple observation that he should not pay lower taxes than his secretary.
There is a lesson here of the inherent value of the Occupy Wall Street movement. The victims of our massively unjust financial oligarchy are appropriateing and redefining the boundaries of the mainstream political narrative.
Corporate news outlets oscillate between sneering condescension and simply ignoring the protesters. The boundaries of their narrative are narrowed in service of their role propagandizing corporate hegemony. At the risk of losing advertising revenue, CNN, for example, must exclude the breadth of ideas found on that square — or highlight the batty ones.
Slovenian philosopher Slavoj Zizek, speaking to the occupiers on October 9th, identified this benefit of the movement this way:
“There is a danger. Don’t fall in love with yourselves. We have a nice time here. But remember: carnivals come cheap. What matters is the day after. When we will have to return to normal life. Will there be any changes then. I don’t want you to remember these days, you know, like – oh, we were young, it was beautiful. Remember that our basic message is: We are allowed to think about alternatives. The rule is broken. ”
One potential result of the ever-growing protest is that Wall Street regulation will no longer be anathema to the political process. That would be a monumental victory. And, Eric Cantor would have a sad, which would be a nice consolation prize.