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- Rekha Basu
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Former Congressman Berkley Bedell concluded his well-aimed commentary in this newspaper last week by urging Americans to take to the streets as Egyptians have done, to free our government from the clutches of large corporations. On Monday, some spirited Des Moines activists braved the chill winds to do that.
To the honks of approving motorists, speakers from the Women's International League for Peace and Freedom stepped onto a homemade soapbox outside Bank of America downtown and exhorted: "Pay your taxes! We do!"
The bank, which received a federal government bailout of nearly $1 trillion, last year made $4.4 billion in profits. But for the second year straight, it paid no U.S. taxes and claimed a tax benefit of nearly $1 billion.
How does it get away with that legally? By reaping profits from overseas operations in places like the Cayman Islands, which have no corporate income tax. The bank has 371 foreign subsidiaries in tax shelters. Within the United States, however, it claimed a loss of $5.4 billion.
It's not alone. Something has gone terribly wrong when corporations that should be the biggest taxpayers can make billions but avoid returning anything. Yet somehow, this misbegotten windfall doesn't seem to outrage Americans as much as pay raises for union members.
Monday's rally by several dozen people, mostly of retirement age, was a refreshing change from the more common kind these days, where protesters trash-talk taxes and decry government spending. Even low-wage-earners have jumped on the bandwagon, though it would better serve their interests to have companies pay their fair share so governments could properly fund schools, libraries and other services intended to prepare their children for upward mobility. Maybe some of them have grown up expecting politicians to be enmeshed with corporations. Thanks to a U.S. Supreme Court ruling last year, corporations can spend unlimited sums to support political candidates. In return, they expect looser regulations on business and tighter ones on labor.
"I lived during the middle of the 1900s when our top income tax rate varied between 70 and 91 percent - more than double that of today," wrote Bedell, 90, who founded a highly successful fishing tackle manufacturing company. "I saw what we can do when we properly tax ourselves to build a better nation."
Today corporate income is supposed to be taxed at 35 percent, though loopholes like foreign subsidiaries - reportedly used by 83 of the top 100 U.S. companies - prevent even that. And 1 percent of households take in nearly a quarter of income.
Yet we have presidential hopefuls streaming into town yammering about the need to lower taxes and cut spending. When asked on camera about Bank of America paying no U.S. taxes, former Minnesota Gov. Tim Pawlenty said corporate tax rates are too high - then touted his record of cutting spending, reforming public employee pensions and instituting performance pay for teachers.
In Iowa, corporations that paid no taxes have gotten $30 million in Research Activity Credits from state government since 1985, said Jan Corderman, former president of AFSCME Iowa Council 61, though there's no evidence they're doing what they're supposed to do. She said under 8 percent goes to firms of less than 100 employees.
As public services are cut, corporations are rewarded with tax breaks. Some Americans have gotten too greedy. Others have just gotten complacent. So yes, let's borrow a cue from Middle East protesters and demand a democracy that works for people at least as much as it works for big businesses.
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