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Paul Buchheit
NationofChange / Op-Ed
Published: Monday 8 April 2013
As a final disdainful act, many multinational corporations have tried to convince us that they LOSE money in the U.S. while only making profits overseas.

The Corporate Betrayal of America

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Multinational corporations have built their businesses on the backs of American taxpayers. They've depended on government research, national defense, the legal and educational systems and our infrastructure.

Yet they've turned around and mocked us with declining tax payments. They've cut workers. They've refused to invest their massive profits in job-producing research and development. And they've insulted existing employees with low wages and dwindling retirement support.

As a final disdainful act, many of them have tried to convince us that they LOSE money in the U.S. while only making profits overseas.

Here are the facts.

Business Built on Our Backs

(a) Research

The most essential aspect of business growth is the long-term basic research that is largely conducted with government money. Starting in the 1950s, taxpayer-funded research at the Defense Advanced Research Projects Agency (the Internet), the National Institute of Health (pharmaceuticals), and the National Science Foundation (the Digital Library Initiative) has laid a half-century foundation for corporate product development. Even today 60 percent of university research is government-supported.

The tech industry is a special case, with many computer and communications companies coming of age in the 1990s, when industry funding for computer research declined dramatically and government research funding continued to climb. As of 2009, universities were still receiving ten times more science and engineering funding from government than from industry.

(b) Infrastructure

Thanks to the taxpayer-funded National Highway System, corporations have acquired access to markets across the country for over 60 years. Along with road construction came the water, electric, and telephone facilities needed to sustain their businesses.

Today, the publicly supported communications infrastructure allows the richest 10 percent of Americans to readily manipulate their 80 percent share of the stock market. CEOs rely on roads and seaports and airports to ship their products, the FAA and TSA and Coast Guard and Department of Transportation to safeguard them, a nationwide energy grid to power their factories, and communications towers and satellites to conduct online business. Private jets use 16 percent of air traffic control resources while paying only 3 percent of the bill.

(c) Law

A litany of advantages accrues to the business world through the legal system. The wealthiest Americans are the main beneficiaries of tax laws, property rights, zoning rules, patent and copyright provisions, trade pacts, antitrust legislation, and contract regulations. Their companies benefit, despite their publicly voiced objections to regulatory agencies, from SBA and SEC guidelines that generally favor business, and from FDA and USDA quality control measures that minimize consumer complaints and product recalls.

The growing numbers of financial industry executives have profited from 30 years of deregulation, most notably the repeal of the Glass-Steagall Act. Lobbying by the financial industry has stifled reasonable proposals like a sales tax on financial transactions.

Multinational corporations through trade agreements like NAFTA enjoy more big advantages with international disputes resolved by the business-friendly World Bank, International Monetary Fund and World Trade Organization. Federal judicial law protects our biggest companies from foreign infringement. The proposed Trans-Pacific Partnership would put governments around the world at the mercy of corporate decision-makers.

(d) Education

Public colleges have helped to train the chemists, physicists, chip designers, programmers, engineers, production line workers, market analysts, and testers who create modern technological devices. At the primary and secondary levels, the "equal opportunity" principle mandated by the Supreme Court in Brown vs. the Board of Education has contributed to business growth, building the math and language skills that until recently led the world.

(e) Defense

The U.S. government will be spending $55 billion on Homeland Security this year, in addition to $673 billion for the military. Most of their resources, along with local police and emergency services and the National Guard, are focused on crimes against wealth.

Belittling Us Instead of Paying Us Back

Instead of paying for their decades of government-supported growth, corporations have nearly stopped paying taxes, leaving payroll deductions and individual income taxes as the main sources of federal revenue.

From 2003 to 2011, total corporate profits more than doubled, from $900 billion to almost $2 trillion, but the corporate income tax rate dropped by more than half, from 22.5 percent to 10 percent.

On top of this, the most profitable corporations get the biggest subsidies. The Federal Reserve provided more than $16 trillion in welfare assistance to financial institutions and corporations. According to U.S. PIRG and Citizens for Tax Justice, 280 top-earning Fortune 500 companies, which together paid only half of the maximum 35 percent corporate tax rate, received $223 billion in tax subsidies.

What have they been doing with their windfall profits? Anywhere from $2.2 trillion to $3.4 trillion is being held by non-financial corporations, who have chosen to fatten stockholders rather than invest in new production facilities and the employees needed to make them functional. Worse yet, as reported by The NationMarket Watch, and Business Insider, they've been steadily cutting jobs in order to 'streamline' their operations.

For the employees who remain, average real wages were $17.42 in 2007, down from $19.34 in 1972 (based on 2007 recorded wages). Wages as a percentage of the economy are at an all-time low.

An Added Insult—Profits Declared Overseas, but Not in the U.S.

Multinational corporations use the vacuous argument of an excessive U.S. tax rate to defend their tax avoidance, although in reality the U.S. has the third-lowest rate of tax revenue per GDP among all OECD countries.

The biggest tax avoiders are not content to just shirk their tax responsibilities. To sustain the image of profit making for their investors, many of them claim hefty worldwide incomes while reporting little or no income in the U.S. Pfizer, for example, just declared their fifth straight annual loss in the U.S., despite a five-year income total of over $50 billion.

A review of SEC data reveals more chicanery. In the last two years Citigroup reported $27.8 billion in foreign income, but a $5 billion loss in the United States. Exxon credits the U.S. for one-third of its revenue and 40 percent of its assets, but only 15 percent of its income. Apple has two-thirds of its employees in the U.S. but claims only one-third of its profits as U.S. income.

Summing Up the Absurdity: You Made Us the Best, but We Don't Have To Pay

Forbes responded to suggestions of American decline with this stirring defense: "We lead the world in Internet innovation, music, movies, biotech and many other technological fields that require out-of-the-box thinking. From Apple to DreamWorks Studios, from Amazon to Zynga, we are the world's innovators."

They might have added, "And we don't have to give anything back to the people who made it all possible."



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ABOUT Paul Buchheit

Paul Buchheit is a college teacher with formal training in language development and cognitive science. He is the founder and developer of social justice and educational websites (UsAgainstGreed.org, RappingHistory.org, PayUpNow.org), and the editor and main author of "American Wars: Illusions and Realities" (Clarity Press). He can be reached at paul@UsAgainstGreed.org.

The problem with the USA and

The problem with the USA and the world is it's filled with Stupid People.
There is a technology 6 thousand years old that will fix this problem it is called
TM
see

http://www.davidlynchfoundation.org/

http://www.youtube.com/watch?v=TfIqvZLIZz8

http://www.youtube.com/watch?v=z2UHLMVr4vg&NR=1&feature=endscreen

study everything on these sites - watch all the videos
cough up the money to learn TM properly & sit twice a day in silence for 20 minutes
nature will come to save us

Eat only organic food. Preferably food you have grown yourself.

Protect yourselves and let the dumb ones go off eating Stupid Food

If you live in the USA travel to Fairfield Iowa - see their plans
for the future of our dear world ... the light glows bright there.
Good luck !

They are greedy tax-cheating

They are greedy tax-cheating bastards. Tax cheats are suppose to go to jail, but like the banks and brokerage houses, those who commit these dishonest acts are too rich to jail. Obama has become no better than the cheaters, because he knows who they are and refuses to prosecute them. Sadly, we are all owned and controlled by the 1% including Congress and the current administration.

Obama calls these thieves

Obama calls these thieves from corporate Amerika "Savvy Businessmen".

Thank you for this fantastic

Thank you for this fantastic article explaining the fleecing of America in such a concise way. I have been enthralled in a debate with a conservative about the minimum wage for several days now. This article says in a way I could not, exactly what I have been trying to say. Sometimes it is difficult to argue with someone with comments like, " you are an idiot if you think any company owes you anything", or "you must have been a waitress, or similar", when I stated that I earned around $2 pr hr. in 1975. ( I was a "secretary", like most women my age in 1975). Again, thanks! I hope you don't mind if I share this article with the smartest person ever!

Yes, we agree, but much of

Yes, we agree, but much of the story is still missing from conversation. The problem is that it becomes complicated and detailed. Reading is not so much fun when you get into the weeds of what is truly going on. A few quick points: USDA continues to subsidize a large portion of domestic farming. Tobacco still receives $$, Large corporate agribusinesses receive the bulk of the subsidies.
Exxon-Mobile, the most profitable corporation in the world, receives $millions in subsidies while campaigning against subsidizing solar and wind start-ups. The transportation industry is one of the largest beneficiaries of government largess. Super highways, airports, shipping facilities and ports, just to name a few. Still, the top 1% finance the election of legislators, executives and even judges in some districts. The latest abuse of this power is the battle for reform of gun laws. Even though 91% of Americans support universal background checks, the measure is likely to fail due to corporate financed roadblocks. There is a solution, but it won't be easy. We must elect Democrats who promise to follow the peoples lead. Those who don't must be voted out. District realignment must be taken out of the hands of politicians as was done in California. We the People must reclaim our position as declared in the Declaration of Independence: That the power to govern is derived from the consent of the governed.

A person should look to the

A person should look to the ownership of the multi-national corporations before they assume that any multi-national corporation has the welfare of the USA at heart.
It is past time to charge multi-nationals a fee for the priviledge of doing business in the USA.
The fact that they say they are losing money from their USA operations is cause to encourage them to move their business elsewhere.

I have only one thing to say:

I have only one thing to say: BRING BACK THE GUILLOTINE! TO THE BARRICADES, MY FRIENDS!

Don't worry! The 1% percent

Don't worry! The 1% percent can afford the antidote and will be well locked away in their "communities" when they let the viruses loose. They'll have all the money they need to rule the world after they thin the herd. But It's doubtful that any of them will know how to change a light bulb, so they'll soon miss us pee-ons.
Anyhow, economic injustice will be a thing of the past at that point since all the poor folk will be gone.

I still say real estate is

I still say real estate is the only thing average citizens can control by using a raffle system to buy and sell real estate. By the way Brian Glennie you may be pushed out of the upper class just like Cyprus so your money my not count anymore. The banks may be to big to fail but we can take the wind from their sail. Stop mortgages Stop car payments and spend the money on our own families.

Free Enterprise is on

Free Enterprise is on 'life-support'.
Modern civilization may not survive the vulture nature of Monopoly Capitalism?a little ditty heard on Wall St: " The Middle Class can kiss my arse,
I've joined the Upper Class at last."

With all due respect Paul,

With all due respect Paul, the title of this article should read "The TREASONOUS BETRAYAL of America's Legislators"! These abhorrently greedy corporations could not have fleeced America to the degree they have all on their own. America's legislators were, and continue to be, complicit in sneakily writing and passing legislation that has provided these egregious corporations with massive $$$$amounts of tax loopholes, government subsidies (corporate welfare), and escape from laws protecting humans, animals, and the environment! THEY SHOULD ALL BE HUNG FROM THE HIGHEST TREE FOR TREASON TO AMERICA!

As Walt Kelly said through

As Walt Kelly said through Pogo, "We have met the enemy and he is us." The answer is to stop dealing with and purchasing from these companies whose only ambition is to rule. Deal with home based small companies where possible.

Paul, I agree with your

Paul, I agree with your position. I just regret that you did not take the time to mention work visas, like the H-1B visa, OPT visa, L-1 visa, etc that the White House and Congress have granted to the multinational corporations that the multinational corporations use to replace US STEM workers with cheap, entry level workers from low cost labor centers in India and Communist China to move our technology, industry, and jobs to the same low cost labor centers in India and Communist China.

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