A video released Sept. 17 showed Republican presidential candidate Mitt Romney deriding those who he labeled as the 47 percent of the population “who are dependent upon government … who believe that government has a responsibility to care for them.”
Unintentionally, Romney’s outrageous words provided a fitting description for another group—the biggest banks and corporations who have been bailed out and subsidized to the tuned of hundreds of billions and trillions of dollars.
Now it has been revealed that many states turn over to corporate giants the state income tax collected from those corporations’ employees! This form of bribery is demanded by companies like GE, Dow Jones, Ford, Chrysler, Motorola, and others as part of the price of doing business in those states. Many states also allow big retailers like Wal-Mart, Lowe’s and others to keep all or part of the state sales taxes they collect.
But Mitt had no words of contempt for these corporate leeches. His ultra-condescending speech was aimed at the estimated 146 million people who receive Social Security, Medicare, food stamps, unemployment insurance or some other basic social benefit that overwhelmingly go to people struggling to keep their heads above water, including the elderly, single mothers and infant children.
While the bank and corporate bailouts supported by both Democrats and Republicans to the tune of hundreds of billions of dollars in 2008-09 are relatively well-known, the widespread practice of states turning over state income taxes collected from workers to the corporations employing them has only been recently exposed in a new book by investigative reporter David Cay Johnston, “The Fine Print: How Big Companies Use ‘Plain English’ to Rob You Blind.”
Interviewed on the NPR program “Fresh Air” on Sept. 20, Johnston reported that at least 19 state legislatures have authorized such payments for the purpose of retaining corporations in their states, or persuading companies to move in. In many cases, the corporations receive additional inducements including exemption of their profits from state taxes, subsidized buildings and infrastructure, and more.
The state income tax scheme works like this, according to Johnston: Corporations deduct state taxes from employees and then receive a dollar-for-dollar tax credit from the state government. If at the end of the year a worker hasn’t had enough deducted and must send in a check along with his or her tax filing, the corporation receives that additional payment as well.
These payments are the source of huge added profits. Over the decade ending in 2011, Motorola received $136 million from the state of Illinois alone, and Navistar $62.1 million. (Illinois Dept. of Commerce and Economic Opportunity chart in Reuters article by Johnston, July 19, 2011).
As Johnston points out, the taxes paid out to the corporations result in higher taxes or reduced services for everyone else.
Johnston himself is an advocate of the capitalist “market economy,” which he believes is being endangered by such payoffs and subsidies at the public expense. But “Fine Print” and Johnston’s earlier writings provide overwhelming evidence that the entire capitalist system is both “dependent upon government” and incurably corrupt.
