Regards and Season's Greetings.
Let's start by opening the presents.
Given your interest in tax justice issues, we at TJN-USA thought you might be interested in a totally free link to a 56 minute version of the award-winning Sundance documentary
"We're Not Broke" -- the leading film about corp tax dodging and the role of tax activism in the Occupy movement.
After nearly a year of box office distribution, in the interests of having a wider impact, the film makers have generously offered to make the film freely available, to get as many people as possible at home and abroad to see it.
feel free to share widely with your friends and interested
organizations. (We have found that the film works very well as an
occasion for discussion and panels about tax fairness, and would be happy to share our knowledge of that, if it is iPod interest.)
NOW FOR THE BAD REASON -- and the reason why getting this film seen by as many
people as possible right now may be so important.
word from DC is this: in the urge to cut a fiscal cliff deal w the
Republicans in Congress, Obama MAY WELL BE turning to his corporate
cronies, and quietly negotiating a corp tax deal that will slash US nominal corp tax rates, or even move toward a territorial tax, plus permit Repatriation of accumulated offshore profits at ultra low rates.
This would undoubtedly really please big TNCs like Honeywell, JP Morgan, Exelon, and GE.
But it would be DISASTROUS for global and local tax justice, for many reasons. Notably:
1. It would further discriminate against small biz, over half of whom are taxed as partnerships/ LLCs or
Sub- S corps, and also don't make use of sophisticated structures like
offshoring intellectual property or passive service companies. Indeed,
their taxes will actually going up next year, because they are taxed at
2. It would look the other way at the fact that one key source for the $1.6 trillion of corp profits now
parked offshore has been the highly dubious offshoring of IP to low
tax jurisdiction like Bermuda and Ireland by firms like GE, Pfizer,
Apple, and Google -- to the tune of $70 b per year of lost US tax
high- tech dodging, which has exploded in the last decade, is largely
responsible for the fact that the US corp tax is at an all time low, in
terms not only of EFFECTIVE average tax rates but also revenue
generation. Since many states tie their corp income taxes to the federal
system, this is also having a negative effect at that level.
terms of ending destructive global " tax competition" -- the
destructive economic arms race that began in the 1980s, this is
precisely the wrong move. Back in January, we saw Canada slash its
federal corp tax rate to 15%; the UK soon followed with a cut to 21%.
The EU's beleaguered economies are under pressure to follow suit.
the US -- still by far the world's largest economy, with by far the
most significant TNCs -- now joins the race, the prospects for ending
this arms race -- let alone reforms like country-by-county reporting,
transfer pricing reform, or global unitary taxation -- will be very dim
In terms of the impact on developing countries, even big players like
China and India have found it difficult to keep up with TNCs ability to
move profits beyond the reach of taxes -- let alone poor countries, some
of which are actually seeing companies demand NEGATIVE corp tax rates,
after subsidies and forgiveness schemes are considered, in order to
invest in them. The impending US corp tax gutting, widely described in
the MSM as a " reform, " would only exacerbate this problem.
In short: i really hope that i am wrong. But it may well be the case that in the next few days and weeks, behind closed doors, the Obama Administration caves in to the business lobby and "seals the deal" on the US fiscal cliff by giving away the store on all these corp tax issues that are really CENTRAL to our whole tax justice agenda.
what can we do about it? As usual, the first step is education. So
watch the film, and then connect up with US tax activists like Citizens
for Tax Justice, TJN-US, and Americans for Fair Taxes (/TaxFairness)
that are leading the opposition on the ground in DC.
Second, lets have a discussion about getting other grass roots organizations with an interest in these issues involved.
Of course those of us who are journalists or self styled pundits should
be writing and tweeting and digging. THIS IS CLEARLY A SITUATION THAT
NEEDS MORE PUBLIC AWARENESS -- as well as public hearings.
Finally, here in the US, some may even want to call their Congressperson or Senator about this.
Or organize the kind of mass protests that have proved so catalytic in the UK.
ANY OTHER IDEAS? This is an opportunity as well as an emergency. I know it is Christmas/ etc. but that's kind of a blessing.
Yours in solidarity,