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Middle Wisconsin News
www.MiddleWisconsin.com May 5, 2011

Welcome to Middle Wisconsin News. Three weeks have passed since we published our last issue, and we are once again highlighting taxation because it relates to the government austerity measures harming families all across America. Along with introductions to excellent websites on the subject, we are republishing the ―Tax Talking Points” document (see last 2 pages of newsletter) developed by the MW Research Committee in April. Also included in this edition is an article on the status of the senatorial recalls. As we are all aware, this is the next critical battle in overcoming Governor Scott Walker’s attack on unions and working families. We are pleased to have the work of several Middle Wisconsin members in this issue, and we feel sure you will appreciate their contributions. We are continuing to learn and develop at Middle WI News, and we expect to have a more established format for the next edition of the newsletter. Sarah Thurs has done extraordinary work designing these first publications to get us up and running, but her true expertise is as an editor. To help her step back into that role, Tom Michlig has graciously agreed to provide us with his graphic design time and talents for future issues, and we are excited about the new doors this will open. We are also grateful to Wix Covey for sharing his ideas, enthusiasm, and connections with us. It’s exciting to see our group grow. As always, it is the goal of the newsletter to represent all of the members of the Middle Wisconsin community. This is our newspaper. If you are interested in joining the Middle WI News committee or in writing an op-ed, essay, or article, please see our ―Call for Submissions‖ info on page 4. We hope you enjoy this 3rd edition of Middle WI News. Editorial Committee Dave & Paul Svetlik, Jim Mattes, Sarah Thurs, Wix Covey, & Tom Michlig © 2011Middle W is c ons in

Your 2010 Federal Taxpayer Receipt
The deadline for paying income taxes (April 18) has come and gone for another year, but few of us have more than a vague idea of where our tax dollars actually go. This leads to misinformation about government waste or the percent of revenue used for unpopular programs. The following websites have been designed to provide taxpayers with a detailed receipt showing exactly how their tax dollars are used: www.whitehouse.gov/taxreceipt www.thirdway.org/taxreceipt

In his State of the Union Address, President Obama promised that this year, for the first time ever, taxpayers would be able to go online & see exactly how federal tax dollars are spent. It’s easy: 1. Visit www.whitehouse.gov/taxreceipt 2. Enter 3 pieces of information from your 2010 tax return— Social Security Tax, Medicare Tax, & Income Tax. 3. Click Calculate Receipt. You will instantly get a breakdown of how your specific tax dollars are spent on over 40 programs and services, like education, veterans’ benefits, and health care. It’s that simple. When people have the correct facts and figures, they can more wisely participate in democracy.

Middle Wisconsin News

May 5, 2011 Page 2

Recall Elections to Be Held July 12
By Jim Mattes

May 13 & 14
Developing Sustainable Communities 8 groups unite to present an idea forum at the UWMC Center for Civic Engagement. The event begins at 9 a.m. and wraps up at 3:30 p.m. each day. Friday—The focus is on Business & Government. Saturday—The focus shifts to Households, Food Systems, & Transportation. Learn about the ―Natural Step‖ program, a framework used by organizations and communities to move toward economic, social, and environmental sustainability. Following the speakers each morning are lunch & networking, 2 breakout sessions, & a wrap-up session. For more information or to register, visit: http:/

If the Government Accountability Board (GAB) has its way, all 9 potential recall elections for state senate will be held on the same day, July 12, pending approval of the signatures submitted by the recall petitioners. A Dane County judge Monday struck down a ruling that had set an early deadline for reviewing the recall petitions that have been filed against the 9 senators. The GAB will now have until the end of May to validate signatures and determine which petitions trigger a recall election. Democrats are outraged, feeling that the extra time provided the GAB gives out-of-state special interest groups more time to ―protect their investments,‖ according to Democratic Party spokesman Graeme Zielinski. He feels that the delay benefits candidates like Hopper and Kapanke, who are benefiting from out-of-state corporate cash. Democrats are also concerned that during this delay, Republicans may try to fast-track bills suiting their agenda, such as the Voter ID bill and Carry and Conceal. The Court’s ruling affects the 8 recall petitions filed prior to last Thursday. The one recall that is not affected is that filed against Robert Cowles, R-Green Bay, which will follow the normal review deadline process. Projections have been made regarding the prospects of each of these recalls in terms of their potential ―success.‖ While it is still early to assign categories of ―Toss-up,‖ ―Lean,‖ or ―Likely‖ ratings, we can group these senators in terms of ―opportunities for takeover.‖ Taken together, they suggest that Democratic gains are more likely than not and that a Democratic takeover of the chamber, while a long shot, is still a distinct possibility. The projections listed below include the percentages of the 2004 and 2008 Presidential elections, as well as the 2010 Governor’s race and the incumbent Senator’s 2008 race.

Democratic Opportunities
First Tier Randy Hopper—(Bush 57%, McCain 47%, Walker 58%, Hopper 50.1%) Hopper’s district, near Oshkosh, would normally point to a ―somewhat vulnerable‖ rating, but his recent scandal involving his residence and an alleged mistress put this seat into the ―very vulnerable‖ category. His opponent will be Jessica King, the current deputy mayor of Oshkosh. Dan Kapanke—(Bush 46%, McCain 38%, Walker 50%, Kapanke 51.4%) Kapanke’s district in LaCrosse County showed one of the largest swings away from Scott Walker of any in the state, and Walker barely carried this district in 2010. Add in the fact that Tuesday saw Steve Doyle win the Assembly seat in the most Republican section of the district, and the indicators point to this seat being ―very vulnerable.‖ His opponent will be Rep. Jennifer Shilling, the same opponent who nearly beat Kapanke in 2008. Second Tier Sheila Harsdorf–—(Bush 51%, McCain 48%, Walker 58%, Harsdorf 56.4%) Harsdorf’s district is in the far northwest bulge of the state, which swung heavily against Prosser in April’s Supreme Court election. She did win handily in 2008, so she will be a formidable opponent. The Democrats have selected Shelley Moore, an Ellsworth high school teacher and NEA Board Member to oppose her. Expect lots of anti-union, anti-teacher advertising to be hurled at Moore in this race. Luther Olson—(Bush 56%, McCain 47%, Walker 57%, Olson–Unopposed) Olson’s district has a distinctly Republican tilt, with Walker and Prosser both winning there handily. Olson has had little or no opposition in years, so he appears to be in substantially better position than Kapanke or Hopper. His opponent will be Rep. Fred Clark of Baraboo.

Early pricing: Friday $30 Saturday $15

© 2011Middle W is c ons in

Middle Wisconsin News

May 5, 2011 Page 3

Recall Elections—Continued
Third Tier Alberta Darling—(Bush 53%, McCain 47%, Walker 54%, Darling 50.5%) Dems are excited about this race largely because of Darling’s near loss in 2008 and her recent comments during the Joint Finance Committee’s public hearings that ―she doesn’t really listen to the people who come to these hearings.‖ Former state lawmaker Sheldon Wasserman is considering entering the race against her. He lost to her by less than 1,000 votes in 2008. This district is in the highly Republican Milwaukee suburbs, so this seat will still be a tough win for the Dems.

Mondays 5 pm Day’s Bowl-A-Dome Wausau Bring a friend or two and join Middle Wisconsin members Monday nights to talk current events & have some fun.

Robert Cowles—(Bush 47%, McCain 46%, Walker 57%, Cowles–Unopposed) This district comprises the Green Bay suburbs, and he has established himself with solid credentials prior to his budget repair vote. He will be tough to unseat.

Republican Opportunities
First Tier Jim Holperin—(Bush 53%, McCain 46%, Walker 57%, Holperin 51%) This district is in a northern district that gave Prosser nearly the same margin as Walker. Recall supporters have chosen Tea Party favorite Kim Simac to oppose Holperin, who has already begun running ads touting his service to the district. He will have his hands full retaining his seat. Dave Hansen—(Bush 52%, McCain 42%, Walker 54%, Hansen 54.6%) Hansen’s district in Green Bay was won by Prosser last month. His opponents are looking for a challenger who can put together a credible campaign. Hansen is vulnerable but probably has a slight edge against whoever is chosen. Second Tier Bob Wirch–—(Bush 48%, McCain 41%, Walker 53%, Wirch 52.4%) Based in Kenosha, this district is as close to evenly divided politically as any in the state. Wirch could have a tough race if opponents can find an attractive challenger. Julie Lassa—(Bush 47%, McCain 39%, Walker 51%, Lassa 68%) Recall supporters have not produced sufficient signatures yet and have until May 16 to do so. However, her district is solidly Democratic. She should be safe, barring a complete collapse for the Dems. Meanwhile, state Republican leaders said on Wednesday that if the courts do not take action by early June, they could re-pass the anti-union parts of the budget repair law as part of the state budget. As it should be noted, this was always a legal option given the particular nature of this fight. This potential action begs activists to get out to make their votes count in these upcoming recall elections. July 12 will be a key date in determining the eventual fate of the budget bill and other pending legislation.

© 2011Middle W is c ons in

Middle Wisconsin News Information Technology Solutions

May 5, 2011 Page 4

An Open Letter to Gov. Walker
Below are just 4 paragraphs reprinted from an Open Letter that Joyce Leudke sent to Gov. Walker. The original letter was much longer. Joyce has approved of this shortened version to be included in this newsletter.
Middle Wisconsin News is seeking submissions. We are looking for letters to the editor, articles on relevant topics, and reports from people on the street (rallies, visits with politicians, school board and city council meetings, etc.) We ask that letters be limited to 600 words and that references be cited where appropriate. Please provide author name, municipality, and phone number for purposes of verification. Feel free to contact us with your ideas for articles. We are seeking people who wish to submit occasional work and those who would like to be regular contributors. Topics can include politics, social issues, economics, education, local business, unions, events, and other appropriate topics. We hope to represent the broad spectrum of people: blue collar and white collar workers, public and private employees, union and nonunion members, business owners, farmers, and more. Submissions may be edited for length, clarity, accuracy, and taste, but we will seek the author’s approval before publication. Emailed submissions should be sent in plain text or as Microsoft Word attachments. If you would like to contribute, contact dave@middlewisconsin.org.

Dear Gov. Walker: Your proposed budget does not reflect the values of Wisconsin or the values of Wisconsinites. We believe in working together: helping our neighbor, sacrificing for our state and country, caring for the poor, the disadvantaged, the vulnerable, the veterans, the elderly, and the disabled. We believe in advocating for people who do not have a voice, or have lost their voices because they do not have the political clout that comes with money. We believe in pulling together for the good of all people in good times and especially so in hard times. We believe in giving to charities—with money and/or time. We come together to celebrate the beauty of our state and the goodness of its people. We work tirelessly in our occupations to produce quality goods and services, educate our citizenry, and protect the environment. Our elected officials have, for the most part, been honest and have a vision to improve our state in every way they can. We are probably some of the hardest working people in the United States. We have pride in our students’ high achievements (usually within the top 5 in standardized test scores). We cheer for and encourage our sports teams. Best of all, we LOVE OUR STATE because we know for the most part we maintain a high quality of life. And for those who do not share this same quality of life for whatever reason, we take care of them and sacrifice for them. To be honest, what is happening in our great state is absolutely heartbreaking. I have to admit, I have cried! I have mourned hearing neighbor vs. neighbor attacks, hearing public servants being singled out as the “haves” and the rest of the citizens the “have nots.” It hurts to see our state divided with such hateful rhetoric. It causes me to grieve over what have lost in this short three months’ time. I worry about how our state is going to heal from the harm that has been done to us by pitting one group against another. What is happening in my once proud state is not the vision I have for us. I believe we are Wisconsinites first and Americans next. We are proud. We have a “can do” spirit that has carried us through worse times than this. I do not believe in your dismal, pessimistic vision for the state of Wisconsin. I do not share your vision of “We are broke.” I share President Obama’s vision of hope and resilience. We will get through this somehow, but you need to lead us in a way that unites us—not divides us. You need to show us that you are a leader who unites—not someone who pits us against each other. You need to show us that you are not beholden ONLY to your campaign contributors, but that you owe your allegiance to each person in this great state. You can start fresh today. I suggest you start immediately and change your course and your rhetoric. Be a leader worthy of the people of Wisconsin. I believe in hope and that you can, by changing your course, bring healing to this state. Sincerely,

© 2011Middle W is c ons in

Joyce Luedke

Middle Wisconsin News Information Technology Solutions

May 5, 2011 Page 5

Interesting Facts...

A billionaire, a tea partier, and a union member were seated at a table that had a plate of 12 delicious cookies. The billionaire reached over and took 11 cookies. He then looked at the tea partier and said, ―watch out for that union guy; he’s trying to take your cookie.‖

Hedge Fund Managers Set New Payout Records in 2009
Excerpt from Reuters magazine | BOSTON | Thu Apr 1, 2010 11:39am EDT

―Seven of the world's top hedge fund managers earned 10-figure paychecks and one set a record for the highest-ever payout last year due to a stock market rally that pushed returns to their highest levels in a decade. Together, the industry’s 25 best-paid managers collected a record $25.33 billion, more than double the amount they took home in 2008 when the financial crisis left many prominent funds nursing heavy losses. In 2007, the top 25 set a record by taking home $22.3 billion.‖

Pay of Hedge Fund Managers Roared Back Last Year
Excerpt from the New York Times | Business | March 31, 2010


―But in a startling comeback, top hedge fund managers rode the 2009 stock market rally to record gains, with the highest-paid 25 earning a collective $25.3 billion, according to the survey, beating the old 2007 high by a wide margin. The minimum individual payout on the list was $350 million in 2009, a sign of how richly compensated top hedge fund managers have remained despite public outrage over the pay packages at big banks and brokerage firms.‖

Taken from a recent article by Les Leopold, author of “The Looting of America.”

Some of the top 25 hedge fund managers made more than $1 billion in 2009. Some made less, but on average they made $1 billion each. Assuming a teacher is paid $50,000 plus $18,000 in benefits for a total of $68,000, a single hedge fund manager earns as much as 14,705 teachers. Additionally, the hedge fund manager pays a lower tax rate than the teachers (15%) because his/her income is treated as capital gains. Milwaukee currently has about 5,475 public school teachers, Madison 1,938, Minneapolis 3,302, and St. Paul 3,304, for a total of 14,019 teachers. One hedge fund manager makes more than all of the teachers in all of these districts combined. Wonder why there's government debt?
© 2011Middle W is c ons in

Middle Wisconsin News Information Technology Solutions

May 5, 2011 Page 6

The Politics of Crime in Wisconsin
By Virginia Kirsch

Middle Wisconsin is an independent, citizens’ coalition working to evaluate and support political candidates and measures that promote just and transparent government, healthy communities, social responsibility, thriving local economies, environmental stewardship, and quality education.

The ―Future of Public Higher Education‖ Forum, held at the University of Wisconsin–Marathon County on April 18, 2011, covered the impact of Governor Scott Walker’s Budget on Wisconsin higher education. An intriguing part of this discussion compared how Minnesota and Wisconsin, with similar demographics, differ in their approach to crime. Minnesota has about 10,000 inmates in their prisons, while Wisconsin has over 23,000. Minnesota uses alternatives to incarceration with parole and probation plans, and as a result, is able to invest more money in education. According to a recent Pew study, nearly half of Wisconsin prisoners commit repeat offenses and return to prison, and Wisconsin now spends more on prisons than on higher education. A correlation has been made between one’s level of education and the chances of being incarcerated. Studies show a large return on investments in pre-school and helping at-risk students. We either ―pay now or pay later.‖ A community that is focused on education, rather than prisons, is likely to be a more positive place to live. Unfortunately, the ―politics of crime‖ have led to prisons as a growth industry in Wisconsin. The ―get tough on crime‖ policies of Tommy Thompson increased prison costs by raising the numbers of incarcerations. In 1987, Wisconsin spent $185 million annually on prisons. By the year 2003, $1 billion was spent. Gov. Walker’s budget shows $1.3 billion for prisons in 2011– 2012. When Walker was in the State Assembly in 1997, he authored the bill that became the Truthin-Sentencing Law. This law increased the maximum sentences for felony convictions and eliminated parole, thereby increasing the number of prisoners and their length of stay. Wisconsin now has one of the strictest prison laws in the nation. Governor Jim Doyle tried to weaken ―truth-in-sentencing‖ by allowing early release of nonviolent offenders. This saved thousands of dollars. By developing new methods of correction, Doyle had hoped to stop prisons as a growth industry. Governor Walker now wants a return to tougher sentencing. Research shows that Wisconsin does not use prisoners for cheap labor to the extent found in other states. Badger State Industries was formed in 1913 to provide prisoners with vocation training and to develop work skills. It also provides products and services for state, county, and municipal agencies. Making license plates is a well-known function, however other industries in the state prisons are making wood furniture, detention furniture, new and recycled signage, and doing laundry. There is also a dairy farm, feedlot, and cash crops for prisoners to learn agricultural skills. Another industry is recycling computers and recycling wheel chairs. There is no evidence of private companies using prisoners for cheap labor. Questions often arise about the prison in Stanley, Wisconsin. This facility was built by a private company on speculation (anticipating an increase in prisoners). Wisconsin bought the prison and Stanley welcomed the new industry. The prison, with 1500 inmates, created 400 jobs which local people needed. However, an excellent report by Tracy Huling shows that using prisons to solve the problem of unemployment in small rural towns is not all positive. Living in a town with a prison-town identity creates its own set of problems. SOURCES ―Building a Prison Economy in Rural America,‖ by Tracy Huling www.prisonpolicy.org (This is an excellent article with an in-depth look at what prisons do to small rural towns.) ―Big House on the Prairie‖ (Impact of Prison in Stanley, WI) www.minneapolisfed.org ―The Cost of Corrections: Wisconsin and Minnesota‖ www.wistax.org

© 2011Middle W is c ons in

Middle Wisconsin News

May 5, 2011 Page 7

A Poet's Advice
A poet is somebody who feels, and who expresses his feelings through words. This may sound easy. It isn't.

i left graduate school in history to do real work in the world of capitalists

“There are two novels that can change a bookish fourteen-yearold’s life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs.” — John Rogers Kung Fu Monkey

A lot of people think or believe or know they feel—but that's thinking or believing or knowing; not feeling. And poetry is feeling—not knowing or believing or thinking. Almost anybody can learn to think or believe or know, but not a single human being can be taught to feel. Why? Because whenever you think or you believe or you know, you're a lot of other people: but the moment you feel, you're nobody-but-yourself. To be nobody-but-yourself—in a world which is doing its best, night and day, to make you everybody else—means to fight the hardest battle which any human being can fight; and never stop fighting. As for expressing nobody-but-yourself in words, that means working just a little harder than anybody who isn't a poet can possible imagine. Why? Because nothing is quite as easy as using words like somebody else. We all of us do exactly this nearly all of the time—and whenever we do it, we are not poets. If, at the end of your first ten or fifteen years of fighting and working and feeling, you find you've written one line of one poem, you'll be very lucky indeed. And so my advice to all young people who wish to become poets is: do something easy, like learning how to blow up the world—unless you're not only willing, but glad, to feel and work and fight till you die. Does this sound dismal? It isn't. It's the most wonderful life on earth. Or so I feel. — e. e. cummings

at the chicken factory i was assigned to the freezer locker and the deboning machine one day as I was cleaning the machine with a steam hose the steam hose whipped off the floor sprayed my feet and took off the skin it took four weeks to heal the insurance man came after three weeks and said return to work i say no my feet are not healed after four weeks when I returned to work my job was gone there was no union forty years later my feet still remember steam in the chicken factory — cyrus campen local poet

© 2011Middle W is c ons in

Middle Wisconsin News

May 5, 2011 Page 8


“And if all others accepted the lie which the party imposed—if all records told the same tale— then the lie passed into history and became the truth.” —George Orwell, 1984 (published in 1949)

The Fallacy of Government Spending
By Dave Svetlik

All across America we are being told that government spending is out of control, and we must sacrifice to rein in debt. We have accepted this as fact, but the actual record paints a different picture. Government spending as a percent of gross domestic product has changed little in 4 decades. Using statistics available at www.usgovernmentspending.com , we find that federal spending was 18.84% of GDP in 1970, rose to a high of 22.92% in 1982, and settled at 20.65% in 2008. If we include state and local spending, a similar pattern emerges. Total government spending was 31% of GDP in 1970, rose to a high of 37.22% in 1991, and sank to 36.94% in 2008. Because of bank bailouts and stimulus funding, federal spending rose to 24.57% of GDP in 2009 and 25.44% in 2010. However, these years must be viewed as anomalies resulting from the economic collapse. The critical issue is what occurred with government debt from 1970 to 2008, even though spending remained relatively constant. Federal debt was 35.72% of GDP in 1970 and remained near this level until ending 1982 at 35.10%. At this point (not coincidentally at the same time that the Ronald Reagan presidency was ushering in the era of ―trickle down‖ economics), we begin to see a dramatic change. Federal debt rose to 38.96% in 1983 and, with minor reductions at the end of the Clinton years, climbed steadily to 69.15% in 2008. If we include state and local government debt, the pattern is the same. Total government debt was 49.55% in 1970 and closed out 1982 at 47.52%. In 1983, total debt rose to 51.81% and it continued rising to end 2008 at 86.81%. The graph above compares total government (combined federal, state, and local) spending and debt as a percent of GDP for the years 1970 to

2008. (Note the rise of both debt and spending in Reagan and Bush years and the leveling or drop in Clinton years.) This discussion is obviously simplistic given the complexity of America’s economic problems, but the claim that our national debt is the result of runaway government spending is the greatest oversimplification of all. Government has largely been doing what government is intended to do (i.e., providing the services, regulations, and infrastructure required for a healthy society). If we are to understand what caused America’s growing debt, we must look elsewhere. Much has been written to explain the economic collapse and the growth of government debt, but two factors stand out; deregulation (especially of the financial industry), and tax cuts for corporations and the ultra-wealthy. Deregulation began with President Carter and continued through every administration thereafter. Largely harmful to average Americans, it enabled the predatory banking practices responsible for the economic crash. The dismantling of corporate and progressive taxes on the wealthy over the past 30 years has resulted in historic levels of concentrated wealth and the loss of revenue required for government to meet its normal obligations. Making matters worse, the high unemployment caused by the economic collapse has further reduced revenue. Orwell’s prescient words are more applicable to each of us than we realize. When we unthinkingly agree that government has overspent, we become complicit in the myth—we become the ―all others‖ who accepted the lie. Unfortunately, this is just one of many myths oppressing ―middle‖ Americans. If we ever hope to regain control of the message, we need to be aware of how we may inadvertently be part of the problem. For two excellent articles on controlling the message see ―What Conservatives Really Want‖ and ―Untellable Truths by George Lakoff, Professor of Linguistics at UC—Berkeley.

Talking Points
Robin Hood in Reverse: A Review of Current Taxation in Wisconsin and the United States
Throughout the country, the discussion surrounding tax breaks for the wealthy and corporations have become the center of a heated debate.
In Wisconsin, proponents of corporate tax cuts say they boost economic growth and corporate investment. Would Governor Walker’s proposed cuts be good for Wisconsin’s economy? According to Nick Johnson, Vice President from State Fiscal Policy, “The evidence does not support that argument. Here’s why: states have to balance their budget. So the revenue that states lose from say, corporate tax cuts, has to be made up for by greater cuts in public services. The services that states provide, education, health care, public safety, transportation, are critical to, not only quality of life, but also to making this state attractive to businesses that want to invest and grow. Every dollar that you cut out of education, because of a corporate tax cut, is a dollar that can’t be spent on creating the high quality, 21st century workforce that we know, from business executives, is what they really need.” Johnson also states, “There’s another issue with corporate income tax cuts. A lot of the benefit from a corporate income tax cut will go to multi-state corporations and there’s no guarantee at all that they will spend that money in-state. Much of it could go to out of state shareholders, or to increase their investments in other states. So from a state perspective, it’s particularly not helpful to cut corporate taxes.”

Top 10 Worst Tax Avoidance Corporations
1. Exxon Mobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings. 2. Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion. 3. Over the past five years, while General Electric made $26 billion in profits in the United States, it received a $4.1 billion refund from the IRS. 4. Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009. 5. Boeing, which received a $30 billion contract from the Pentagon to build 179 airborne tankers, got a $124 million refund from the IRS last year. 6. Valero Energy, the 25th largest company in America with $68 billion in sales last year received a $157 million tax refund check from the IRS and, over the past three years, it received a $134 million tax break from the oil and gas manufacturing tax deduction. 7. Goldman Sachs in 2008 only paid 1.1% of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion from the Federal Reserve and U.S. Treasury Department. 8. Citigroup last year made more than $4 billion in profits but paid no federal income taxes. It received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury. 9. ConocoPhillips, the fifth largest oil company in the United States, made $16 billion in profits from 2007 through 2009, but received $451 million in tax breaks through the oil and gas manufacturing deduction. 10. Over the past five years, Carnival Cruise Lines made more than $11 billion in profits, but its federal income tax rate during those years was just 1.1%.
Source: Senator Bernie Sanders' floor speech, 3/27/11, visit http://sanders.senate.gov

“…the reality is that in most states corporate income taxes make up too small a share of overall state and local taxes to really affect corporate investment decisions in the long run.”
Source: Center on Budget and Policy Priorities, www.cbpp.org

Where Do Our Federal Tax Dollars Go?

Six Tests for Corporate Tax Reform

Source: By Chuck Marr and Brian Highsmith, Center on Budget and Policy Priorities, www.cbpp.org Updated February 28, 2011 1. Contribute to long-term deficit reduction. Corporate tax revenues are now at historical lows as a share of the economy, at a time when the nation faces deficits and debt that are expected to grow to unsustainable levels. Reduce the tax code’s bias towards debt financing. The current corporate tax code encourages corporations to finance their investments with debt (e.g., by issuing bonds) rather than equity (e.g., by selling stock). Reduce the tax code’s bias toward overseas investments. U.S. multinationals pay much lower taxes on profits from their overseas investments than on profits from their domestic investments. That gives corporations a strong incentive to shift economic activity and income from the United States to other countries. Improve economic efficiency by reducing special preferences. The corporate tax code taxes different kinds of corporate investments at very different rates. This “unlevel playing field” encourages businesses to choose among investments in substantial part based on their tax benefits, instead of making those decisions based entirely on investments’ real economic value. Provide more neutral treatment of corporate and noncorporate businesses. Over time, various policy changes have made it easier for companies to enjoy the benefits of corporate status without being subject to the corporate income tax. Reform should reflect the guiding principle that firms engaging in similar activities and enjoying similar legal benefits should be taxed at similar rates. Take specific steps to discourage tax sheltering. If policymakers lower the statutory corporate tax rate to well below the top individual tax rate, they should also establish safeguards to prevent high-income individuals from sheltering their income in corporations in order to pay taxes at a lower rate.




Please Complete Your Own Research
Becoming an informed citizen is crucial to the future state of our democracy. Please take some time to review these resources and share them with your friends in the coming days. www.USUncut.org
US Uncut is a grassroots movement taking direct action against corporate tax cheats and unnecessary and unfair public service cuts across the U.S. Washington's proposed budget for the coming year sends a clear message: The wrath of budget cuts will fall upon the shoulders of hard-working Americans. That's unacceptable.



Center on Budget and Policy Priorities www.cbpp.org.com
The Center on Budget and Policy Priorities is one of the nation’s premier policy organizations working at the federal and state levels on fiscal policy and public programs that affect low- and moderate-income families and individuals.

Issue 2 April 16, 2010

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