The rich and the poor

Income Taxation enables Colonialism

June 1st, 2013

I recently saw a documentary by VPRO titled “The Tax Free Tour.” You can watch it on Youtube at this link. This documentary basically confirms a couple of the points I made in my post titled “Income Taxation is Slavery,” and more specifically that the income tax actually benefits the rich while the poor and middle class suffer. Due to the income tax the rich get richer and the poor only get poorer — it forcefully enables the transfer of wealth from the poor to the rich.

In the documentary “The Tax Free Tour” you’ll hear EU parliamentarian Eva Joly say the following about the income tax system:

And that is the heart of the mechanism: Diverting what are in effect the public resources of the entire world, but especially the developing countries, to private shareholders. It’s colonialism by other means.

…

I’ve put my hope on citizens. I hope Londoners will one day be fed up that only the middle class and the poor pay taxes while Starbucks and Coca Cola don’t pay taxes, while Ikea and Total don’t pay taxes. One day the citizens will say: In the Scandinavian countries we pay 40% tax, in France we pay 20%. Hopefully citizens will rise in revolt against that.

And it’s not just Londoners that should be fed up but the entire world. Everywhere the rich find ways to game the system and basically steal and profit from the poor. A few months ago, for example, it was reported how Facebook not only paid no income tax, but even got money back from the US government:

Taxes are said to be one of life’s inevitabilities — unless you’re Facebook (FB), which last year not only didn’t pay a cent in federal or state income taxes, but actually will receive tax refunds of $429 million, according to a new report.

…

In the meantime, taxes for many individuals went up in 2013, making consumers feeling pinched.

I know from my own experience with buying ads on Facebook that their ad revenues are being routed through a couple of countries, as explained in the “The Tax Free Tour” documentary, and that they have a subsidiary in Ireland that does the billing only so that to the USA it appears as foreign income.

I was glad to see Mrs. Joly come to the same conclusion as I did based on what’s going on: This is colonialism, but only in a more “modern” and hidden way. We are all still slaves which were given the illusion of being free. For the full details see my post “Income Taxation is Slavery.”

The essence of all slavery consists in taking the product of another’s labor by force. It is immaterial whether this force be founded upon ownership of the slave or ownership of the money that he must get to live. Leo Tolstoy

The only solution we have is to rise up in revolt against this corrupt system that enslaves people all over the world. It’s not about getting the rich to actually pay taxes, but what needs to happen is that this income tax system needs to be completely eradicated from this planet. As long as it exists it will corrupt society and make people slaves to the elite.

Additional Notes

Here’s another example:

Nearly 60 top corporations used loophole to avoid paying billions in US taxes
Verizon and News Corp. are among the dozens of companies listed on the Standard & Poor’s 500 that paid a zero percent tax rate in the last year. The so-called effective tax rate is how investors explain the tax a company pays compared to its profit.

While it is not illegal in any way for major companies to pay a zero percent tax rate – or in some cases even less – Friday’s analysis by USA Today does highlight some of the creative methods those corporations use to avoid dipping into their profit margins, and how that may ultimately impact national policy on corporate taxation.

The top federal income tax rate currently sits at 35 percent, a number that has been the source of public frustration for many company executives. Yet Seagate (a data storage manufacturer with a market value of $15.9 billion), Public Storage (the largest self-storage firm in the world with a $29.5 billion market value), and others pay a lower tax rate than most individual middle-class American families.

“Investors hope company management is doing everything they can do to generate profit, legally,” Nick Yee of Gradient Analytics told USA Today. “But the tax code is gray, and there’s often no set guidance.”

Other notable companies on the list include MetLife (worth $53.9 billion), Regeneron Pharmaceuticals ($29.6 billion), Ventas ($19.3 billion), and Agilent Technologies ($16.9 billion).

Transferring payments to offshore accounts is one of the most popular ways for companies to avoid heavy tax burdens. For example, a company could organize foreign subsidiaries that make raw materials in countries with low tax rates. Executives would then buy the material from a foreign supplier at a price far above cost, according to USA Today, thus keeping a large profit.

Added on October 26th, 2013 at 1:48 pm
Here’s a video that discusses how Google and other corporations avoid paying taxes:

Added on January 31st, 2014 at 9:00 pm
Yet another example showing how the rich benefit from income taxation (they pay none, while the taxes collected from the poor and middle class flow to them via government contracts and tax returns):

Boeing, Second Largest Federal Contractor, Pays No Federal Income Tax in 2013
In its just-released annual report, Boeing Company reported that it claimed $82 million in federal tax refunds, despite reporting $5.9 billion in U.S. pre-tax profits last year. This represents an effective tax rate of -1.4 percent. Boeing paid just $11 million in state income taxes, an effective state tax rate of just 0.2 percent. The disclosures were made in Boeing’s Form 10-K filed with the U.S. Securities and Exchange Commission (SEC) last Friday.

Since 2008, Boeing has reported between $1.6 billion and $5.9 billion in profits each year, yet has paid no federal income taxes in three of those years. Over the last six years, Boeing has reported $26.4 billion in pre-tax profits to its shareholders, while claiming a total of $105 million in refunds from the IRS, an effective tax rate of -0.4 percent.

With $20 billion in sales to the federal government in fiscal 2013, Boeing was the nation’s second largest contractor. Boeing alone received 4.4 percent of all federal government contracts last year. Boeing reported to shareholders that 34 percent of its 2013 sales were made to the U.S. government.

Boeing’s CEO, W. James McNerney, Jr., received total compensation of $27.5 million in 2012, according to the company’s proxy statement filed with the SEC. Information on McNerney’s 2013 pay will be revealed when the company files its new proxy statement next month.

When any large corporation makes tens of billions of profits and pays nothing in taxes, it is scandalous. When a company that draws its lifeblood from taxpayer-funded contracts pays nothing to support the government it claims to serve, it is time to change the rules that allow such behavior to continue unchecked.

Added on February 20th, 2014 at 1:29 pm
And here’s another example of how the rich benefit from the system. In the end it’s only the middle class and the poor who actually pay taxes. This is a good example showing why the poor continue to get poorer and the rich get richer in this system fundamentally based on inequality:

HSBC Documents Reveal Criminal Conspiracy of Banks and Governments
On Sunday, international news outlets the Guardian and Le Monde, working with the International Consortium of Investigative Journalists (ICIJ), published articles based on their analysis of leaked files showing that the Swiss private banking arm of HSBC, Europe’s largest bank, functioned for years as a tax evasion and money laundering firm.

The company ran a branch that gave out “bricks” of hundreds of thousands of dollars in cash in foreign denominations and provided its wealthy clientele with advice on how to commit tax fraud, according to the reports.

These facts have for years been in the possession of international financial regulators and governments throughout the world—including those of Britain, France and the United States—which systematically covered them up. Neither the bank, nor its executives, nor any of the clients that utilized its tax dodging services have been criminally prosecuted.

No one should believe that HSBC is an aberration; there is no doubt that similar practices are carried out by all major international financial institutions. The HSBC files have unearthed a cesspool of corruption, criminality, bribery and collusion that pervades the entire capitalist system and the governments that defend it.

The HSBC revelations are only the latest in a series of scandals involving virtually every major financial institution. These have included the selling of fraudulent subprime mortgage-backed securities, illegal foreclosures, commodities fraud and the manipulation of LIBOR and international foreign exchange benchmarks.

HSBC was one of the institutions whose greed and lawlessness plunged the world into a crisis in 2008 from which it has never recovered, cost millions of people their jobs and launched a wave of austerity all over the world involving the slashing of workers wages’ and social benefits.

The list of people who used HSBC’s services include corporate executives, fundraisers and major donors to American, British and Australian political parties, and politicians from at least 17 countries, including Britain.

The trail of dirty money reaches as high as former US President Bill Clinton. British business tycoon Richard Caring, who once picked up more than five million Swiss francs in cash from the bank, donated $1 million to Clinton’s foundation from his Swiss bank account.

…

In addition to “legitimate” businessmen and high-ranking politicians, HSBC’s services were used by drug kingpins, weapons smugglers and traffickers in illegal “blood diamonds.” Reviewing the reports, it is impossible to determine where the criminal underworld ends and the ruling class of bankers and corporate CEOs and their millionaire political front-men begins.

While no bank executives or wealthy clients have been prosecuted, the one person out of this morass of criminality who faces serious legal consequences is the whistleblower who exposed them.

In 2009, an HSBC technical employee named Hervé Falciani came to realize that HSBC’s private bank was operating a huge tax evasion operation, and began collecting information to provide to Swiss authorities, which showed no interest.

…

For the global financial elite, the line between “legitimate” business activity and political donations on the one hand, and fraud, theft and bribery on the other, does not exist. Capitalist society is run by thieves and criminals, who see the law as a minor inconvenience. In the immortal words of Leona Helmsley, “Only the little people pay taxes.”

Added on February 13th, 2015 at 4:59 pm
In an article on NRC.nl titled “Geheime belastingdeals multinationals op straat” (November 6th 2014):

Een internationaal samenwerkingsverband van journalisten heeft de beschikking gekregen over bijna 28.000 pagina’s aan vertrouwelijke documentatie over belastingafspraken tussen multinationals en de Luxemburgse autoriteiten.

Uit de stukken blijkt hoe internationale bedrijven met hulp van advieskantoor PwC constructies bouwden om zo min mogelijk belasting af te dragen. Zij kregen hiervoor telkens de goedkeuring van de belastingdienst van Luxemburg.

In veel gevallen gaat het om bedrijven die nauwelijks activiteiten hebben in het groothertogdom, maar om fiscale redenen hun geldstromen via Luxemburg laten lopen. Een direct gevolg is dat andere landen hierdoor belastinginkomsten mislopen.

Met de belastingovereenkomsten zijn honderden miljarden euro’s aan kapitaalstromen gemoeid. Veelal gaat het om leningen of investeringen die op papier via Luxemburg lopen. Onder de betrokken bedrijven zijn onder meer Ikea, Pepsi, Heinz en Deutsche Bank. Ook Nederlandse bedrijven als ING en kledingbedrijf WE verlaagden hun afdracht met routes die via Luxemburg lopen.

…

Vanmorgen presenteerde de Algemene Rekenkamer een onderzoek naar belastingontwijking in Nederland. Daaruit blijkt dat de hoeveelheid geld die via Nederlandse brievenbusmaatschappijen loopt is verveelvoudigd. Zo stroomde in 2012 bijna 32 miljard euro’s aan royalty’s – vergoedingen voor het gebruik van rechten – in en uit Nederland, het drievoudige van tien jaar geleden. Deze route wordt onder meer gebruikt door Ikea, Google en U2. De Rekenkamer toont zich mild over de status van Nederland als fiscale vluchtheuvel.

Again we see that the elite and their big corporations can avoid paying taxes worldwide through all kinds of loopholes, while the poor and middle class can’t avoid being robbed by governments. As a result, the poor and middle class continue to get poorer, while the rich get richer.

Added on November 9th, 2015 at 12:34 pm

Pingbacks

Karel Donk's Blog » Why the poor get poorer and the rich get richer (10/10/2013)
Karel Donk's Blog » Did Mark Zuckerberg really give $990 million to charity? (19/12/2013)
Karel Donk's Blog » Year in Review 2013 by Bill Gates (27/12/2013)
Karel Donk's Blog » Dropbox moves to Ireland to avoid taxes (03/05/2015)

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