By David Cay Johnston
The views expressed are his own.
Some of the biggest companies in the United States have been firing workers and in some cases lobbying for rules that depress wages at the very time that jobs are needed, pay is low, and the federal budget suffers from a lack of revenue.
Last month Citizens for Tax Justice and an affiliate issued “Corporate Taxpayers and Corporate Tax Dodgers 2008-10″. It showed that 30 brand-name companies paid a federal income tax rate of minus 6.7 percent on $160 billion of profit from 2008 through 2010 compared to a going corporate tax rate of 35 percent. All but one of those 30 companies reported lobbying expenses in Washington.
Another report, by Public Campaign, shows that 29 of those companies spent nearly half a billion dollars over those three years lobbying in Washington for laws and rules that favor their interests. Only Atmos Energy, the 30th company, reported no lobbying.
Public Campaign replaced Atmos with Federal Express, the package delivery company that paid a smidgen of tax — $37 million, or less than one percent of the $4.2 billion in profit it reported in 2008 through 2010.
For the amount spent lobbying, the companies could have hired 3,100 people at $50,000 for wages and benefits to do productive work.
The report – “For Hire: Lobbyists or the 99 percent” – says that while shedding jobs, the 30 companies are “spending millions of dollars on Washington lobbyists to stave off higher taxes or regulations.”
These and other companies have access to lawmakers and regulators that are unavailable to ordinary Americans.
CALL CONGRESS
Doubt that? Dial the Capitol switchboard at 1 (202) 224-3121, ask for your representative’s office and request a five-minute audience, in person, at the lawmaker’s convenience back in the home district.
In more than a decade of lectures recommending this, I have yet to have a single person email me (see address to the right) about having scored a private meeting with the representative called.
Corporations have vast resources to pour into ensuring access — resources that expand when little or no taxes are paid on profits thanks to rules they previously lobbied into law.
Companies form nonprofit trade associations, hire former lawmakers and agency staffers, and have jobs to dole out to lawmakers after they leave office and to friends and family while they’re in office. Thanks to the Supreme Court’s Citizens United decision, corporations can now pour unlimited sums into influencing elections. So can unions, but they are financial pipsqueaks compared to companies.
Then there are political action committees, or PACs, to finance campaigns as well as donations by executives and major shareholders.
Combine all this and you have a powerful formula for making rules that favor corporate interests over human interests, something that the framers of the U.S. Constitution understood more than two centuries ago.
James Madison wrote disapprovingly in 1792 of “a government operating by corrupt influence, substituting the motive of private interest in place of public duty” where eventually “the terror of the sword, may support a real domination of the few, under an apparent liberty of the many.”
FEARS COME TRUE
The late U.S. president’s fears have come to life. For swords, just substitute police with rubber bullets, batons and pepper spray at Occupy demonstrations, including perfectly peaceful ones.
Company reports to shareholders show that among the 30 companies in the Public Campaign report, the 10 firms that spent the most on lobbying during the same three-year period fired more than 93,000 American workers.
Those firings took place in an economy that had five million fewer people with any work in 2010 than in 2008.
All those firings mean higher costs to taxpayers to support those unable to find work, including the more than 4.2 million Americans who are now persevering by applying for jobs after more than a year. Millions more have given up and are no longer counted among the unemployed.
Federal Express spent $25 million lobbying to protect a rule that makes it virtually impossible for its express delivery workers to unionize. That’s 67 percent of what it paid in taxes.
FedEx says it was “educating lawmakers” about a proposal “that would cripple competition in the express delivery industry and hinder our nation’s future economic success.”
The Teamsters, who represent drivers at United Parcel Service, say FedEx was protecting a special interest rule that shorts workers. UPS pays its unionized drivers 53 percent to 104 percent more per hour than FedEx does.
The United States already ranks second among modern nations, just behind South Korea, in the share of its workers in low-wage jobs while too many companies lobby for ever lower taxes, ever smaller wages and ever fewer worker rights to protect the mighty torrents of greenbacks flowing into their coffers. A better balance would make America better off.
PHOTO: Occupy DC movement protesters rally outside the U.S. Capitol in Washington December 8, 2011. REUTERS/Yuri Gripas
In my opinion, corporations are the lazy ones. It is easy to fire people and use lobbyist to ensure more profits at the expense of employees. It takes diligent work and skill to keep those same workers employed and streamline processes and create new products or services and find new markets to enlarge profits. CEO’s are too lazy to do the latter.
I think our government and many Corporations have lost their way in seeking profits rather than being a service to people and to the country. This is an unsustainable prosition and can only end in failure of the corporations and of the form or government that we have now. Anyone who cannot see this has but to step back for a larger view. Wall Streets part in this is the quarterly profit thing. Corporations and good citizens are not built in 3 months.
How about GE, who needs Congress just go to the White House direct….. No Money Needed… OH thats right put money into reelection a lot cheaper.
Those “police with rubber bullets, batons and pepper spray at Occupy demonstrations…” were there on behalf of “we, the people” who OBJECT to the seizure of public facilities from the GENERAL public by “petitioners” who, over months, come up with NO “petitions” yet create additional and ongoing government costs that Taxpayers must pay. In history a siege is NOT considered a “peaceful act”.
Do you really believe that those “… 93,000 American workers…” fired by those 10 firms were employees doing a job that could not be done for less? They might not have been fired had they had union representation, but when a union forces an employer to retain workers not required by the work load and/or at a rate in excess of their economic contribution to the employer’s “bottom line” there is a term applicable. It’s “featherbedding”, it’s expensive, and customers pay more for whatever such companies make.
You could also have said, with equal accuracy, that Federal Express spent $25 million lobbying to keep union interests from changing a rule to make it easier for its express delivery workers to unionize. There is no relevance of that $25 million to Fed Ex’s tax owed or paid. You compare apples and oranges.
It’s obvious that if FedEx paid unionized drivers 53% to 104% more that citizens would see a significant increase in the already high costs of shipping things under a rule that benefits consumers.
I take personal exception to socialists who would have special interest rules to unionize more and more services of skill levels anyone can learn quickly. That raises the cost of living to many more than individually benefit, and it WOULD “…hinder our nation's future economic success."
Union interests that exist solely through a labor surcharge on every American should be routinely and resoundingly rejected at the polls every time possible by free Americans. The alternative is to be less free. Yes, there are two sides of every coin; but you sure called this one wrong.
it is very clear what is taking place in the u.s. and abroad. however every since monarchy’s and such became the business, human trafficing and slavery have always been the normal practice. the angel speaking to moses, told moses to take off his sandals,for he was standing on holy ground. try to find that holy ground today, you will find governments and other entities safe gaurding it from the average indiviual. herod was searching for the baby jesus to take his life. when herod could not find the baby jesus, he ordered a proclamation, to take the lives of all babies up to a certain age. if the government stifles a baby,:academically,economically,mentally ,spritually,emotionally,and pyschically. the baby does not need to suffer a physically mortal wound. as it has already been rendered ineffective in and of their own means. yet not destroyed enough not to serve the king/government.in england the first lady is the queen.in the u.s., if the presidents wife is titled as the first lady,and she is. then it stands to reason the president must have an equivalent title, the first man, hence the king. which would in and of itself make the government an accounting firm or majordomo of the one percent around the world.
@fiigtree1,
You claim “it is very clear what is taking place in the u.s…human trafficing (sic) and slavery have always been the normal practice.” You can’t be serious.
“holy ground”? Find Moses and any angel and just ask.
“…governments and other entities safe gaurding (sic)…” public property and private property from trespassers and squatters is government’s JOB! Since you obviously don’t know, trespassers and squatters are NOT the American “average indiviual (sic)”).
You say: “if the government stifles a baby,:academically, economically,mentally,spritually,emotion ally,and pyschically (sic). the baby does (fawns?) not need to suffer a physically (?) mortal wound. as it has already been rendered ineffective in and of their own means.”
You didn’t get much of that spelling and punctuation stuff in school, did you? Take it from me if you hack up paragraphs into coherent sentences and quit sprinkling periods everywhere it may be possible for others to figure out what you’re trying to say.
So you think the President and the First Lady should be accountable only to that mythical “one percent”? I guess that makes you wrong on just about everything, but you earn points for consistency.
Beautiful !
Now I know why ordinary Americans get a 2% raise, while CEO’s make 40% year over year making the transition where in the 70′s CEO pay was 30 times entry level and now it is more than 300 times entry level.
Good article. Shows exactly where the priorities of the big corporations are: screw the US and head over to their darlings in Asia. I think we should show them the door.
Good read David, thank you. It always amazes me that ground level employees of large corporations are so often treated as an expendable element. No security, no acknowledgement of value, and no respect.
It’s a horrible business model, ethically and economically. Management by terror generates fear and loathing from the front line troops representing the company to the public. It also invites marginal performance, absenteeism, hidden retaliation, and theft.
Read Full Article »