Quick Takes (v48): The Zero Percenters

Quick Takes

We've been hearing for a long time about the 10%, the 1% and even the .10%. You know, the rich, the richer, and the richest of Americans, the ones with all of the money. The people we love to hate. The millionaires and billionaires, the latter group which That Guy From Vermont says shouldn't even exist.

There are lots of ways to identify who falls into these buckets, as this article shows. I've put two calculations into the table: individual income, as of 2019, and net worth, as of 2016, the most recent data available for this method of calculation.

To be honest, I think many people who express concerns about the 'wealth gap' are in the Top 10% based on income, and some may be there based on net worth as well, who have no idea they've "made it" - which is just one problem we have when talking about all of this income stuff in generalities. 

We also hear a lot -- a LOT -- about corporations that don't pay any taxes, and of course, about their owners or executives. You know - Jeff Bezos. Jeff Bezos. Jeff Bezos. And maybe some other folks, but honestly I'd be hard pressed to name any of them, as would most people. Because, if we were to believe the politicians (you know the ones I'm talking about), Jeff Bezos is the worst person in the entirety of the history of the universe.

But here's the thing: there are LOTS Of corporations that don't pay federal taxes, or that get credits against their federal tax liability, giving them an effective tax rate of zero percent. Not just Amazon - although that's the one about which we hear the most.  There's a list, from CNBC, that came out back in December showing the 91 Fortune 500 companies - 91! - with that coveted 'zero percent or less' effective tax rate.

It includes Amazon, we know, but also companies I'm bucketing as follows:

• energy and natural resources, including American Electric Power, Atmos Energy, Chesapeake Energy, Duke Energy,Edison International, Occidental Petroleum and more; 
• financial services, including Ally Financial, Brighthouse Financial, Hartford Financial Services, Prudential Financial Services, and SPX; 
• food and beverage services, including Aramark, Darden Restaurants, MolsonCoors, and Starbucks;
• automotive, logistics and transportation: FedEx, General Motors, Goodyear Tire and Rubber, Navistar International, Penske Automotive, Ryder Systems, and Trinity Industries;
• travel and tourism: Alaska Air Group, Avis Budget Group, JetBlue Airways, MGM Resorts International;
• media: Netflix, Gannett;
• construction: Beacon Roofing, Builders FirstSource, Mohawk Industries;
• fashion: Levi Strauss, Phillips-Van Heusen, Tapestry;
• health care/pharmaceutical: Eli Lilly, McKesson, Tenet Healthcare;
• long-established companies with familiar names, including  Deere, DowDuPont, Halliburton, Honeywell International, IBM, OwensCorning, PitneyBowes, US Steel, Whirlpool; and
• tech companies: Activision Blizzard, DXC Technology, Nvidia, and Salesforce.com among them.

Note that my bucketing is based on personal knowledge or a quick, 100,000-foot-level Internet search and may not directly match how the company considers itself. I do know that many of these companies (and those from the list that I didn't include above) could be hugely diversified and may defy this kind of general bucketing done by a rank amateur like me, or even by an expert. 

That said, I tried to show the breadth of the issue of companies not paying federal taxes, and to illustrate the dearth of publicity about any of these companies - other than Amazon, of course - from the candidates who are running for president or other elected office.  

I get that we like to put faces and names on political issues - easier for people to understand, to remember, and to attack with anger -- I get it.

But,

• if you're running as the climate change guy, look at all the energy companies on the full list, and tell me why you're not shouting about those companies and telling me what we can do if they only paid taxes; 
• if you're running as the savior of health insurance (or even health care) as we know it, look Eli Lilly and McKesson, and talk to me about what you're going to do to make sure they pay their fair share; and; 
• if you're running as the person who's going to clean up Wall Street (again) and the financial industry (again), why are you not pointing your fingers at the easy, easy targets on this list, and showing us all the things you'll do with all that tax revenue?

And, instead of telling us how you're going to tax the wealthy a lot and tax the middle class not very much,l - understanding that people in that 10% bucket think they are the middle class and think they don't deserve to be taxed any more - why not start telling us how you're going to ensure we get that 21% corporate tax rate from all these companies?

This Stuff Taxes My Brain

My Congressman, Rep. John Katko (NY-24), has said the House tax plan, as it was introduced earlier this month, was a 'starting point for desperately needed action on tax reform' and also offered this:

For thirty years, progressives have demanded exactly what this bill does - easing of the tax burden on low and middle income working families and eliminating loopholes. Anyone who dismisses this bill outright should be prepared to explain this discrepancy, and detail why hardworking Americans should continue to be taxed at excessive rates. No bill is perfect,which is why we need to keep this process moving forward. As this measure moves through the House over the coming weeks, I will continue to consult with individuals, families, small businesses and manufacturers across my district and seek their feedback. As I always have, I will advocate in Congress to ensure that this measure is a net win for Central New York. 

As part of that consultation with constituents, those of us on the Congressman's email list received a survey on tax reform, which I've shared below.

1. When it comes to reforming our tax code, what is most important to you? 

A. Lower tax rates for me and my family

B. Tax incentives for job creation in my community

C. Expansion of the Child Tax Credit

D. Reduce wasteful spending I have to ask why we can't eliminate wasteful spending without having to reform the tax code? If our representatives in Congress, in state government, and in local government can find ways to reduce  wasteful spending, to identify fraud and get that money back,  and stop borrowing money that can never be paid back,that would be a huge accomplishment, one that's much more important to me than getting a tax break.

2. What concerns you most about the U.S. Tax Code as it stands currently? 

A. Taxes are too high for me and my family

B. The current tax code encourages companies to invest their resources outside the US

C. There are not enough tax credits Um none of the above? What concerns me is how many tax credits and write-offs there are, for people and for corporations, how many special provisions there are for industry A and special interest B and family scenario C. These are the kind of things that, for example, allow corporations to earn billions and billions of dollars and pay no federal taxes. There are many examples, more current than this one I wrote about back in 2011. And having companies 'return their profits' to the US doesn't guarantee a single job will be created. It doesn't ensure there will be money invested in manufacturing, in R&D, in workforce training or anything at all that will help my community, or yours. It does ensure that bankers will make money, but even that doesn't necessarily help my community, or yours. It helps bankers.

3. Which answer best represents your viewpoint on addressing our nation’s $20 trillion debt: 

A. We should tax the wealthiest Americans more.

B. We should reduce discretionary spending programs.

C. We should reform mandatory spending programs such as Medicare, Medicaid, SNAP, and unemployment programs.

D. We should reduce our defense spending. This is a great question, but it isn't really about tax reform. My response is two-fold: one, we have to collect the taxes people and corporations owe, and two, we have to spend less money. Defense is an easy target.

4. As I represent you in Congress, what kind of tax reforms would you like to see pass in the House of Representatives? 

A. A tax plan that raises taxes on wealthy individuals and large companies.

B. A tax plan that cuts taxes for low-income and middle class Americans.

C. A tax plan that cuts taxes for everyone, regardless of income.

D. A tax plan that cuts taxes for individuals, but raises taxes on corporations.

Again, my answer seems to be missing:a tax plan that eliminates the loopholes that allow people and corporations to not pay taxes, or to pay less than their fare share. We don't need to raise taxes on anyone, we need to collect what we are owed. 
5.  Do you believe the tax code should be simplified? 

A. Yes, the tax code is over 30 years old, and is outdated, and in need of an upgrade.

B. Yes, taxes should be lowered and loopholes should be closed.

C. No, I believe wealthy individuals and companies should pay more in taxes.

D. No, I am happy with the current tax code. Should the tax code be simplified? Sure. But does simplification mean lower taxes or higher taxes? Not necessarily - it means that the code should be simplified and loopholes should be closed. We may find, once that happens, that the code is sufficient.

6.  Please share any additional concerns in the space provided below.
When I get these surveys, I wish there were answers for me to select.

The Audacity of....

Back in December of 2000 I was one of a couple hundred people who, after reading with dismay that then President-elect George W. Bush had done away with the inaugural poem, entered a contest on Slate.com to write one for him. Alas, I did not win, but was cited for special mention in the subsequent article announcing the winner– truly a proud moment. If you’re interested in a little stroll down memory lane to the days of the Bush campaign, the article is here. (August 2021 note: the folks at Slate are currently searching for a copy of my poem, but offering no promises; I can't find it anywhere.)

I’m not really feeling poetic about Obama– that might have been a one-shot deal prompted by the peculiarly fascinating words and wisdom of “W”. This year, as we approach the inauguration I simply offer the following:

• The audacity of… Norm Coleman to continue chasing his failed dream to be re-elected as US Senator from Minnesota. Realizing that it’s tough to lose a contest to a professional comedian, there comes a point at which all politicians have to let go of their egos and think about the greater good. In this case, someone needs to be representing the Land of 10,000 Lakes. To date, all signs point to Al Franken. So be it, and let’s move on.

• The audacity of… any politician to question whether Hillary can be fair and balanced in representing the interests of the United States simply because of who contributes to her husband’s foundation. I may be naïve, but pretty much every senator is beholden to some special interest or favored constituency - or other member(s) of the Senate - because of contributions, back room deals and handshakes and the innumerable quid pro quos that are the currency of politics in our country. Question her foreign policy experience, her bullet-dodging visits to other countries if you like – and you should – but leave WJC out of it. Get over him, already!

• The audacity of… our Congress to blithely hand over hundreds of billions to their friends in the financial industry apparently without any rules on how the money was to be spent, without oversight, accountability, or concessions. At the same time as our elected officials were demanding wage reductions, car-pooling and commercial flights from auto industry officials, six- and seven-figure bonuses were being handed out in the banking and insurance business. Exorbitant bonuses, zero accountability, and zero oversight for the fat cat financial experts – who, by the way were the ones we would have relied on in the old days to prevent exactly the kind of meltdown we’re in now. Get them back in and put some kind of framework in place, with real consequences for lack of action.

• And finally, the audacity of… the New York Mets and especially the hated New York Yankees, for continuing to belly up to the bar for money and deals for their new stadiums, and for any elected official in any jurisdiction in New York who approved the funds. I typically struggle with tax breaks and government handouts, but in terms of baseball, I prefer the Kevin Costner approach – “if you build it, they will come.” Certainly in New York, with our multi-billion dollar deficit, there must be something else we can do with the $2.1 billion that’s been handed over to these two profitable corporations to build their new ballparks. According to published reports, the Mets have asked for (and gotten) just shy of $700M for their $800M Queens stadium, and the Pinstripe Pansies are at $1.3B for their (you guessed it) $1.3B Bronx playground.

Here’s hoping that Change We Can Believe In truly starts now – at all levels.