Budget wars, activism, uprising, dissent and general rabble-rousing.
Proposed budget cuts have spurred widespread national resistance in the form of protests, and in some cases, hunger strikes. Yesterday, several leaders of progressive organizations, including executives of MoveOn.org, SEIU, the Center for Community Change and ColorOfChange.org, announced that they too will be joining the group of 6,000 participants in a fast to oppose austerity.
In Olympia, rallies and protests scheduled for this weekend are expected to attract thousands of anti-cut union members, students and community organizers. The attendees argue lawmakers should focus on closing corporate tax loopholes, not cutting social services. Among the state’s proposed austerity measures: $15 million in cuts to nursing homes, axing the State Arts Commission, and slashing higher education funds.
Penn State’s Abington campus joined up with Temple University students in a rally to oppose Gov. Tom Corbett’s radical funding cuts for state-supported universities. Corbett has proposed cutting university funding in half, which according to Temple University means yanking $90 million from its budget. Put another way, if this downfall was made up solely by a tuition hike, each in-state student would pay an extra $5,000.
In New Hampshire, thousands of protesters chanted outside the State House on Thursday in opposition to their state’s budget that cuts deeply into social programs and strips unions of their collective bargaining rights. The House reduced spending by a whopping $742 million, while the GOP cut the tobacco tax and changed the taxation of small business profits, a move that could actually strip $100 million from the state over the next two years.
Texans held a daylong vigil outside the state Capitol yesterday in response to the proposed massive budget cuts to healthcare and education that are being called “historic.” The House budget includes a 10 percent reduction in funding for doctors and hospitals that treat children covered by Medicaid, but providers say the budget cuts actually amount to a 30 percent loss since the state will lose billions in federal matching funds.
For a party so ostensibly concerned with death panels and the sanctity of life, the GOP-dominated house shows a shocking lack of concern for the children whose lives depend on Medicaid funding.
“Each day, we see another piece of her die,” [Teresa] Little said, standing by her granddaughter, who sat in a wheelchair. “I was literally sickened when I heard about the proposed health care cuts. We won’t have any health care options left. On behalf of the millions of Texas children on Medicaid, I implore you to please leave our Medicaid alone.”
“Medicaid has meant a lot to our family and taken care of our son,” said Michael Ayala, who traveled from Corpus Christi with his wife. “If they start cutting these programs, it will put a huge hole in our pocket.”
The president and CEO of Texas Hospital Association, Dan Stultz, says the budget cuts will permanently maim rural hospitals, and in order for facilities to remain open, they’ll likely have to stop services that are not as profitable, including ambulances and prenatal care. Stultz stresses that lawmakers are cutting prenatal care for tens of thousands of poor women under this bill.
Author Nicholas Shaxson (Treasure Islands) does not disguise how he feels about the corporate tax haven system. “It is a hugely regressive force,” he says, adding that it takes money and income away from “ordinary people and [gives] it to the wealthiest members of society.”
By some estimates, the United States loses $100 billion every year to foreign tax havens, though Shaxson emphasizes that most people still don’t really grasp the enormity of the problem. When they hear the term “tax havens,” many people envision a handful of billionaires sunning themselves on a remote beach somewhere, martinis in hands. The real problem is actually much larger and closer to home.
There now exists an entire parallel network of business conducted by huge corporations that actually mirrors the behavior of international crime organizations. Over half the world trade is now routed through tax havens. “You have this zone where you have big corporations and criminals rubbing shoulders with each other,” says Shaxson. This system has a double effect, he explains. First, it creates incentives to break the law at a corporate level, but it is also “going to provide huge political cover for the criminals themselves when you get the corporations protecting the tax havens and protecting secrecy.”
And this isn’t just happening on sandy beaches, he explains. “The biggest tax havens are big, rich countries, particularly the United States, the United Kingdom, Switzerland—of course, the Cayman Islands is very big too—but also countries like Ireland and Luxembourg, Luxembourg is absolutely huge. Very few people talk about it when they’re thinking about tax havenry.”
General Electric, which paid no federal income taxes in 2010, even though it raked in $14.2 billion in profits (and another $3.2 billion in tax benefits), is a huge fan of aggressively moving profits offshore to Luxembourg, and also Bermuda and Singapore.
Many people might not realize that the United States itself is a tax haven. Tax havens are basically playgrounds in which the rich and well connected can do whatever they want, and those playgrounds can exist anywhere. “There are all sorts of things that the United States offers; particularly, there are tax exemptions, tax loopholes, that attract a lot of money to the United States,” says Shaxson. “Someone from Latin America can put their money in the US and earn income there tax-free.” The amount of dirty money attracted into the United States has been estimated at $3 trillion.
Several US territories are now engaged in a race to the bottom to see who can provide the most tax loopholes and lowest tax rates to rich people and corporations in order to drum up business and revenue for badly indebted states. Most promise a cloak of secrecy, which is really what big corporations love. They want to know they have the right to operate however they please without meddlesome regulators breathing down their necks. Wyoming, Nevada and Delaware are the leaders in this area, according to Shaxson.
For example, Nevada and Wyoming have no corporate income tax (Delaware charges no income tax on corporations not operating within the state). Zero. If you’re a corporation in Nevada or Wyoming, and an out-of-state corporation looking to do business in Delaware, you get to enjoy all the state-provided services (police protection, public roads to transport your merchandise and employees, etc.) but you don’t have to contribute a penny to the society housing your business.
Tax havens also played a major role in the economic crisis, Shaxson explains. The root of the subprime scandal was Wall Street’s ability to skirt regulations, and corporations were able to do this by partly operating overseas in London (the UK is itself a huge haven) that allowed them to grow offshore at a rapid pace. Meanwhile, the race to chip away at regulations wasn’t only occurring between havens (US and UK) but also between states. The competition resulted in a complete gutting of the regulatory system, and the collapse soon followed.
All the while, corporations bullied and threatened politicians and the public into supporting their dangerous behavior. “You have so often heard ‘Don’t tax us too much. Don’t regulate us too much or we’re going to go off to Switzerland,’” says Shaxson. “This is this kind of competitive threat, and politicians very often give in to these kinds of threats…. This is a competitive race to the bottom with financial deregulation has been a major, major factor in the financial crisis that erupted around 2007, and it’s affected countries all around the world.”
Some of the countries the tax haven scams have damaged are already the most vulnerable societies. In Treasure Islands, Shaxson explains that for every dollar of aid the world spends in developing countries, ten dollars leaves again by the back door.
He’s referencing research done by Global Financial Integrity, a nonprofit research and advocacy organization located in Washington, DC. GFI found that in 2008 the illicit financial flow leaving developing countries reached $1.2 trillion. The donations in foreign aid from all wealthy countries, combined, are $100 billion. This means that the illegal flow of capital from impoverished countries (in which tax havens are a huge factor,) outnumbers the aid coming into these areas by ten to one.
To Shaxson, the tax haven system is about so much more than the specific figures of how much revenue is being lost, though I would argue during a time when poor people are being asked to sacrifice their already meager means, it is also a crucial point. Politicians, including President Obama, have offered only empty rhetoric so far on the issue of tax havens, and while they dally, the two-tier system of taxation, in which poor people pay while lavishly wealthy corporations run off with billions in untaxed profits, continues.
“It is about the degradation of financial regulation,” he says. “It is about the ability of elite, and particularly financial elite, to escape their financial responsibilities to society, and to continue to play this game of heaping the risks on the shoulders of taxpayers, and taking all the rewards for themselves.”
There is a new movement of 4,000 people fasting in order to protest Congressional budget cuts. Mark Bittman, who is ironically a foodie, wrote about the protest in the New York Times. In the article, Bittman explains that the fasting protest is in response to House budget bill H.R. 1, which proposes cuts in WIC, a program that “supports women, infants, and children, [and] international food and health aid (18 million people would be immediately cut off from a much-needed food stream, and 4 million would lose access to malaria medicine.)” Farmers in underdeveloped countries would also be profoundly affected by the cuts.
Domestically, food stamps are also being attacked in the form of the “Welfare Reform 2011” bill, language familiar to anyone who lived through former President Clinton’s Personal Responsibility and Work Opportunity Act, which promised to “end welfare as we know it.” Of course, that didn’t mean alleviating poverty but rather abandoning people in their hours of need. As Bittman points out, these food stamp cuts won’t make a dent in the overall deficit, and could quite literally result in people starving to death.
Other prominent participants include the progressive evangelical leader Jim Wallis and David Beckmann, president of Bread for the World. This week, Wallis, Beckman, and former Democratic congressman Tony Hall asked people to join the movement. Additionally, many religious organizations, including the National Association of Evangelicals and the US Conference of Catholic Bishops, have been vocal critics of the proposed federal budget cuts.
Wallis says that this isn’t really about balancing the budget. If it was, he says, they’d go where the money really is.
“Every day we're spending more in Libya than everything we'd like to keep in the budget. That's turning around the Biblical imperatives and beating your plowshares into swords. You're not going to solve the deficit with these programs. This is just mean. This is not believing the government should help poor people as a principle."
In 2010, about 14 percent of the federal budget went to programs that provide aid to individuals and families. A Center on Budget and Policy Priorities analysis concluded that such programs kept 15 million Americans out of poverty in 2005 and reduced the severity of poverty for another 29 million people. Meanwhile, 20 percent of the budget, or $715 million, went into defense and security in 2010.
But despite the fact that going after food stamps during the worst economic recession since the Great Depression is cruel if not outright insane, the fact that Republicans are yet again gunning for food stamps isn’t surprising.
The GOP has long treated poor people like social pariahs. It was earlier this year that a Kentucky lawmaker suggested welfare recipients be drug tested because, after all, it’s common knowledge that anyone receiving food stamps is on the pipe. Also, drug addicts don’t deserve food.
If that sounds like hyperbole, Orrin Hatch made it perfectly clear this is exactly how Republicans think when he also proposed an amendment that would demand mandatory drug tests for welfare and unemployment beneficiaries.
When the GOP and Blue Dogs can’t rip bread from the arms of poor people, they resort to these kinds of draconian cuts operating under the guise of “reform.”
Bittman writes that in 2010 corporate profits grew at their fastest rates since 1950. Simultaneously, the United States set a record in the number of Americans on food stamps, while the richest 400 Americans amassed more wealth than half of all American households combined. Taken together, these facts point to a rotten, rigged system that needs correcting. Yet thus far, Congressional leaders seem to be willing only to hack away at the meager lifelines of the poor, which will further tilt the system in favor of serving the well-connected and lavishly wealthy.
Jay Espinoza is happy with Denver’s turnout for this past weekend’s US Uncut national day of action. Some people “drove upwards of [an] hour to make it to the protest,” he tells me.
Like the other US Uncut cells, the group presented a fake check for $2.7 billion—in this case to a Wells Fargo bank manager—in order to represent the amount Wells Fargo owes in taxes to the United States. And the story ends as it ended for all the other US Uncut chapters, according to Espinoza. “The manager...told me that they did not care for our cause and we were told to leave.”
This is how US Uncut has chosen to protest the austerity measures handed down from Washington, but the group is not alone in that resistance. As in the UK, students have been a source of thriving activism, a reality that counters the popular narrative that anyone younger than 50 is somehow an apathetic, non-contributing zero.
In California, 15,000 students marched in a rally opposing potential budget cuts. California is facing austerity measures that could result in losses between $750 million and $1 billion.
Today, in New Haven, Connecticut, students from Wilbur Cross High School are planning to stage a protest against budget cuts, which could result in sixty teachers, twenty pre-school teachers and 110 other school staff being laid off.
Across Baltimore County, high school students rallied in Towson on Monday night to oppose cuts that could also result in the loss of teachers. Students there used Facebook to organize and left messages of solidarity on the event page.
“I can’t believe this is happening. I feel like I need to do something,” said student Saskia Matthews.
"What we’re saying is we’re students. Listen to us, we know what we need and what we don’t need."- Saskia Matthews
“We just care about our teachers, and we want a good education,” said student Avery Thomas.
Hundreds of Pennsylvania students voiced their opposition to Governor Corbett’s draconian measures. If Corbett refuses to raise taxes on companies drilling for natural gas, and the state makes up for the cuts by raising education fees, tuition will jump up by a whopping $2,200 next year.
If Corbett’s proposed education cuts become law, Daran Carlin-Weber said he might face a very different future. The 19-year-old sophomore from Sayre, a small town of 5,400 near the New York state line, is studying animation at Edinboro University. He hopes to eventually work for The Cartoon Network.
“If this budget goes through, there’s no way I will be able to afford school,” said Carlin-Weber. “I’ll go home and work at KFC.”
More than 150 students in Michigan hit the streets to protest proposed cuts to higher education. In that state, Gov. Rick Snyder is set to slash university funding by $42 million.
Stefan Johnson, 34, a master's student studying anthropology at MSU, said he feared the proposed cuts would force universities to hike tuition next year.
"It's going to make education more untenable," Johnson said. "It's already too expensive as it is. "
What was described as “throngs” of students descended on Nevada’s capital city to demonstrate against Gov. Brian Sandoval’s cuts. At least 1,500 students, making up “one of the largest rallies in Carson City history,” showed up to demand an end to austerity.
"In my 10 years as a legislator, I've never seen anything like this," Assembly Speaker John Oceguera, D-Las Vegas, told students at a midday rally. "We've made cuts in the past wondering, 'Where are the people?' The apathy is gone."
Students at Arizona universities rallied to oppose $235 million in cuts to their universities’ budgets, and a labor-student coalition in Florida led about 300 protesters through the streets to protest Gov. Scott’s proposal to cut 5 to 10 percent (about $3 billion) from public education.
People often ask me why students in the US haven’t organized a massive resistance like the one we’re witnessing in the UK. My answer to that is there is resistance in this country. It isn’t centralized and overwhelming… yet, but it is most definitely rising to the surface and beginning to spill over.
As promised, the footage from US Uncut’s Saturday protests continues to roll in. I was on Democracy Now! earlier this morning to talk about the domestic protests and also the massive day of action in the UK where half a million people, including participants of UK Uncut, marched in the streets against the British austerity measures. The video of my interview, in addition to the excellent Johann Hari talking about the original UK movement, can be viewed here.
Here’s Boston’s Chris Priest talking about who is actually responsible for the national deficit. He then performs a satirical version of We Didn’t Start The Fire with lyrics tailored to rip into BoA’s dodging practices. A sample:
Wealth didn’t trickle down, everybody’s screwed now
Free ride only for the biggest of the banks
They’ve made it well known, they don’t want to pay for roads
Let me tell ya something bout’ our friends BofA:
Dead beats, tax cheats, Hiding money overseas
Take this piece of shit loan, rate it “triple A” please
Tape off Wall Street, “white collar crime scene”
Shut down, marked “Out of business temporarily”
“[Bank of America] pays less in taxes than you do, and that’s not cool.”
Arizona, Seattle, Boston, Ohio, Philadelphia and Cranberry Twp., Pennsylvania chapters also posted photos. Here’s a US Uncut activist from Wisconsin explaining why he wants Verizon, and all wealthy corporations, to pay their fair share.
San Francisco’s chapter has posted photos and video of the protest on their Facebook page. Organizer Leslie Dreyer called the event “another successful and moving day of action.” She stresses the participants’ diverse range of ages (4-70), ethnicities and backgrounds.
Corporate tax dodging has proven to be an incredibly unifying issue, one that actually unites Republicans, Independents and Democrats. Even papa bear Bill O’Reilly recently teed off on GE, which didn’t pay any taxes in 2010 despite making a whopping $14 billion in profits. When was the last time O’Reilly and Progressive agreed on, well, anything?
Chicago’s William T. Shehan IV, a US Army veteran, explained that he feels it’s his duty to protest this practice of corporate tax evasion. “As a Veteran I swore to defend the Constitution against all enemies, foreign and domestic,” Shehan’s written statement says. “The behavior of the corporations and elected officials has made it necessary for ‘We the People’ to alter or abolish our relationship with the aforementioned organizations, replace the elected officials, repeal unjust laws and to put in place safeguards to insure a secure future.”
Video and photos from US Uncut’s forty nationwide protests are beginning to come in. Perhaps the liveliest chapter is US Uncut DC, whose 100+ members shut down a Bank of America branch on Saturday. Reportedly, the bank managers pulled a fire alarm as action began at the protest. This is not the first time the franchise has successfully shut down BoA’s operations.
Other states decided to target different corporate tax dodgers. In 2009 and 2010, Verizon reported $24.2 billion in pretax income, but the company hasn’t paid a penny in taxes on that revenue, so in Ohio members of the “Citizens’ Revenue Service” went to a local Verizon store in order to collect the taxes on behalf of the American people.
More videos and photos from Chicago (where a protester alleges BoA told her she could not close down her account ‘because she’s a protester’), Wisconsin, New Jersey and Michigan have also been posted on the US Uncut website, Youtube and Twitter.
Still, there are other protests that haven’t publicly posted photos or videos yet. In Boston, protesters performed street theater, including a sketch with music that was written about billionaires vs. citizens, of course with the citizens winning in the end. In Tennessee, activists gathered to ask why BoA pays less in taxes than an average American household, and I attended US Uncut NYC’s protest, where I witnessed a police officer shove a completely peaceful activist inside a Bank of America.
Several branches that held protests and haven’t had the opportunity to upload video and photos yet have contacted me, so I’ll be updating the blog throughout the week with those events.
Today marked US Uncut’s second big nationwide protest. From coast-to-coast, more than forty cities joined in a day of action protesting the tax-dodging practices of massive corporations that they see as the real source of the country’s deficit.
“I’m tired of people calling for shared sacrifice and it’s all coming from the workers and nothing’s coming from the top,” says protester Dave Sonenberg. “I’m sick of companies like Bank of America not paying their taxes.”
Bank of America hasn’t paid a nickel in federal income taxes for the past two years, and in fact raked in an additional $1 billion in tax “benefits.” The bank is enjoying these profits after accepting $45 billion from taxpayers, which the company then got to count as a deduction when they paid back the money.
Big corporations get to play by a whole different set of rules, says tax expert Bob Willens of New York-based Robert Willens LLC:
It's also not unusual for a company to pay no federal taxes, while still paying state and local taxes, Willens said. Items that can be deducted for federal purposes aren't always deductible for state and local returns, he said. State taxes can also be based on the amount of capital deployed in a state, not pre-tax income.
This is why two-thirds of corporations in America pay no federal income taxes. If they were forced to, we're told, the whole country would suffer. Jobs would be lost, salaries slashed. Thank heavens we’ve avoided such calamity by allowing corporations to shape legislation in their favor.
In 2010, Bank of America handed out $2.2 million in campaign contributions to Congressional representatives and PACs (36 percent went to Democrats, 64 percent to Republicans). By throwing around that much cash, huge companies like BoA have a big say when it comes to crafting legislation that permits them to escape paying taxes, according to US Uncut organizer J.A. Myerson.
“The reason it’s not illegal is because they have bought and paid for the people who make the laws. The laws are made to accommodate this sort of nefariousness,” he says, adding that the process is wrong, and ordinarily that would mean approaching Congress to ask them to fix it, but there’s no point in attempting that when the system is so heavily rigged in favor of the rich and well connected. “So what US Uncut is doing right now is not Capitol Hill lobbying because that doesn’t seem like it’s a fruitful avenue. It’s trying to directly undermine the ability of Bank of America to earn record windfall profits by depleting the public trust that they are an upstanding member of society.”
The rigged game has left citizens feeling burnt and angry. An activist named Sally says BoA’s practice of evicting people from their homes without the original mortgage notes is illegal, but that “illegal doesn’t seem to matter.”
Organizers created fake checks that represent what Bank of America should have paid in taxes during 2009 ($1.5 billion). The plan was to go into BoA, attempt to cash the checks, and then ask for a manager when the understandably flummoxed teller didn’t know what to do. US Uncut planners reminded the protesters to be courteous to everyone: the tellers, the manager and police. The process appeared to go on without a hitch until my cameraman and I went into BoA with US Uncut organizer Duncan Meisel.
The bank’s manager recognized Meisel from being part of the Uncut protests and immediately asked for the police to remove us. Meisel said he was in the bank to cash the check, and when the officer discerned it was fake (because it looks incredibly fake), he told us to leave, claiming we were giving the tellers “a hard time” before.
“Get out,” the cop ordered. “You want to get out or get a criminal summons?” At which point, my cameraman, Zach Roberts, stated he was a Bank of America customer, a credential that didn’t appear to impress the officer at all.
“You want to play games?” he asked. “Give me your ID.” Meisel stated that he intended to leave, but he also produced his wallet and extended it to the officer, who grabbed it and shoved Meisel backwards.
The police then detained Meisel inside BoA before ultimately giving him a ticket for disorderly conduct. Afterwards, Meisel harbored no ill feelings toward the officer. “It sounds like he had a bad day today, but it’s not anything personal. I know cops have it bad these days because there’s budget cuts coming from them. There’s budget cuts coming from everybody. I’d rather not have a summons, but I don’t hold it against anyone.”
The US Uncut community is buzzing in anticipation of Saturday’s big national day of action. Around forty cities are signed up at the official website, and several of the organizers contacted me to offer a preview for what they’re planning this weekend.
For Justin Wedes, a representative from the New York chapter, the overall message of the day will be about reframing the debate about the recession. “Don't cut federal and state budgets that pay for firefighters, cops, teachers and other important services when large corporations are evading their taxes. In other words, we don't have a budget problem. We have a revenue problem,” he says.
Part of the revenue problem stems from America's growing class divide. For example, just 400 Americans have more wealth than half of all Americans combined. As Michael Moore pointed out in a recent speech, many of these lavishly rich individuals benefited directly from the bailout, and many also exploit America's current two-tier economic system in which average citizens are asked to pay taxes while corporations abscond with billions of dollars that could save public jobs and repair infrastructure. The entire crooked system is economic treason.
Saturday will be about raising the profile of the group and also about bringing awareness of America’s revenue problem to the very people being asked to sacrifice their already meagre services. “Manhattan alone has [more than] 150 Bank of America branches,” Wedes says. “Where better to start to raise some awareness?”
The DC team told me they’re unconcerned with specific turnout numbers as long as those who do show up are ready to take meaningful action. “If we can shut down or disrupt the business of corporate tax evaders with continuous creative non-violent direct actions, we do not care if one thousand people are involved or five people,” according to a statement from their chapter.
In DC, they’re encouraging decentralized local planning with a goal of eventually being able to “stage multiple locally led demonstrations all across the city on a regular basis.” As in New York, their target will be Bank of America.
Leslie Dreyer from the San Francisco chapter sent me the branch’s action guide that details what’s planned for Saturday, and without going into specific details, also adheres to the plan of “occupy and disrupt” services within Bank of America.
The protest in Ohio will look a little different since Bank of America doesn’t have branches in the state (there are ATMs, but no banking centers). Representative Alec Johnson tells me the group will be focusing on Verizon instead. “What really grabbed me was learning that they were able to avoid taxes through an alliance with UK's Vodaphone,” says Johnson. Vodafone is another tax dodger that has been the target of UK Uncut since its inception. Johnson was thrilled with the unifying connection. “It was like Christmas in March,” he says.
As for the mission, Johnson reiterates what I’m hearing from all chapters of US Uncut. This movement, including the actions Saturday, will be about emphasizing that America has lots of money, but it’s simply going into the coffers of a very small number of ruling elites who are refusing to give back to the society that facilitated their wealth. US Uncut hopes to unite working Americans currently tearing at one another’s throats over the crumbs left behind by a callous plutocracy, according to Johnson.
"We insist on shifting the frame from Workers vs. Taxpayers to Honest Tax-Paying Americans vs. Wall Street Fraudsters and Corporate Tax Cheats,” he says.
The founder of US Uncut is ready to take the movement to the next level. Carl Gibson tells me he wants to help shape a simple piece of legislation to end overseas tax havens. Of course, his would not be the first attempt made at such an endeavor. In 2008, Carl Levin crafted the Stop Tax Haven Abuse Act, legislation then-Senator Obama threw his support behind, and which has, like most bills that make sense, been floating in purgatory ever since.
Reportedly, Senator Levin’s chief investigator, Bob Roach, will present updates on the status of STHA during a session called “US Congressional Offshore Initiatives" at the 9th Annual OffshoreAlert Conference in—why not?—South Beach, Florida April 4-6.
But in the meantime, Gibson, working in concert with the Roosevelt Institute’s Cornell chapter, is drafting a streamlined version of an anti–tax haven bill focusing on a clear message. “Mainly, that we’re losing out on upwards of $100 billion every year in lost revenue because of corporate tax dodging and overseas tax havens,” he says.
He hopes to have the bill ready by Tax Day [April 18 this year]. “This will be legislation that makes it illegal for corporations to move income earned within the United States offshore through corporate tax loopholes, so it would close loopholes and it would also force these companies who already have billions overseas to bring that money back to the United States and pay taxes on it.”
I bring up the UK’s attempt at a "super law" to close all tax loopholes. The General Anti-Avoidance Rule (GAAR) would ban the exploitation of any tax loophole, legislation that would be quite the stick in the craw for teams of corporate lawyers charged with the full-time endeavor of scouring laws to help big businesses avoid paying their fair share in taxes. The UK government is still considering the rule, complete with a provision that might guarantee non-prosecution for full disclosure. It’s unclear how aggressive the final law would be, considering the UK government estimates it would generate about £1 billion in extra revenue each year, yet Tax Research UK reports that corporate tax-dodging bleeds £16 billion (PDF) per annum from the country.
I ask Gibson if he’s considered adding such a general loophole ban to his legislation. “That would be ideal,” he says, “especially Bank of America, who has 115 oversees subsidiaries. They’ve got more money and lawyers than God. Those guys are really good at what they do, so I’m sure they can probably find future loopholes.”
He’s under no illusions that this will be a smooth journey. “I know that legislation changing the tax code is never going to be passed through easily, but I think if you narrow it down to a narrower focus where it only affects multibillion-dollar, faceless corporations who are clearly evading taxes, I think that could be something that—if not something both parties can agree on—certainly one party will find very, very hard to fight.”
He hopes to partner with Senator Levin, or Senator Bernie Sanders in the future to help give the legislation some momentum. “Of course, I’ll reach out to my senators here in Mississippi, Roger Wicker and Thad Cochran. They’re always talking about ways to save money, and I think this would be a great solution that all of us could agree on. I’m going to reach out to both parties. We’ll see what happens.”
In addition to the excitement over the bill, Gibson is giddy about US Uncut’s national day of action on Saturday. He tells me about the group’s plans for protests, which include dressing up as Verizon employees and ambushing customers with facts about the company’s tax-dodging practices, and Gibson dressing in a suit and tie and presenting himself to the store’s managers as a representative of the Citizens Revenue Service. “I noticed that Verizon hasn’t paid taxes on $2.4 billion in income for the past few years,” he’ll say, “so I’m just here to collect that tax.”
As the manager figures out what to do with him, the other Mississippi activists, dressed as Verizon employees—complete with nametags—will interact with customers. “We’ll walk up and say, ‘Hi, can I help you?’ If a customer asks us about a phone or something, we’ll say, ‘We’ll get to that, but by the way, did you know if we paid taxes then we wouldn’t have to cut your Pell Grants or job training?’”
The conversation turns to the Verizon-Vodafone connection. The reason Verizon is able to successfully dodge paying its taxes is because the company redirects its profits to its foreign wireless partner, Vodafone, which is itself an enormous tax-dodger. As such, Verizon is a key target for US Uncut, while Vodafone is UK Uncut’s objective.
“What I’m going to do before Saturday is get up with the UK Uncut people again, probably have a few chat sessions...and pick their brains about what worked [during the protests], and mention that we’ll be targeting Verizon if they want to target Vodafone,” he says, emphasizing his admiration for the original Uncut protesters. “I’m always looking forward to working with them. They really know what’s up.”
Gibson stresses that the Uncut movement is now a global endeavor. “We’re acting in accordance with UK Uncut, France, Switzerland, Sudan, Canada, Ireland, the Netherlands, Mexico, Australia, Uncut chapters all over the globe.”
Carl laughs at my incredulousness. “Yeah! There’s a Sudan Uncut, believe it or not.” He tells me they even have a Twitter account (@sudanuncut).
Clearly, regardless of nationality, the issue of tax-dodging unifies citizens who bear the brunt of corporate exploitation.
On March 26, US Uncut has protests planned across the country in almost forty different cities, including cosmopolitan hotspots like New York, Atlanta, Chicago, Los Angeles and San Francisco, and also smaller rural areas in Ohio, Pennsylvania and upstate New York.
Though many Uncut chapters still appear to remain focused on Bank of America, some franchises have set their sights on other banks, such as Uncut Wisconsin, which has made M&I Bank its local target.
Many Wisconsin citizens are pulling their money out of M&I following the revelation that the bank has been helping Governor Scott Walker in his crusade against public employees. In fact, the bundled contributions from M&I executives were Walker’s second-largest source of campaign funds.
The same executives who were stuffing Walker’s coffers with cash in order to help him fight union’s rights to collectively bargain are the cretins running “one of the most conspicuous dumping sites for toxic financial waste in the country.” Bloomberg News quoted one former regulator saying M&I’s nonperforming loan figures were “off the charts.”
Still, other chapters will remain fixated upon Uncut’s original target: Bank of America. For Seattle’s Karen Pooley, this is a personal battle. “I am fighting BOA in court. They are illegally trying to take my home. There isn’t a clear chain of title for them to do so, as they were never given proper authority in assignments to foreclose,” she says.
Pooley is especially upset with Bank of America’s use of robo-signing, the unethical practice whereby extremely unqualified “robo signers” verified mortgage foreclosures when notaries and other supposed witnesses were not present to monitor the procedure. She finds it incredibly frustrating that Bank of America first engaged in risky behavior, then came crawling to taxpayers for a bailout when their scheme backfired (but only after they raked in billions), and then turned around and started evicting people illegally, all while benefiting enormously from a rigged tax system. “I am one angry taxpayer,” says Pooley, “And not one bank executive has gone to prison…. this makes me angrier than these assholes not paying their taxes. I want execs to go to jail.”
Angelo Mozilo, the former chairman of the board and chief executive officer at Countrywide Financial (now Bank of America Home Loans), also inspires a sense of loathing in Pooley. “[He] took a plea and paid $67 million!” (Mozilo also agreed to a lifetime ban on serving as an officer or director of any public company.) “If this is not an admission of guilt, I am a unicorn.”
It’s the two-tier justice system that really outrages her. She sees hard-working Americans like herself losing their homes in a rigged game while ludicrously wealthy executives, who are the ones engaged in the real risky business, walk away from their fiery trainwrecks with golden parachutes. “There are two Americas,” she says, “and this is not okay.”
For the full list of US Uncut March 26 day of action locations, visit usuncut.org.