May Day, Tax Day
Senator Bernie Sanders (I, Vermont) made news earlier last month by releasing a list of U.S. mega corporations that paid little or no income taxes this year (at bottom). The list led to protests against G.E. and Verizon, and sparked anger among liberals and conservatives alike.
The story loses a little zip when you consider that almost half of us pay no taxes, and that, further, corporations do pay all manner of taxes and fees, usually to the states and cities where their operations are located.
Still, there is no question that the very rich do not pay their fair share, not mega corporations, and not the super-rich.
Part of the problem is that tax laws are too complicated. General Electric, for example, has a tax department which is staffed with world class tax attorneys and headed by an ex IRS man. Knowing the law, and knowing what to report and how to report it, saves us all money, but not as much money as it saves G.E..
A bigger part of the problem, though, is our cultural beliefs about capital and capitalism which allow laws which provide uneven benefit without complaint. The way we look at wealth in America explains why we should be demonstrating on May Day, not tax day.
Though in the U.S. Labor day is in September, it initially began as May Day. May 1st arose as a celebration of labor in the United States in the 1880s when police fired into a crowd of workers seeking an 8 hour work day at the Haymarket, near the McCormick plant in Chicago. There were demonstrations on May 1st, and 3rd, and at the second protest, police opened fire killing a worker. The next day, despite cold drizzling rain, 2,000 people turned up to protest the police violence of the day before. At some point, the cops decided to move against the protestors, though the protest was peaceful. Someone threw a bomb into the ranks of the police, who opened fire, hitting other policemen as well as protestors. One policeman was killed and several cops and protestors were injured by the bomb, and seven more cops and four workers were killed in the riot, mostly from police fire. Workers were corralled and held, many were beaten, as cops tried to find out who threw the bomb. In the end, seven men were sentenced to death for the bombing, though there was no evidence to tie them to the bomb. They were described as anarchists, and sentenced to death not for something they’d done, but for their beliefs.
The sentencing sparked demonstrations around the country, and the world. May 1st was designated International Workers Day by labor rights groups, in memory of the miscarriage of justice of the Haymarket. In fairness, the condemned men were eventually determined to be innocent, though four were hanged and one killed himself, and the police officer who ordered the crowd fired on was found guilty of inciting the crowd.
Even so, the United States, designated May Day as Loyalty Day in 1958 (happy Loyalty Day; ever hear of it?) and moved Labor Day to a more convenient day, avoiding the history of labor in the U.S. altogether.
What does International Workers Day have to do with corporations that don’t pay taxes? Plenty; the injustices of the Haymarket Massacre and the convictions were hailed by the press of the day as heroic, and the workers were labeled as lazy and greedy. Capitalism was emerging as a powerful new force after the Civil War, and the growth of power among the workers was seen as an impediment. Workers were putting in 10 and 12 hour days, and the idea that they should uniformly be allowed 8 to work, 8 to recreate and 8 to sleep was simply cutting into the corporate profits. Capital, not workers, is responsible for wealth and prosperity.
Most people have a truncated view of the economic system obtained either from high school civics class, a couple of classes in college, or their affiliated political party. In the U.S. the dominant view continues to hold that capital makes all good things possible. Often, a simple, curvilinear graph is used to explain how capital investment creates money. Folk explanations include large capital events which shaped the country: the railroads (a great example of welfare for the rich); the mechanization of agriculture in the South; the automobile, oil industry and the hundreds of thousands of miles of pavement created from oil to accommodate it, and so on. Capitalism means great deeds and great men.
But the economic system is simply a twist in a rapidly global social world. This is not a “complicated” system, meaning composed of linked linear elements, but it is complex, meaning the relationship between the parts is reflexive, with one changing its relationship to another with unknowable consequences. Because it reflects a global social system, we aren’t surprised to learn that the very wealthy of every country have more in common with each other than they do with the poor of their country. One need only look at the recent royal wedding to see that the powerful and wealthy of other nations nearly outnumbered the Brits surrounding the lucky couple, indeed it has only been a few generations that British royalty could speak English.
It isn’t difficult to demonstrate that there is an aristocracy in the U.S. Very few of us have any idea what it is to make $500,000 a day. The aristocracy isn’t founded simply on money, but on social connections. It is true that money is power, but there is much more to being wealthy than simply money. Status implies entitlement, money comes to the wealthy because they have status, because there is a social benefit to knowing them.
This idea of status and entitlement is very powerful, and it transcends cultures and even species. Some of the most seminal work on status and entitlement in social animals was done on zebra finches. That study and others done on wolves and primates and capped by a study of Black soldiers demonstrate that there is a strong genetic component to status, and to the recognition of status. The concept of “relative deprivation” meaning we accept our status based not on that of those above us, but those with whom we see ourselves as peers, explains why we accept less in our lives than the very wealthy, but resent our only slightly more wealthy neighbors.
Add to that genetic propensity to accept one’s place relative to one’s betters the cultural belief that capital drives great progress, and the power money and wealth can purchase towards shaping public opinion, and we begin to understand why the story of the Haymarket Riot features bomb throwing anarchists and culpable policemen, but no capitalists.
It also explains why our wealthiest people and corporations don’t pay their share of taxes, and why we ignore the billions given to corporations in the form of tax breaks and other government derived benefits, but complain bitterly about welfare queens. In our view, the wealthy are somehow deserving of their wealth, it isn’t the result of chance birth and social networks, it’s a matter of merit. The wealthy, we imagine, work social good by becoming wealthy. They turn dirt into steel, and steel into skyscrapers. They take fallow land and turn it into airports and shopping malls. They take idle workers and create jobs. All of these things, we imagine in our culture, are in the greatest social good.
It also explains why, when the working class fears for its jobs, it turns on those with less power to bring change, instead of seeking the problem where it really lies. Hence, Tea Party goes after poor Mexican immigrants and the elderly and poor seeking medical help, instead of insisting the very wealthy pay their fair share of taxes.
We no longer tolerate the kind of worker abuses we once did, but there are still workers who lack the protection of the 8 hour day. Many workers continue to be simply raw energy for their employers, with no benefits and no hope of retirement, spent and discarded. The economic crisis has marginalized even more workers, and many older workers are being forced into retirement. Meanwhile, the wealthy grow more wealthy, as they take advantage of the misery of their unemployed workers and invest in foreclosed housing. Currently in California the majority of single family dwellings are being purchased as investments.
And the rest of us continue to allow a tax system where the most wealthy escape paying taxes but enjoy the benefits of government protections, public founded research, and public funded bailouts. Below is Bernie Sander’s list.
Today, the oil companies are increasing fuel costs even though there is no shortage of crude or of refinery resources. No doubt a crisis is ahead, and some suggest Big Oil is winnowing profits against the day when the crude supply dwindles and our aging refineries shift our priorities for the remaining oil.
Bernie Sanders is calling BS on big oil, HERE.
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) General Electric — Over the past five years, GE made $26 billion in profits in the United States but still 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 — 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, has received a $134 million tax break from the oil and gas manufacturing tax deduction.
7) Goldman Sachs — in 2008 only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion bailout 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) Carnival Cruise Lines — Over the past five years, it made more than $11 billion in profits, but its federal income tax rate during those years was just 1.1 percent.