As the average American hustled off to the post office yesterday – the deadline for mailing federal income taxes was midnight – activists gathered in downtown Baltimore to remind them that many American corporations are able to avoid those pesky payments by hiding income in offshore tax havens.
“Those people up there at Bank of America are laughing at us because we pay taxes,” said Charles Schafer, a spokesman for MoveOn.org’s Baltimore Council, speaking to a crowd of about 40.
The protesters were positioned on Light Street, across from the bank’s downtown Baltimore building. The Charlotte, N.C.-based company, which has not had federal income tax expenses for the second year in a row, is “a tax dodger,” according to MoveOn and the Maryland Public Interest Research Group, which had assembled a crowd bristling with signs that read, “Make Deadbeat Corporations Pay!” and “Are You Tired of Being Trickled On?”
“We want them to pay their fair share,” said Shafer, before a few members of the group went into the building to try and drop off a “tax bill” for what they figure the bank owes taxpayers: $3.95 billion.
“And we want our representatives to stop writing loopholes for the wealthy,” Shafer said.
A spokesman for Bank of America has answered the charges being leveled by Move.On, which has staged protests at branches across the country and showed up uninvited at the company’s investor conference in New York last month.
“Bank of America takes its role as a corporate citizen very seriously and pays taxes in accordance with all applicable laws and regulations,” bank spokesman Jerry Dubrowski told The Charlotte Observer.
The bank says the reason it has paid no income taxes is simple: corporations pay taxes on their profits, and troubled Bank of America posted a pre-tax loss of $5.4 billion in the U.S. in 2010.
Maryland PIRG and MoveOn pointed to a PIRG report, “Tax Shell Game,” which they said shows “how an unbalanced tax code allows many major corporations to avoid billions in taxes by stashing huge amounts of profits in offshore tax havens.”
Bank of America, for example, has more than 100 offshore tax havens, according to PIRG.
In the Cayman Islands alone, more than 18,000 U.S. corporations maintain tax havens.
See video of protest by Baltimore photographer and videographer William Hughes.
Taxes avoided by corporations are essentially extra taxes imposed on individuals, argued Joanna Neumann, state director of Maryland PIRG.
“The weight of corporate tax dodgers is putting the burden on the rest of us and that’s not fair,” Neumann said.
According to the report, the average Maryland taxpayer pays an additional $472 to compensate for the income lost to tax havens.
Among the other corporations mentioned in the report was General Electric, which it said “appears to have paid no federal income taxes in 2010, despite reporting profits of $5.1 billion.”
The Baltimore protest was part of a nationwide Tax Day campaign called “Make Them Pay.” Similar events were scheduled to take place all over the country yesterday, targeting other large corporations for their use of loopholes to avoid paying taxes: “The Deadbeat Dozen”— GE, Bank of America, Google, BP, Amazon, Wells Fargo, Citigroup, Boeing, ExxonMobil, FedEx, Goldman Sachs and Chase.
Former New York Times reporter on tax inequities
Taxpayers who want to learn more on this subject should check out the piece in the current Baltimore City Paper by former New York Times reporter David Cay Johnston: “Let Us Count the Ways: nine reasons the rich get richer thanks to U.S. tax policy. ”
Here’s a link to the full version of the story, commissioned by the Association of Alternative Newsweeklies and run in a number of them across the country.
Some tidbits from the boiled-down version in CP:
* John Paulson, the most successful hedge fund manager of all, bet against the mortgage market one year and then bet with Glenn Beck in the gold market the next. Paulson made himself $9 billion in fees in just two years. His current tax bill on that $9 billion? Zero. Congress lets hedge fund managers earn all they can now and pay their taxes years from now.
* Frank and Jamie McCourt, who own the Los Angeles Dodgers, have not paid any income taxes since at least 2004, their divorce case revealed. Yet they spent $45 million one year alone. How? They just borrowed against Dodger ticket revenue and other assets. To the IRS, they look like paupers.
* Rich got richer. Since 1980, when President Reagan won election by promising prosperity through tax cuts, the average income of the bottom 90 percent of Americans has increased a meager $303, or 1 percent. Put another way, each dollar people in the vast majority made in 1980 became $1.01 by 2008. Those at the top did much better. The top 1 percent’s average yearly income more than doubled to $1.1 million.