EASTSIDER-When we think of the giant Tech companies that own Silicon Valley (and most of San Francisco as well), we usually think about our cool iPhones and tablets, apps and computers, and how wonderful all these electronic goodies have made our lives.
What we don’t think about (because we don’t know) is the fact that these Silicon Valley giants are among the biggest tax evaders in the United States. And what’s really a shame is that all this money isn’t even being hidden in foreign countries.
That’s right, the actual “offshore” money is being used to buy up our own country! As in treasuries, bonds and stocks. As Wolf Richter writes in his NakedCapitalism article, here’s how they do it:
“It is registered in accounts overseas, for example in Ireland, but is then invested in whatever assets the company chooses to invest it in, including in US Treasuries, US corporate bonds, US stocks, and other US-based investments. This was revealed to the public during the Senate subcommittee investigation and hearings in March 2013 that exposed where Apple’s profits that were officially parked “overseas” actually end up.”
This is a fix, pure and simple. A legal fiction. First, the financial services industry buys the politicians and the regulatory staff at places like the Federal Reserve, the SEC and the Justice Department, to achieve their loopholes. Then they use these newly created “legal” rules to hide money in “foreign countries.” The technical term is “inversions,” a particularly disingenuous way to avoid it what it really is: A scam.
So when you hear about nice, new, cool, wonderful techie firms like Apple, Google, Cisco Systems, Oracle, Microsoft and IBM, be aware that they are all in the top tier of corporations beating us out of tax revenues – so much so, that the rest of us wind up having to pay more. Not cool.
And just to add fuel to the fire, a lot of these companies, including Seagate, pay no taxes at all!
How This Impacts You and Me
These underhanded shenanigans have two direct impacts on the rest of here in California, not to mention other states and the federal government. First, we’re talking about gazillions of dollars in California and Federal tax revenues that are being sucked out of the system so that the rest of us get hit harder. In last week’s “Woah! Enough With the Tax Increases” article, I pointed out that you and I keep getting taxed more and more and more. Well, if these corporate giants were paying their fair share of taxes like we’re forced to do, there would not be such a big need for regular people to pony up extra bucks just to cover the share of these companies. Of course, unlike big companies, you and I can’t buy the politicians to get access to the underhanded deals.
The second direct impact on us has to do with how the uber rich employees of these tech companies spend their very high incomes. If you think about it, it’s the Tech industry companies who are driving housing prices and rents through the roof in the Bay area, as well as in parts of Los Angeles, Santa Monica, Playa del Rey, and others. NOT NICE!
The death of affordable housing is happening at the hands of a different nouveau riche class -- shades of a new Gilded Age.
And on Top of This, You and I Are Not Doing So Hot
As Deidre Fulton noted recently in CityWatch, 6 in 10 Americans are living on the financial edge.
Even more revealing, in the AP story she links to her piece. Two-thirds of us couldn’t come up with a thousand bucks cash if we had to -- as in paying for an emergency. This is sad, not to mention frightening.
And if that’s not enough, a recent report by the Federal Government’s own GAO (Government Accounting Office) demonstrated that if you happen to be black, your pensions tanked on the order of 47% between 2007 and 2013. What’s even more telling is that this didn’t happen for white workers. Holy moly!
Just to finish the thought, it has started to occur even to the brain trust at the New York Federal Reserve that we are all in deep you-know-what.
In case you think these are the demented ramblings of a gonzo journalist, check this out: The Federal Reserve Bank -- you know, the folks we see on TV that are giving the big banks 0% interest rates while the rest of us can’t even get a loan, period -- has entered into a contract with the crooks at JP Morgan Chase to be the financial custodian for all the toxic mortgage backed securities that they bought up in our name.
So in a nutshell, the Investment houses like JP Morgan crash our economy in 2008 with fraudulent mortgage backed securities (or CDO’s), then they get the Fed to declare them banks so that we, the taxpayers, are on the hook for their deeds, then the Federal Reserve buys up all this toxic waste under their “Quantitative Easing” policy, and finally, to add insult to injury, they hire the crooks that created the mess to guard our “taxpayer assets”!
With no shame at all, our Silicon Valley tech giants and other major corporations engage in ‘legal fiction’ tax evasion, as they buy up the politicians to make it so. First they exported the jobs, now they’re exporting their money, even as they turn around and buy up the US economy with the laundered proceeds.
If you are feeling stressed, can’t hardly make ends meet, and think you are being sold out by your government, guess what? You are. And just to add insult to injury, it turns out that in California, our much ballyhooed wonderful Silicon Valley tech giants are right in the pig trough selling us out! Arrgh! Pick a party -- no joy.
”...if the honest voter cared no more for his party than
the politician and the grafter, then the honest vote would
govern, and that would be bad -- for graft. It is idiotic,
this devotion to a machine that is used to take our
sovereignty from us.”
-- Lincoln Steffens (1903)
(Tony Butka is an Eastside community activist, who has served on a neighborhood council, has a background in government and is a contributor to CityWatch.) Edited for CityWatch by Linda Abrams.