The 99%: "We're Not Broke"
This is my third and final piece from the Sundance Film Festival, and I wanted to note that— coincidentally—each of the films I've discussed have been make by women filmmakers. So, if you need an antidote to the all-white-men Oscar nomination slate, please read up!
We hear frequently that the United States is broke, that programs need to be cut, and that we either need to expand the tax base (in other words, tax more low-income people) or tax wealthier people at a higher rate. We have to take these measures because, well, we're broke.
Except we're not, say filmmakers Karin Hayes and Victoria Bruce in their film We're Not Broke. There's plenty of money, and there are plenty of ways for the government to access that money without taxing individuals: We just need to make sure US corporations pay the intended federal tax rate.
Many corporations in the United States don't pay taxes, and the ones that do usually pay far, far less than the 35% federal tax rate for companies with annual taxable incomes of $18.3 million or more. Bank of America infamously paid nothing—nothing—in federal taxes in 2010.
How do they get away with this? I only have the fuzziest concept of how the 72,000 page federal tax code works, and unfortunately, even after watching the film it's not much clearer. But, generally, these corporations take advantage of loopholes in the tax code that allow them to claim profits made in the United States, from American consumers, in other countries with lower corporate tax rates. They go to Ireland or Bermuda or any other country that has set itself up as a corporate tax haven. These loopholes cost the country an estimated $100 billion in revenue per year.
Yes, this is incredibly frustrating, particularly to individuals who are paying their taxes, with a grimace but without fail, every April. The filmmakers deftly touch on the idea that taxes are seen only as a burden, an oppression, rather than the price individuals and companies pay for the right to live, work, be educated, and do business in this country (rights which serve some populations more effectively than others). In one scene in the film, protestors frustrated by cuts to social services (which may have been preventable if corporations paid their taxes) go to set up a homeless shelter in a Bank of America—only to find the ATM vestibule already has real overnight residents. In my neighborhood, the Bank of America is always full. So I get it, the anger is real.
The problem, though, is that the filmmakers seem to misdirect the anger. As upsetting as it is to see corporations (some of which were bailed out with federal funds) avoid their taxes, the problem is that what they're doing is legal. Most corporations aren't breaking any laws by using these tax havens—in fact, they have an obligation to their stockholders to protect their investments, and using tax havens is a highly effective way of doing that. Corporations are not going to voluntarily pay more taxes, and a high corporate tax rate that's unavoidable will likely just cause them to do business elsewhere. The problem isn't with them; the problem is in the tax code. To fix that, we shouldn't boycott bank branches, we should call our senators—which brings up the much more expansive issue of whether or not that senator is receiving donations from those same corporations.
The federal tax code is just one symptom of the corporate infusion into public policy. Increasingly, through campaign donations, expensive lobbying, control of the media, and crossover between executives who become politicians or government officials (and vice versa), the government seems to favor the interests of corporations over people – to the extent that corporations now are people. I would have preferred to see the filmmakers focus more on this broader, messier idea, rather than strictly looking at tax loopholes. Those loopholes are only in place because of the disproportionate influence of corporations in politics, and until we address this bigger challenge, they'll keep getting away with it.
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