Picture an iceberg. Many children know the danger from the “Titanic Song” they learn in school or summer camp. One verse goes like this: “It was off the coast of England not very far from shore, when the rich refused to associate with the poor. So they sent them down below, where they were the first to go. It was sad when that great ship went down. Oh it was sad, so sad. It was sad, too bad. It was sad when the great ship went down... husbands and wives, little children lost their lives -- it was sad when the great ship went down.”
Some days it feels like America may be speeding towards that iceberg. Every day there is more disturbing evidence of the growing income and wealth gaps between rich and poor. Recent poverty data shows the number of people in extreme poverty, defined as a family of four living on less than $30 a day -- one in 15 Americans -- has reached a 35-year high. At the same time the gap between CEO and average worker pay rose dramatically from 263-to-1 to 325-to-1 last year. Twenty-five of the 100 highest paid CEOs last year took home more in pay than their company paid in 2010 federal income taxes.
A new study by Citizens for Tax Justice reported that 30 companies paid no federal income taxes at all for the last three years and that the 280 biggest publicly traded American corporations on average paid federal income tax equal to 18.5 percent of their profits during the last three years -- about half of the full corporate tax rate of 35 percent. This tax payment rate was lower than in many industrialized countries. In fact, the report found two-thirds of American companies with significant profits overseas actually paid more in taxes to foreign governments than to the U.S. government.
As the super committee struggles to make difficult decisions in the coming weeks to reduce the budget deficit, one of the proposals they are considering is reducing the corporate tax rate.
Corporations are pushing for a cut in their official rate, claiming they are at a disadvantage in the global marketplace. Their evidence is not so clear. We should all be looking closely at the important choices the super committee could and should be making to ensure everyone -- including the rich and powerful -- contributes their fair share. It would be deeply disturbing if all or any of the Republicans on the Supercommittee continue to refuse to put revenue on the table and insist on a cut-only approach to deficit reduction at the expense of children and the poor who did not create our fiscal crisis.
By the end of last year, American corporations reaped profits of more than $1.5 trillion. Each minute, $195,967 are lost to corporate tax loopholes. Every hour, corporate tax breaks cost the U.S. government about $11.8 million. If Congress were to balance corporate profits against critical child needs, just one hour of revenue generated by closing corporate tax loopholes could pay for:
Corporate excess looks a lot like General Electric’s balance sheet at the end of 2010. Huge pretax profits of $5.1 billion filtered through corporate tax loopholes meant GE paid no federal income taxes. To add insult to injury, had GE paid the full 35 percent corporate tax rate, it would have paid $1.8 billion in federal income taxes. Add this to GE’s reported $3.3 billion in tax benefits and you get a grand total of more than $5 billion of federal tax breaks for the year. This lost revenue could have been used to fund Head Start for an additional 670,000 preschoolers, creating at least 67,000 new jobs in the process.
Budget cuts already enacted on the federal, state, and local levels have harmed children and their families, especially low-income families hit hardest by the recession. Education cuts have led at least 292 school districts to cut back to a four day school week for children when more than 60 percent of our children in all racial and income groups cannot read or do math at grade level in the 4th, 8th, and 12th grades. According to the Washington Post, the number of school districts using a four day school week has more than doubled in two years. Arizona, Florida, Georgia, Illinois, Massachusetts, North Carolina, Texas and other states have cut funding -- including critical early childhood education programs that help children get ready for school -- to help close their budget shortfalls and adversely affecting hundreds of thousands of at-risk children.
What other choices could citizens demand our political leaders make? If they closed tax loopholes for the oil and gas industry it would generate at least $40 billion over ten years. About one year of that money could fund slots for over half a million infants and toddlers in Early Head Start, a program that currently reaches only four percent of eligible children during their period of crucial brain development. Expanding Early Head Start would create almost 150,000 new teaching positions.
The tip of the iceberg is the budget deficit; the failure to invest in our human capital deficit -- our children who are the poorest age group in America -- is the rest of the iceberg that will sink America’s ship of state. This is the critical time to raise our collective voices and tell members of the super committee, Congress and the White House we want them to cut and not increase corporate tax breaks and make sure rich corporations and rich CEOs pay their fair share. We must not balance the budget on the backs of our babies who need health care and nutrition, quality early childhood development and education, an affordable college education, and good jobs to build a strong America and rescue America’s vanishing dream. Children did not cause the budget deficit and they must not be sacrificed to help solve it.
Follow Marian Wright Edelman on Twitter: www.twitter.com/ChildDefender
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The Worst Generation (by that I mean the ever self-congratulatory "Boomers"), think in the exact opposite way. Not until they're put out to pasture -- happily living out their 401k-padded retirements -- is there any shred of hope that sanity will return to this country. They were the first generation to know better, but sold out future generations for the sake of their own luxury.
After 30+ years in power, it's been nothing but debt, neglected infrastructure, unsustainable financial schemes, corrupt wars, and a deeply sickened planet to show for it.
Sorry if I offended anyone, but just watch who will be exploited and made to pay the price for 3 straight decades of Boomer irresponsibility & complacency. "BOOM!" is right.
We should not be accepting this Super Committee. We did NOT vote for a representative Congress of six. We should always remember that these six people amount to nothing more than a non-military coup-d'etat in our Government.
Congress has passed the buck to these six people so that when these six people do the dirty work, Congress will have "clean hands" at election time.
They ALL must be held responsible.
Thanks for the confession. :- )
Well to those who do not understand or comprehend what the "Occupy Wall Street" movement wants......Here it is:
"we want them to cut and not increase corporate tax breaks and make sure rich corporations and rich CEOs pay their fair share. We want those who created the worldwide debacle to face the consequences, like the rest of us are." Simply put, no more and no less.
Jefferson Airplane presciently foretold:
"Look what is happening all over the street.
Got a revolution, it is a revolution.
Volunteers of America.
Volunteers of America.
Volunteers of America.
Volunteers of America.
"
There is no official spoke-person did you speak to all of them.
I have news for you all those of us who speak the truth to you
and to power are official spokepersons.
Democracy make us Big.
Democracy makes small.
Ask the Wall Street crowd that is one percent tall.
we will default on our 15 trillion in debt. Like others who have defaulted GM,
Post Office, Iceland, Chrsyler, Harrisburg it will usher in a golden
age without war and the daily person or country to hate to
justify war
F and F
The question is; How long can they get away with it? And I guess the answer is; As long as we let them.....
Maybe their evidence is not so clear... but yours is:
"... the number of people in extreme poverty -- one in 15 Americans -- has reached a 35-year high."
Why? The global marketplace! Globalization is killing us, but how does higher taxation fix that problem? We can't afford to drive more jobs and profits offshore. What matters even more than the tax rate is the TAX CODE. We are paying corporations to invest overseas and to offshore profits. We need to MAKE them bring that money home and invest it, but that can only be done with incentives and disincentives in tax code and trade policy.
Do you simply want more programs for the poverty-stricken, or do you want to actually lift them out of poverty? High taxes does the former; more jobs does the latter. If you can figure out a way to do both, let me know.
By all means, ELIMINATE LOOPHOLES and corporate welfare, tax the companies fairly, BUT give them breaks for investing at home and CREATING JOBS! (And only for REALLY doing it, not just pretending to.) That is the only real cure for the poverty problem. We have downward pressure on wages from immigration and globalization and increased productivity, so unless we create more wealth, there just isn't enough left for increasing entitlement programs as much as they are needed.
There is money for "entitlements" if that is the way the economic system is structured...like everything else, our perception influences our solutions.