By Noah Nelson
Exactly how and why the United States has found itself in financial crisis and up to its eyeballs in debt is, from one point-of-view, a simple story: as a country we spend more than we take in. The equation looks a little like this:
$$ - $$$ = -$
Still, you've surely heard on a regular basis that we pay way too much in taxes here in the States; that the corporate tax rate is the highest of any developed nation; that we have to reform our tax code to make it simpler and more fair. Above all we've been told that we have to cut our spending because, as a nation, we're broke.
In the new documentary We're Not Broke directors/producers Karin Hayes and Victoria Bruce examine the income side of the equation with surgical precision, laying bare the system of off-shore tax havens, massive corporate lobbying, and accounting trickery that transforms the United States' 35% corporate tax into an effective 0%.
Hayes and Bruce use expert interviews to detail the corruption, while contrasting that with the efforts of activists in the US Uncut movement to inform the public about what they see as tax dodging by some of the largest corporations.
The filmmaking duo connected with the movement's organizers in the early days of that movement, Hayes said, before they'd taken their first action.
In an article in The Nation they read about Carl Gibson, one of the activists featured in the film, who was organizing in Jackson, Mississippi. They called Gibson the same day, and he soon gave them permission to come film his work.
The footage with the activists puts a human face on matters that are almost deliberately obtuse and abstract. After all, if it was easy to understand what accountants at multi-national corporations pull off, the companies would not be as likely to get away with the massive tax breaks they receive. By focusing half the film on the activities of the activists, the filmmakers provide an entry point to the issue: a sense that ordinary people can have a voice against the tide of corporate cash, and a bit of personal drama as the activists sneak into shareholders meetings.
Not all of the activist's antics wound up in the finished film, however. The need to balance the film between the organizers, and the wall of information necessary to understand what exactly they are protesting, meant leaving some of the filmmaker's favorite material on the cutting room floor.
"I think that there's so many incredible things that these people did," said Bruce. "Some of them were underemployed, some of them had full-time jobs, but all of them were so creative. There was an action done by the San Francisco group of Uncut where they made a QR code, and they wore these body stockings, and they went in to an Apple convention in San Francisco, this huge annual Apple convention. The QR code was on their belly and they were all multicolored little robots. So people would go up and take a picture with their phone of the QR code and it would take them right to this tax dodging video they had made [about Apple], which was just brilliant. You can't find this stuff on Madison Avenue that these people are doing to really pull one over on these corporations."
While the film's production involved tracking the actions of the US Uncut activists through months of action, and ultimately into many of them joining forces with the Occupy movement in the fall, it also meant that the filmmakers had to dive into the murky waters of corporate taxation. I was curious if what they learned shocked them.
"One of the things that I learned in terms of the corporate tax dodging: the layers of how this is done," said Hayes. "You hear about lobbyists and how they influence politicians but then when we started really digging into the numbers it's like: 'Oh my gosh.' Almost nobody is untouched by this and the level of corporate involvement in our political system. I knew it was there but the more you learn the more incensed you become about how deep it is, and how ingrained and the fact that the corporations with their accounting firms are basically able to feed pieces of legislation to the congresspeople [that] they get directly enacted. I think that to me was... I don't know if i'd say shocking but definitely lit a fire under me."
The filmmakers remain cautiously optimistic about the prospects for reining in the tax dodging, referencing in the film a quote by Fredrick Douglas: "Power concedes nothing without a demand. It never did and it never will."
"It's not something that's going to be solved in a matter of months or even a year," said Hayes. "It could take ten years to solve this problem. But I definitely do see that there's hope in that happening and there are some Congress people who are pushing for changes in this right now."
Bruce pointed to the recent move by the Senate -- a ban on insider trading by its members thanks to the public outcry in the wake of a 60 Minutes investigation -- as a sign of hope. On the other hand, she readily acknowledged that corporations won't go down without a fight.
We're Not Broke details two ways in which corporations are pushing for an even more permissive system of taxation in the U.S. One is a tax holiday that would allow companies to bring back the money they have sheltered off-shore to the United States without paying the full weight of taxes. The other is a version of the territorial tax system practiced in other countries around the world.
A true territorial tax, without loopholes, might actually cost corporations more than what they pay now in the U.S. However, that's not what they're angling for, according to the film. What the film portrays is a hybrid system that would effectively exempt multinationals from almost all U.S. taxes.
"Both of these will just drain us of hundreds of billions of dollars of income," said Bruce. "Trillions of dollars of income in the end, over several years. Both of them are bad. So the fact that we close the tax loopholes on one hand, I could totally see all these companies lobbying for a whole different set of rules that will be just as lucrative to them or more so if we don't get the corporate money out of politics.
"They're working non-stop with billions of dollars at their disposal to find ways to game the system. Always."
We're Not Broke may not be the final word on the issue of income inequality and the role that corporations play in our lives, but it is an important piece in the jigsaw puzzle of understanding this complex issue. Hayes and Bruce's film boils down some of the more complex elements at work behind the scenes, making it essential viewing for those who want to understand just how we ended up in this mess in the first place.
We're Not Broke. Directed and produced by Karin Hayes and Victoria Bruce, premièred as part of the 2012 Sundance Film Festival.
Originally published on
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