"These firms have to become viable, and that means they have to look at all of their costs and bring them into line so that they can compete in today's global economy because they have come to the taxpayer asking for assistance, and that's the least the taxpayer can ask for in return." 

- White House spokesman Tony Fratto as quoted in Washington Post 12/24/08

"And that's the least the taxpayer can ask for in return?" Excuse me? Just who the hell are the taxpayers here?

Corporate lobbyists like to claim that the U.S. has among the highest corporate tax rate in the world at 35%. And they are right.

What they don't like to discuss, however, is the effective corporate tax rate; the amount these corporations actually PAY in taxes each year. And, once again they are right in avoiding this topic, because to do so would severely undermine their argument that business pays its fair share in taxes in this country when in fact they enjoy considerable corporate welfare.

In November, 2004, McIntyre and Nguyen published their study FREELOADERS: Declining Corporate Tax Payments in the Bush Years. Their findings show a disturbing growth in the corporate welfare state under Bush that has continued unabated to this day. The numbers should be embarrassing to any within this corporate class who claim legitimacy as a taxpayer in light of the enormous profits recorded by the Fortune 500 Companies that were studied.

Over the three-year period, the average effective rate for all 275 companies dropped by a fifth, from 21.4 percent in 2001 to 17.2 percent in 2002-2003.

The statistics are startling:

·         Eighty-two of the 275 companies, almost a third of the total, paid zero or less in federal income taxes in at least one year from 2001 to 2003.....

·         Twenty-eight corporations enjoyed negative federal income tax rates over the entire 2001-2003 period....

·         In 2003 alone, 46 companies paid zero or less in federal income taxes.....

·         In 2001, the Treasury paid corporations $40 billion in tax refunds, a third more than the 1998-2000 average.

·         Then in 2002 and 2003, after the law was changed to expand tax subsidies and make it easier for corporations to carry back excess tax breaks to earlier years, corporate tax refunds skyrocketed to an average of $63 billion a year -- more than double the 1998-2000 average.

Corporations are now paying the lowest levels of taxes in the post-World War II era. In fiscal 2002 and 2003, federal corporate incomes taxes dropped to their lowest sustained level as a share of the economy since World War II. Only a single year during the early Reagan administration was lower.

Embarrassing? Indeed, unless you have no shame, are overly-impressed with your self-importance, and you are accustomed to having your way via extortion sprinkled heavily with campaign contributions.

How else might the "respectable" Mr.  Paulson & Co. pull off a $700 billion dollar heist of these tax funds in broad daylight? With a straight face, how might they insist that these monies be gifted - with no strings attached - to many of the same companies who have in fact contributed few or no tax dollars to the Treasury account in the first place? How else could they sleep at night after taking a good portion of this money and passing it around as income bonuses and severance packages to their friends or as dividends to their shareholders?

Yet the arrogance and elitism expressed by these "Captains of (the Financial) Industry" and the corporate owners of wealth is not yet fully defined here. No, it is their response to the taxpayers request for assistance in maintaining their own earning potential that sets a new and high standard for just how incredibly arrogant the corporate sector has become, along with their apologists in the political and media arenas.

Having avoided the greater share of their responsibility to pay taxes, these parasitic corporate welfare tagalongs would now propose to tell the taxpayers how their tax dollars should be spent. It was humbling - no, humiliating - to watch as the CEO's of the Big Three Automakers pleaded their case before Congress to receive $17 billion dollars in loans from taxpayers to help our auto industry weather this economic downturn which, by the way, was initially triggered within our financial markets. The amount requested was a mere pittance compared to the monies that were gifted to the financial market itself. And these dollars were expected to bridge a time period within which the auto industry would create a plan that showed how they would survive the economic upheaval we face. This, alone, was different than the Paulson giveaway, which was accomplished without any real explanation of how his $700 billion dollar disbursement might actually serve the interests of anyone beyond the people to whom it was given.

After having stolen theirs, Paulson & his corporate comrades would now insist that "free market capitalism" requires any loans to the manufacturing sector be considered only if the middle class beneficiaries first make concessions to reduce their earning potential. "These firms have to become viable," says the White House, carrying water for these Class Warriors from the winning side "and that means they have to look at all of their costs and bring them into line so that they can compete in today's global economy." How better a way is there to reduce labor costs, they ask, than to use this time of need to extort additional wage concessions from the UAW?

The appropriate answer, from those among the middle class smart enough and strong enough to finally engage the enemy in this Class Warfare which has been visited against us, is to say "Kiss my ass!"

It is past time for the middle class to become smart enough to understand that their earning potential is directly linked to the success of the UAW and other union bargaining efforts. We must be smart enough to understand that a race to the lowest common denominator in wage rates for labor does not serve our interests. We need be smart enough to understand that the "enemy" is not our working brethren, but rather the wealthy class who maintain a strangle hold on labor to gain for themselves every bit of wealth they can grab from this economy.

In standing tall together and repelling this demand that we surrender ground in this economy by agreeing to lower our wage expectations and become "competitive," we can at last let the wealthy corporations and the "ownership" class know that we are not their "human resource." We are not simply another commodity - like steel, or utilities, or raw materials - to be bought cheap, used up, discarded and replaced.

Instead, we must proudly insist that we are owners of this economy with every right to share in its benefits as the wealthy class has done these last number of decades. We are, in fact, the taxpayers who deserve benefit of any taxpayer bailout - whether tendered as a gift or a loan - that may now be offered to soften the blow of this economic downturn. Rather than a "free market," we must instead insist that we engage a "fair market" that recognizes the need to include everyone - poor, wealthy, and in-between - in developing the means by which we will pursue the blessings of liberty and the pursuit of happiness in our economy.

For now, however, the important question to be answered is, unfortunately, "Whose side are you on?" In the end, we must certainly align ourselves with all our brethren - poor, wealthy, and in-between - instead of choosing sides in a counter-productive battle between players in this economy. That is, after all, what democracy is all about. We ultimately need to all roll up our sleeves and work together for the common good in overcoming the many challenges we confront in this economic downturn.

Meanwhile, however, it's important to understand that we have had a Class War imposed upon us by those who hope to beat us into submission. We therefore must now stand tall in defense of ourselves and others in the middle class who have meekly stood for far too long with hat in hand awaiting the largesse of the wealthy corporate class who sold us on "trickle down" economics, and who instead set about robbing us of everything - up to and including our pride - to fatten their own bottom line.

Congress must now do whatever is necessary to address the immediate problems in our economy. In so doing, however, they must refrain from engaging the Class War on behalf of their campign contributors and instead lay the groundwork for a new economy that serves everyone's interests going forward.

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NOTE: Read more CLASS WAR essays by scrolling through the posts on SleepinJeezus' blog here.