A few weeks ago the citizens of this small, conservative Alpine country did something no other country has been able to do. They brought to heel the corporate bosses whose reckless money grabs have so efficiently stolen salary, pensions, and benefits from the people who do the actual work in a company.
The mechanism the Swiss used was simple. They passed the “Minder Initiative,” a referendum mandating that company stockholders vote on the pay of its executives. A small step, to be sure, but it gets better. (more…)
(Wis. AFL-CIO) – A new video has surfaced in which Gov. Walker tells billionaire businesswomen Diane Hendricks, owner of ABC Supply Company, that attacking collective bargaining rights for public employees is just the “first step” in his “divide and conquer” plot to bust unions.
Diane Hendricks recently gave Gov. Walker $500,000 dollars and is Gov. Walker’s single largest campaign contributor. What you may not know is that Hendricks’ company, ABC Supply, pays $0 in corporate state income taxes.
According to the report by Institute for Wisconsin’s Future, ABC Supply paid exactly $0.00 in state corporate income tax in 2005, 2006, 2007 and 2008, according to the state Department of Revenue. Tax data for more recent years were not available when the information was requested from the department.
Visit http://www.wisconsinsfuture.org/ to view the report Who Does Not Pay Taxes.
Forbes magazine calls ABC Supply “the nation’s largest roofing, window and siding wholesale distributor.” It is estimated that annual sales approach $5 billion. While ABC Supply may be a huge money-maker for Hendricks, the Wisconsin corporate income tax returns she files claim the company makes not a penny in taxable profit.
Why is it that Gov. Walker publicly states that he does not want to destroy private sector unions, but the truth only comes out when he is kissing and hugging a billionaire campaign donor?
What Gov. Walker did not anticipate is that the people of Wisconsin would unite against his “divide and conquer” strategy and mount one of the largest grassroots efforts to reclaim their state in recent memory.
(AFL-CIO NOW) – A new report reveals the “extraordinary influence” the American Legislative Exchange Council (ALEC) has had in the Wisconsin legislature during the past 16 months—the same 16 months since Gov. Scott Walker (R) took power.
Lisa Graves, executive director of the Center for Media and Democracy (CMD), which released the report, says:
This corporate-backed agenda undermines the rights of Wisconsin families while advancing the agenda of huge corporations and special interest groups.
ALEC peddles fill-in-your-state’s-name model legislation to suppress voting rights and eliminate collective bargaining. Its model bills include anti-immigrant legislation, right-wing measures on education and tax breaks for corporations.
Along with the new report, CMD and Common Cause have requested Wisconsin’s attorney general to look into ALEC’s lobbying activities.
CMD Law Fellow Brendan Fischer, who authored the report, says the global corporations, which provide funds for ALEC—along with the extremist right-wing brothers Charles and David Koch—”are buying influence with Wisconsin legislators through potentially illegal gifts called ALEC ‘scholarships.’”
They are not only giving Wisconsin legislators thousands of dollars of campaign contributions, they are also buying flights and hotel rooms. These gifts undermine Wisconsin’s reputation for clean government and the strict ethics rules designed to protect the voices of Wisconsin residents in our state’s democracy.
Here are some of the key findings from the new report:
Click here for the full report.
ALEC has been in the headlines recently because more than a dozen of its corporate sponsors and 45 state legislators have resigned over ALEC’s connection in pushing the “Stand Your Ground” gun law that is at the center of the Trayvon Martin killing in Florida.
– from AFL-CIO NOW
A small Investment in the Dept. of Revenue can generate $100 million in uncollected taxes for critical public services
A new report by the Institute for Wisconsin’s Future shows how Wisconsin would profit by following Minnesota’s model for closing its tax gap. The report – Investing in Revenue – shows there are more than $900 million in taxes legally owed to the state but not collected. There are also several hundred million more in taxes that should be paid but haven’t been because of either deliberate or accidental misfiling or failures to file a tax return. One simple solution to Wisconsin’s revenue crunch is to invest in staffing needed for the state’s Department of Revenue (DOR) to access this large pool of uncollected tax dollars. The report examines how this has been done in Minnesota with great success.
This strategy has worked here before. In 2009, the state legislature invested nearly $12 million for additional DOR tax-collection staff. The goal was to raise an additional $70 million. DOR raised far more than this. Under the current state budget, the department lost another 52 staffers. Eighty positions within DOR remain vacant. All this translates into a major financial loss for Wisconsin.
At this juncture, Wisconsin could invest $12.5 million in resources for the Department of Revenue and realistically expect to generate $100 million in additional revenue during the 2011-13 budget biennium. This is a net gain of $87.5 million. All that’s needed are the staff and technology to collect the cash. This requires no change in tax policy, no increases in tax rates or in fees. The money to expand DOR capacity would be repaid sevenfold by new revenues obtained.
Dennis Collier, the author of the report, is the former Director of Tax and Fiscal Policy for the Wisconsin Department of Revenue. He has seen how the staff reductions at DOR have reduced the Department’s ability to collect the money owed. “While Wisconsin has cut staff and watched revenues drop, Minnesota has invested in their Department and seen a consistent increase in monies collected. If we follow their strategy, we can avoid further cuts to important programs such as health care and education.”
Rep. Cory Mason (D- Racine), ranking Assembly Democrat on the Legislature’s Joint Committee on Finance said:
“Budgets are all about choices and priorities. Scott Walker has told us that he had no choice but to slash funding from our UW system, our public schools, and our job training and health care programs. This report makes clear that there are indeed other choices available to our state. Before we kick one more child off BadgerCare, or take another dollar from our public schools, we need to aggressively collect the tax dollars that are already owed to Wisconsin.”
The full report is at www.wisconsinsfuture.org. The Institute for Wisconsin’s Future is a non-profit research and public education organization based in the Milwaukee area. Its work is funded primarily by nationalphilanthropies.
By Ron Blascoe
Ron Johnson ran for the U.S. Senate in 2010 on the slogan “Government doesn’t create jobs—the private sector creates jobs.”
Like most things out of Johnson’s mouth, this idea was about 180 degrees wrong. And, here’s why.
One of the dirty secrets down on Wall Street is that U.S. corporations are currently sitting on about $2.0 trillion in “liquid” cash assets. This is according to the Federal Reserve’s Flow of Funds Guide, published in September. And, despite the ongoing recession, that “mountain of cash” is up 24 percent over last year.
What we’re talking about here is cash money that corporate America could invest right now in reopening plants, expanding production and hiring workers: creating those jobs, jobs, jobs that Johnson says the private sector is so good at.
But they’re not investing in ways that would get the unemployed back to work. Instead, they’re shoveling their mountain of cash into low-yield government bonds, the Wall Street equivalent of stuffing it in the mattress. In fact, some of these investments offer return at a rate below the current rate of inflation, so that they are actually losing money.
So, why won’t corporations invest in creating jobs? The answer is as old as capitalism itself.
Since capitalism emerged out of feudalism some 400 years ago, it has been wracked by “periodic crises of overproduction.” Simply, individual manufacturers rush to produce as much as they can in good times, hell bent on profits, until some sort of “bubble” bursts. Then, for a time, incomes are reduced for some segment of the population and demand for commodities goes down.
Companies respond by cutting back on production until they can sell off their inventory. The result is layoffs. And, of course, layoffs further reduce income, which further reduces demand, which…you get the idea. This downward spiral is called a recession, unless it gets really bad in which case it’s called a depression.
Historically, there have been two general ways out of recessions and depressions. One is that there is an extended period of high unemployment, perhaps a decade or more, until inventories get used up and demand slowly picks up. The other is that economies often pick up when countries plunge themselves into major wars, and governments go on massive buying sprees, acquiring the tools of the trade.
It’s not that the American people don’t need home appliances, building materials, cars, tractors and other manufactured goods. It’s that we don’t have enough money to buy those things at a price where the manufacturers can make an acceptable profit. So stuff doesn’t get sold, and new stuff doesn’t get made, and workers don’t get paid….you get the idea.
Consequently, Corporate America is now drowning in cash. And they’re not about to spend it hiring laid off workers.
Where They Got $2 Trillion
It must certainly seem odd to most people that, amidst the economic hardship all around us, U.S. corporations could amass such wealth. Aren’t we all feeling the pain?
Well, no. As it turns out, U.S. corporations made record profits again last year, according to Commerce Department figures. In fact, they made a cool $1.7 trillion in the last quarter of 2010, setting a new record.
They accomplished this miracle by cutting costs and getting more productivity out of the remaining workers. In more familiar terms, they did it through layoffs, speedups, lower wages, forced overtime and shifting the cost of health insurance and pensions to workers. Working America has made a major contribution to the mountain of cash being held by Corporate America in another way. We pay taxes, but they don’t.
In a now-familiar story, a recent New York Times article noted that 25 percent of the 280 largest corporations in this country paid less than 10 percent in taxes on their profits and 30 companies paid no taxes on profits for the past three years. This disparity is often attributed to the Bush Tax Cuts, which heavily favor the idle rich, who make their money through investments, over those of us who make a living by working. But, of course, the “Bush” tax policy is somehow continuing through the current administration and is not due to expire in 2013. The total amount sloshed to corporations and the rich through these tax cuts: $2.8 trillion.
Jobs Jobs Jobs…Somewhere Else
As noted earlier, much of the cash accumulated by U.S. corporations is being effectively stuffed into the mattress rather than used to restart the economy and hire laid off workers. But there’s an even darker side to this picture. As it turns out, Corporate America is using its new unearned wealth to create some jobs, jobs, jobs. The problem is that they’re doing it somewhere else, somewhere else, somewhere else.
According to the Washington Post, U.S. companies increased jobs in foreign countries by 30 percent in the past decade—mostly in China, India, Brazil and Mexico—even while they cut their U.S. workforce by 8 percent.
The reason is no secret: cheap labor. A worker in Mexico makes an average of only $2.92 per hour, according to the Bureau of Labor Statistics. And even that’s better than the 81 cents per hour in China.
And, more tax breaks and higher profits for Corporate America only mean more of the same.
Next Month: How government really does create jobs.
Corporate giant Spectrum Brands Holdings will be getting a check for $4 million dollars from the taxpayers of Wisconsin in exchange for a promise not to shut down operations in Madison and to hire “up to 60 new workers.”
It’s the latest in Wisconsin Governor Scott Walkers campaign to create 250,000 jobs in the state by 2014.
Spectrum, the multinational parent company of Rayovac batteries and Remington, among others, threatened to leave Wisconsin unless the state came up with some cash.
Walker proudly announced that he had brokered the extortion deal in a press release on November 29.
“We’re pleased that Spectrum is committed to staying in Wisconsin and is making a major investment in its operations,” Walker said. “We’re also excited that they are currently in the process of hiring up to 60 workers at their headquarters.”
The payoff was made through the Wisconsin Economic Development Corporation (WEDC).
“Since our origins, more than 100 years ago, as a battery manufacturer on Madison’s East Side, our company has played a significant role as a major employer in Dane County and other parts of Wisconsin,” Spectrum Brands Holdings’ CEO Dave Lumley said in a press release. “We appreciate this award from Governor Walker and WEDC as we have made a commitment to retain our headquarters and operations in Wisconsin and invest in our future in the state.”
Walker has promised to create 250,000 new jobs in Wisconsin in his first term. The Spectrum deal breaks down to a cost of about $67,000 per new job. At that rate, it will cost Wisconsin taxpayers a little over $16.7 billion to reach Walker’s goal.