FacebookTwitterGoogle+RedditEmail

Helmsley and the “Little People”

by SCOTT KLINGER

Twenty-nine years ago, billionaire hotel magnate Leona Helmsley told one of her housekeepers: “We don’t pay taxes; taxes are what the little people pay.”

Her words set off a firestorm that spanned the political spectrum.

Today, our tax system has become so rigged by Helmsley’s modern disciples that her belief that only “little people” pay taxes increasingly shapes our tax system.

More than $700 million of employee state withholding taxes are legally pocketed by 2,700 companies, rather than being sent to state treasuries, says a new report from Good Jobs First, a nonprofit group that tracks corporate government subsidies. The report, “Paying Taxes to the Boss,” documents programs in Illinois, Ohio and 14 other states that let corporations that collect state withholding taxes from their employees keep a portion of those taxes to pay for corporate projects.

Workers work hard all day, and think that their tax dollars will pay for good schools, adequate police and fire protection, safe bridges and roads. Instead, states are channeling this revenue to pay for improvements to factories and office buildings, maybe even new carpet in the bosses corner office suite. The corporations that Good Jobs First named in its report are the same ones that often show up on lists of companies avoiding taxes or aggressively lobbying to cut corporate-tax rates. They are such giant companies as General Electric, Ford and Caterpillar.

Corporations have tapped the little people’s increasingly meager resources to chip in to pay for their facilities. For example, Apple which is sitting on more than $100 billion in cash, recently announced a new $304 million operations center in Austin, Texas. Taxpayers are kicking in $21 million from the Texas state government and $9 million from Austin to aid America’s richest corporation. Meanwhile, Texas has cut $4 billion from its education budget and laid off more than 100,000 teachers.

While corporations have successfully lobbied to keep some of their employees’ tax payments for their own corporate uses, and won other direct taxpayer subsidies, such as Apple’s Austin windfall — moves that have created a drain on public coffers — they also have pressured state lawmakers for rules rigged to reduce their corporate state tax obligations.

A recent Citizens for Tax Justice (CTJ) study of state corporate taxes found that among 265 large and profitable corporations, 68 paid no state income taxes in at least one year between 2008 and 2010, and 20 averaged a tax rate of zero or less over the entire three year period. State-level tax dodging cost state governments more than $42 billion over the three-year period, according to CTJ.

The diversion of state tax revenue into corporate coffers is an underreported contributing factor to the state fiscal crisis that has resulted in 2.5 percent of the nation’s teachers losing their jobs. In just the first two weeks of April, Detroit’s public schools laid off 4,000 employees, while Cleveland’s schools cut 600 jobs. Dozens of small communities have similarly downsized their school staffs in the last month.

It wasn’t always this way. Not long ago, when workers looked at the pay stubs and saw that they had paid state taxes, they could rest certain that those funds would be spent on public projects. Corporations used to pride themselves for being the biggest contributors to city and state tax rolls. Today, they boast more about their charitable giving, such as buying baseball uniforms for the local school — luxuries that the local school district can no longer afford.

Corporations that behave this way have become like a pickpocket who returns to the scene of the crime and offers to buy his victim lunch because he has no money.

It’s time for us little people to rise up, as they did three decades ago, and denounce those who embrace Leona Helmsley’s worldview. America needs a tax system that meets our needs to pay for good schools along with safe and dependable infrastructure. We’ll only get there if the “big people” start paying their fair share, and stop picking employees’ and taxpayers’ pockets.

Scott Klinger is an Associate Fellow at the Institute for Policy Studies.

This essay originally appeared in The Providence Journal and was distributed by OtherWords.

More articles by:
May 24, 2016
Sharmini Peries - Michael Hudson
The Financial Invasion of Greece
Jonathan Cook
Religious Zealots Ready for Takeover of Israeli Army
Ted Rall
Why I Am #NeverHillary
Mari Jo Buhle – Paul Buhle
Television Meets History
Robert Hunziker
Troika Heat-Seeking Missile Destroys Greece
Judy Gumbo
May Day Road Trip: 1968 – 2016
Colin Todhunter
Cheerleader for US Aggression, Pushing the World to the Nuclear Brink
Jeremy Brecher
This is What Insurgency Looks Like
Jonathan Latham
Unsafe at Any Dose: Chemical Safety Failures from DDT to Glyphosate to BPA
Binoy Kampmark
Suing Russia: Litigating over MH17
Dave Lindorff
Europe, the US and the Politics of Pissing and Being Pissed
Matt Peppe
Cashing In at the Race Track While Facing Charges of “Abusive” Lending Practices
Gilbert Mercier
If Bernie Sanders Is Real, He Will Run as an Independent
Peter Bohmer
A Year Later! The Struggle for Justice Continues!
Dave Welsh
Police Chief Fired in Victory for the Frisco 500
May 23, 2016
Conn Hallinan
European Union: a House Divided
Paul Buhle
Labor’s Sell-Out and the Sanders Campaign
Uri Avnery
Israeli Weimar: It Can Happen Here
John Stauber
Why Bernie was Busted From the Beginning
James Bovard
Obama’s Biggest Corruption Charade
Joseph Mangano – Janette D. Sherman
Indian Point Nuclear Plant: It Doesn’t Take a Meltdown to Harm Local Residents
Desiree Hellegers
“Energy Without Injury”: From Redwood Summer to Break Free via Occupy Wall Street
Lawrence Davidson
The Unraveling of Zionism?
Patrick Cockburn
Why Visa Waivers are Dangerous for Turks
Robert Koehler
Rethinking Criminal Justice
Lawrence Wittner
The Return of Democratic Socialism
Ha-Joon Chang
What Britain Forgot: Making Things Matters
John V. Walsh
Only Donald Trump Raises Five “Fundamental and Urgent” Foreign Policy Questions: Stephen F. Cohen Bemoans MSM’s Dismissal of Trump’s Queries
Andrew Stewart
The Occupation of the American Mind: a Film That Palestinians Deserve
Nyla Ali Khan
The Vulnerable Repositories of Honor in Kashmir
Weekend Edition
May 20, 2016
Friday - Sunday
Rob Urie
Hillary Clinton and Political Violence
Andrew Levine
Why Not Hillary?
Paul Street
Hillary Clinton’s Neocon Resumé
Chris Floyd
Twilight of the Grifter: Bill Clinton’s Fading Powers
Eric Mann
How We Got the Tanks and M-16s Out of LA Schools
Jason Hirthler
The West’s Needless Aggression
Dan Arel
Why Hillary Clinton’s Camp Should Be Scared
Robert Hunziker
Fukushima Flunks Decontamination
David Rosen
The Privatization of the Public Sphere
Margaret Kimberley
Obama’s Civil Rights Hypocrisy
Chris Gilbert
Corruption in Latin American Governments
Pete Dolack
We Can Dream, or We Can Organize
Dan Kovalik
Colombia: the Displaced & Invisible Nation
Jeffrey St. Clair
Fat Man Earrings: a Nuclear Parable
Medea Benjamin
Israel and Saudi Arabia: Strange Bedfellows in the New Middle East
FacebookTwitterGoogle+RedditEmail