Rise of the Machine, Demise of the Public Realm

Scoop presents some highlights of the latest ICFTU report of the effects of corporate tax policies on the countries that entertain tax dodges, loopholes and offshore havens for the companies that employ these provided or tolerated devices. Of course, the companies are merely taking advantage of the long-standing practice of many governments to provide tax breaks and give-aways in order to attract the businesses.

Across the developing and developed world, there is a race to the bottom, not just in labour conditions and environmental regulation, but in collectable taxes received from multi-national corporations, which, more often than not, contribute as much harm -- and possibly much more harm -- as good to those countries which seek the corporate presence . Currently, the report cites that developing nations forfeit $50 billion per year from tax havens used by corporations operating in those countries. But this is also seen here in the US. Of the 275 largest corporations in the US, 82 either paid no tax or received a refund, as though they're living below the poverty line and are claiming child tax credits.

But the larger issue raised by the report (pdf) is that societies are endangering their own livelihood by enabling this behaviour -- indeed, seem to be encouraging their own downward slide. And over the course of the last 30 years, while coporate profits have soared, overall tax revenue has dropped, in some cases plummeted, in industrialised nations as well. Governments around the globe have shifted the tax burden from corporate economic activity to private citizens, whose own tax rates have generally increased. Of course, the situation has worsened over the same period of time during which corporate executives have increasingly has made their presence known within the halls of government. One need only look at the members of the current Bush administration to recognise the uncomfortable fact that, indeed, the melding of corporate and government interests is very near complete.

Ignoring the behaviour of his own vice president's former company, Halliburton, even George Bush said he's not happy with companies that dodge taxes.

I think we ought to look at people who are trying to avoid U.S. taxes as a problem. I think American companies ought to pay taxes here and be good citizens.

This displeasure was a veneer, of course, because despite Bush saying that he would not award federal contracts to companies based at offshore tax havens, his administration awarded Halliburton no-bid contracts out the wazoo for Iraqi reconstruction, all while Halliburton maintained its offshore position. Good citizen, indeed.

But the Halliburton example is just a small piece of the global picture that sees the rise of corporations at the expense of common society. Crime, disease, drug addiction, war, natural disaster; all these things are ramping up around the globe and corporations profit from every one of them, while governments everywhere battle for their business and ignore the plights of their own people.

As the number living in poverty continues to rise; as the ranks of the uninsured swell; as New Orleans still reels; as the manufacturing base of the country evaporates under outsourcing, favoured US corporations now face the staggering dilema of what to do with record profits, while at the same time, the US government faces the staggering dilema of what to do in light of record deficits. The prima facie evidence that backs up the overall picture delivered by the ICFTU report is the nation of the United States under the administration of George W. Bush.