Here's a pop quiz for Congress: If you cut food assistance for needy families by $333 million, and allow corporations to dodge $183 billion in federal taxes in the same year, how much did you end up reducing the deficit?
We just saw the first round of $85 billion in sequester cuts, now coupled with the injustice of the top five "too-big-to-fail" banks -- Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and Goldman Sachs -- receiving an annual subsidy of $63 billion. The next five biggest banks receive a $20 billion annual subsidy. This still continues even though we just allowed sequestration to cut $333 million from the supplemental nutrition program for Women, Infants and Children (WIC). We're spending billions to keep big banks afloat, but we just cut 600,000 needy mothers and their children from the WIC program. This government has decided it would rather starve children than take big banks off the welfare rolls.
On top of their annual TBTF subsidy, the five biggest banks have paid effective tax rates lower than that of the average family, and in the case of Bank of America, Citigroup and Wells Fargo, paid negative effective federal tax rates on their profits. Goldman Sachs' fancy lower Manhattan skyscraper was made possible after Congress gave them and other Wall Street banks $8 billion in tax-exempt funds in 2002, while other New Yorkers in need of affordable housing had to find a way to make do on their own. These big banks, for more than a decade, have gotten buckets of free money from the federal government, and additionally get away without paying any federal taxes, even getting hundreds of millions, or even billions, in federal tax refunds. So by default, we either run larger deficits, or the rest of us have to pay more taxes to pick up their slack.
These big banks aren't doing anything illegal; they simply make use of the loopholes in the tax code that they successfully lobbied to have implemented, and subsequently shift their profits to overseas tax shelters. Bank of America alone has over 300 foreign subsidiaries, 115 of which are in countries designated as tax havens like Bermuda and the Cayman Islands. The actual money is in a bank in the United States, but complex schemes in the tax code allow them to have it booked in countries where there is a zero percent corporate tax rate. And due to one of these loopholes, known as deferral, these billions in corporate profits can remain tax-free as long as it's booked overseas.
It's amazing how hard our media and our politicians are telling us to not make the connection. It's easy enough for anyone to see that as these corporations become more adept at rigging the tax code with excessive loopholes, their profits climb ever higher as the government becomes increasingly starved for revenue. We recently saw the Dow Jones hit a record high, even surpassing the mark it hit in 2007, just before the housing bubble burst and the recession began. This is due largely to overseas corporate tax avoidance schemes. The congressional lapdogs of these corporations argue that lowering the corporate tax rate would bring corporate tax revenue back home. However, as long as these loopholes remain in place, it won't matter if we cut corporate tax rates to 30 or 25 percent because they can still get zero percent overseas.
President Obama is hearing constantly from the CEOs of the biggest corporate tax dodgers who are part of the AstroTurf "Fix The Debt" campaign, which has been exposed numerous times as a lobby for CEOs to keep their tax loopholes while forcing cuts to Social Security and Medicare. And because Fix the Debt and the U.S. Chamber of Commerce has constant access to the president, he's now preparing to force cuts to "entitlements" that people depend on for their income and health care, while doing nothing about the entitlements that the government gives to big banks and corporations to dodge their tax obligations.
There's a bill that would fix this problem and address problems like the deferral loophole. Sen. Bernie Sanders' and Rep. Jan Schakowsky's Corporate Tax Fairness Act would close these loopholes and raise nearly $600 billion on a decade. That revenue is more than enough to offset the austerity just forced on us by the sequester. This tax day, let's take shelter from the cuts inside the branches of these big banks since they're evidently the only ones immune from all the cuts. Bring lots of friends, take lots of pictures and videos, and send the message that we won't tolerate any more austerity from this government until they pass the Corporate Tax Fairness Act and make these big banks and corporations pay their fair share.