Doing Something to Make a Difference
We're Not Broke
Ryan Clayton, Chuck Collins, Jesse Drucker, James Henry, David Cay Johnston, Edward Kleinbard, Rebecca Wilkins, Jeffrey Winters
Stranger Than Fiction: 17 Apr 2012
Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness. That feeling can create its own reality.
“This is one of the best moments of my life!” Ryan Clayton has just emerged from the Plaza Hotel in New York, his face flushed and his smile broad. The co-founder of US Uncut has just crashed a Bank of America investors meeting to tell them to pay their taxes. Escorted from the meeting by security, he and another protestor are catching their breath when a passerby spots the camera. “Is this a movie?” the guy asks off-screen. “No,” comes the answer, “This is people organizing to get corporations to pay their taxes, like the rest of us.”
As it turns out, this is a movie, too, as the people organizing are being recorded for We’re Not Broke. The documentary makes the case that changes in the US tax code have brought on the current, ongoing, seeming money crisis. It also makes the case that these changes have accrued over years, and have been engineered by corporations that are best described as multinational, even if they’re nominally US-based. This brief historical rundown couldn’t be more timely, of course, and the film is screening just as many viewers are completing their tax returns, on 10 April, as the opening night film for Stranger Than Fiction’s Spring Season, to be followed by a Q&A with directors Karin Hayes and Victoria Bruce.
Organizing by Clayton and other activists provides the film with something like a narrative trajectory. Roused by what he saw as an increasingly bleak economic future—for himself and for the nation—Clayton recalls here that he sought to create a “progressive Tea Party,” and borrowed the idea for US Uncut from UK Uncut. Both organizations have made healthy use of the web in order to publicize their own missions as well as to network with other groups. As Clayton says, almost immediately after setting up the website, he found like minds, including Joanne Gifford, described here as “a soccer mom from Napa, California,” Carl Gibson, a journalism school graduate who started Uncut Mississippi, and Bobbie Arrington, in New Jersey.
Each has a story to tell, and the camera crew follows them as they attend or put together demonstrations. Each also attests to the effectiveness of social media in their grassroots movement to take direct action against corporate tax cheats and unnecessary and unfair public service cuts across the US. As the activists provide action, the film also provides background, via a collection of talking heads. Economist James S. Henry observes that corporations’ “abilities to operate on the boundaries of the law are continually improving,” and Bloomberg News reporter Jesse Drucker explains that no matter how many IRS agents might be assembled to pursue tax dodging cases, in fact the law is continually revised to support the so-called cheaters. What the corporations is legal, and they mean to keep it that way.
Since 1961, the movie reports, “The total percentage of U.S. Federal Income Tax collected from corporations has been cut in half.” This means the burden of paying taxes—which fund services that corporations also use, like fire departments and police forces—goes to average citizens, those who don’t have squads of lawyers to find and exploit loopholes. Drucker describes one case in point, involving Google’s use of its Irish “subsidiary” (the company, he says, “entered into a contract with itself”) and an agreement with the IRS, in order to transfer wealth, from Ireland to Bermuda and elsewhere, and so avoid paying an ostensible US tax rate. “Google Overseas’ tax rate,” he says, “is a little over 2%,” a cut of some $3.1 billion. Companies do this as a matter of course, from Verizon, Exxon, and Citigroup to Bank of America, GE, and Facebook.
Corporations manage this system by buying politicians: they fund election campaigns or ensure employment after congressional careers (former Senator and deregulation proponent Phil Gramm’s relationship with UBS being a most obvious but also fairly typical example). Jeffrey Winters, author of Oligarchy, notes that the IRS has developed a similar “revolving door” system with private companies, a system that, in part, sets up for $70 billion to be lost each year, through offshore tax shelters. For all the talk about a simplified tax code, he argues, corporations have an “interest in maintaining complexities.”
If corporations can claim profits as an understandable rationale, some legislators go so far as to claim a principle: if corporations pay low or even negative taxes, they will “create jobs.” Rebecca Wilkins, an attorney for Citizens for Tax Justice, dismisses this argument (“We just know that’s not going to happen”), as decreased labor costs create profits, the end that trumps all others. And while small businesses are repeatedly named along with multinationals in such legislation, they rarely benefit to that degree, still paying taxes in the US. When multinationals insist they need lower tax rates in the States in order to “repatriate” their monies from, say, Ireland or the Cayman Islands (where Mitt Romney’s company banks), they’re only looking for ways to pay no (or again, negative) taxes anywhere.
This means that legislation like the JOBS Act, recently signed by Barack Obama, and supported by Democrats and Republicans alike, supposedly helps startup companies find funding, but does something else. As it further deregulates Wall Street and, according to Matt Taibi, it also “actually appears to have been specifically written to encourage fraud in the stock markets.”
Taking on just this sort of legislative sleight of hand, We’re Not Broke makes the alternative case repeatedly and persuasively. It is a movie, as that early scene outside the Plaza Hotel suggests, specifically one meaning to raise visibility, awareness, and outrage. And so it showcases activists like Clayton and Gifford, as well as the Occupy movement. As you watch images of protests in Madrid, London, DC, and Rome, Jim Coleman, owner of a Chicago heating and air conditioning company, takes hope. “Americans know in their heart that this is unfair. People say you can’t do anything about it. I disagree,” he says. “It doesn’t have to be the way things are.”