My Art Haven vs. Corporate Tax Havens
Maintaining a community arts collective is the most fun I’ve had in my entire life. And yet I want to blow my brains out.
Sure, that’s dramatic. What I mean to say, is that having fun constantly is very stressful. Especially in the light of capitalist society. We are taught to be ‘Rugged Individuals’. The hunting, white male protagonist of a Hemingway story is told over and over. If you want something, go out and get it. Yet behind closed doors, assets are being given over and over. Corporate Tax Evasion is one of the greatest evils in our society today. Social Darwinism is preached to the public, but what is administered is a club for the good old boys to run. How is a freaky artist to make it in this sort of club? I am not against profit. As a business owner, I know how very hard it is to conduct affairs and that CEOs deserve high pay. It seems mysterious to the proletariat when we hear the outrageous numbers they make. They are certainly, high and out of control, but they are also taking great risks and putting in long hours.
I am privileged in more than a few ways. I am a white, college educated, middle class male. But I do rally against injustice and my interests are certainly in the minority for my society. The alignment of my values has marginalized me. Yet my privileges make me a great candidate for social change. While it would take an entire book or documentary film to describe these woes, I will give a rudimentary breakdown, so you can be informed enough to research for yourself.
I. Tax Avoidance:
If you have the money to do it, you don’t have to pay taxes. It’s called Tax Avoidance and is often done under totally legal means. I had to pay a few thousand dollars in property taxes this summer. It’s a pretty healthy percentage of the revenue generated by the arts collective. As you can imagine, the art world in a city with a population of 50,000 isn’t the most lucrative. I work several different jobs in order to make ends meet.
Tax avoidance is often achieved by establishing a subsidiary of the company in a different country. Ireland was commonly utilized by multi-national corporations for this purpose. In 2015 measures were taken against a practice known as the ‘double Irish’. This allowed companies that began in America, to set up a subsidiary in Ireland, or a Headquarters rather, and then move much of their profit to the Bermudas. Ireland did not have strict laws about how the money moved.
The reported number is that mostly American companies hold about $2.1 Trillion in profits in off-shore accounts. 16.77 Trillion is the American GDP in 2013. Let that sink in. Over ⅛ of the money is unaccounted for. Also think about the word gross. Of that 16.77 trillion that we generate, much of it goes back into itself in order for the economy to sustain and continue moving forward.
II. Our Arts Collective:
In a small city 100 miles north of Detroit, with a history of poverty and crime, I have opened an arts collective. What the hell is an arts collective?
It is a place in which all of the arts and humanities can share an interstice. Rarely have I met a writer who wasn’t also interested in music. Or a musician who didn’t have some semblance of fashion. Most creatives spread their interests among many things, and in fact most people do as well. Painters love nature, sculptors love junk, poets love psychology, philosophers love fine cuisine and so on.
So an arts collective is a place in which those tastes can all meet and interact with one another.
But the shape of poverty is that people don’t really get the chance to develop those tastes. They are limited in their options and are somewhat silenced in their ability to develop an opinion.
So while I wish to curate a more rogue and avant-garde community, I must also cater to the needs of my community. I am fortunate that I recognize this.
Could the poverty be limited, so all people's tastes can grow?
III. Tax Money:
$3.8 trillion is collected by the government. Roughly 20% of the GDP for Americans and about 12,000 per each individual. We know that almost an eighth of the GDP sits off shore and equals almost half of our tax revenue. It would be pretty easy to guess that 20% of that money would be added to our tax revenue.
Now, it could definitely be argued that the money wouldn’t make a difference in the lives of the everyday person across America. Those who live under around the poverty line. That their access to the things needed to improve their live would only increase by slim proportions and that arts collectives would continue to do poorly in these sorts of towns.
But it could be argued that the money could be used wisely as well. People with limited access to education or diverse diets or the things that make up a better lifestyle, would begin to gain access due to this influx in tax revenue.
I believe that it could. $1.1 trillion is used for discretionary spending. $2.45 trillion is used in mandatory spending. Discretionary spending is the stuff that congress votes on every year. Well over half of it goes towards the military and pentagon. Mandatory spending are things that are not voted on with regularity. Well over half of that goes towards Social Security and Food Benefits programs. When a pie chart is examined to see exactly how the spending works, slices like education are tiny compared to the military. If only that particular slice were made larger, people would benefit.
342 Billion. That will be the population of Earth before I die.
Kidding. That is the number of dollars generated by corporations for tax revenue. Compare that against $1.48 trillion raised by civilians. It just doesn’t make any sense. When a great amount of people are working for the minimum wage and there is always an unemployed mass ready to take your job, it becomes clear that the common man doesn’t have financial influence the way the capitalist does. So how does it happen we, the civilians, pay almost three times what corporations do?
Our country was reformed due to bad tax law. We had an entire revolution because of it. Perhaps the bureaucracy of the time wasn’t so overwhelming yet. As I have learned more and jumped into the pools of local litigation, I know how little I really know about regulation and business. There are infinite hoops and whistles in maintaining my art space. It is a wonder that I am not paralyzed with fear that some capitalist legislator is going to crash my party. Bureucracy reigns supreme, let’s have a meeting about the meeting for the meeting ahead. How did this happen?
IV. Bureaucracy of Our Times:
I’m trying to throw a concert in the street. The arts collective I run would like to do a simple celebration and voter registration concert to educate the public. Pretty simple, right? Not at all. Too many people have fallen and sued the city. Okay, well that is fair. Get insurance. The fire marshall has to look it over, the zoning committee, traffic committee, city council, registrar, secretary for each department, private insurance broker, agent for musicians, landlords from every business owner in and around the area, sponsors for events, some of them show it to their attorneys and even my mother wanted to stick her beak into the affair.
Is this wrong? No. It is what has happened in the time between now and the revolutionary war. We have formed departments and committees. We are waiting for responses. We are informed and educated.
It is this very process, that allows corporations to avoid paying taxes, legally.
While I benefit and highly advocate from social programs, as simply as Social Security to the more complex notion that food programs help keep my brothers from starving, I didn’t advocate for the lack of transparency and labyrinthal politics that have formed in my lifetime. That was created by a history of lawyers arguing to get their way. And most often, rich, white, male lawyers from places in a certain geography and league of ivy. And most often without my consent, or my father’s consent or his father consent. You see, my grandfather is pretty well off. He started an excavation company that landed millions of dollars in contracts. In our area, he may be considered rich. And I certainly was raised middle class. But this isn’t the same as the wealth and power of East Coast America. It is kept so far away from the common man that no one but themselves can benefit from it truly. It is spoken in an almost foreign language. Who is lobbying for me in my attempt to throw a concert in the street?
How do corporate profits make such a large percentage of the GDP, yet their taxation doesn’t correspond? There are myriad answers. One of the primary reasons is that corporations have the litigious manpower to sort methods of avoidance. A very simple answer is that the laws are bent to accommodate them. Here is a simple primer on lobbying.
It began with an attempt by advocacy groups to meet with constituencies. If a fertilizer company wanted their product to become more the mainstream, they would take to the farmers and get them to vote their decisions. But over time, the constituents were cut out of the equation. The companies and corporations would go directly to legislators as more and more decisions were being made without public vote. This allows for less checks and balances and more corruption and bad morality. There can even be a conflict of interest for legislators if the lobbyist asks for the exact opposite thing than the community desires.
VI. Obscure Tax Havens:
Google the Panama Papers. The good old boys have the ways and means to keep the money in their circle. The Center for Freedom and Prosperity is a Non-Profit in our continental U.S. that has received billions of dollars from off shore accounts with one principle in mind. Convince legislators that they will be punished if they do not stay competitive in the tax world. Lobbyists have convinced legislators not to do much because America needs to remain competitive with the other countries out there that are allowing corporations to get by on low to zero taxation. This is often done with ‘Shell Companies’. A ‘Shell Company’ is the larger umbrella company that owns the companies that are actually producing a product that could be taxed. These shells are placed in offshore countries with no taxes. Wealthy individuals are house under them, corporations and sometimes even entire governments. Globally, it estimated that almost $8 trillion is hidden within these accounts. The Global GDP is about $80 trillion. So this is roughly 10 percent of all money produced, entirely veiled from the public.
Think about the impact it would have on the economy. I know that if my community got even a trickle of some cash, it could revitalize the downtown and give people the freedom to develop interests that would allow me to expand into avant-garde art territory.
VII. Just Getting By:
What do we value? Those of us who pay our taxes. I ask myself regularly, do I want to be king of the heap? How does the heap work? If the heap is just a bunch of poor and uneducated, what does it even mean to be the king of the heap? Would I be better to be in the middle of the pack of a group of highly educated and sophisticated people?
It always boils down to community for me. I know that my welfare is directly related to the welfare of those around me. The property taxes that I pay to the city will directly benefit my community. As my community improves, they gain the freedom to explore the arts. To waste a dollar on a food item they have never had before. Exploring is something only the financially secure or the very courageous can afford to do.
While corporations employ every method they have to line their investors pockets, we lose. That is money taken away from education and art. That is more of the same, military spending and status quo, going unchecked by the American people.
My art space is just getting by, while the wealthy of the globe are hiding 10 percent of the entire generated product from us. Google avoids paying $2 billion in global income tax by moving $10 billion in revenue (80 percent of pretax profit) to Bermuda, which does not have a corporate income tax. They save $1 billion in taxes per year by moving profits through Ireland and the Netherlands.
I googled all of that information. They control everything. All I have left is my space and my integrity.
Benjamin Champagne believes that we are in an enlightenment era. The information age will over-saturate us until our souls are lifted up on high. The fire of suffering becomes the light of consciousness. He is co-owner of Counter Culture in Saginaw, MI, an arts collective with a focus on art, music and any aspect of the humanities, and writes monthly reviews for Newpages.com.