Uncut Tax Movement Is Morally Righteous
Never heard of UK Uncut? What about US Uncut? Ever think about the moral failure of corporate leaders who hide their profits in tax havens? Should they have the right to enjoy the benefits of living in a good society while they avoid paying taxes needed to sustain the common good?
Here is some backstory: According to UK Uncut, after the British government announced in October 2010 "the deepest cuts to public services since the 1920s," protesters occupied Vodafone, one of Britain's major cell phone companies. The movement went viral. Protesters closed 30 Vodafone stores in three days.
The protesters connected the £7 billion ($11.34 billion) in cuts to housing subsidies for the poor with the £6 billion ($9.7 billion) tax bill that Vodafone owed the British government. Vodafone had refused for years to pay its taxes, using a tax haven known as the nation of Luxembourg.
When the Conservative Party came to power, the party announced drastic cuts in social services and settled the dispute with Vodafone for £1.2 billion pounds ($1.9 billion).
"It was clear to us that if this one company had been made to pay its taxes, almost all these people could have been kept from being forced out of their homes," said one of the protesters. "We keep being told there's no alternative to cutting services. This just showed it was rubbish. So we decided we had to do something."
A peaceful tax justice movement spread across Britain.
UK Uncut targeted Barclays last weekend, a massive British bank begun 300 years ago and reportedly insured by British taxpayers. Barclays is alleged to have some 250 tax havens – offshore hideaways that protect bank profits from taxation and promise corporate chieftains big bonuses.
British media reported that Barclays had £11.6 billion ($18.8 billion) in profits in 2009 and paid only £113 million ($183 million) in corporate taxes. Barclays was distributing some £3 billion ($4.9 billion) in bonuses from 2010 profits.
Protesters are targeting the Royal Bank of Scotland on Feb. 26-27. It's disbursing a £2 million ($3.2 million) bonus to its CEO at a time when the bank is predicting £700 million ($1.13 billion) in losses.
The Guardian newspaper reported that one of the founders of US Uncut is Carl Gibson. He is the son of a Methodist minister and resident of Jackson, Miss.
"The message is simple – before you sacrifice hard-working public sector employee's [sic] jobs and necessary public programs, why not first make the richest of the rich pay their fair share in taxes?" Gibson told The Guardian about the motives of US Uncut.
US Uncut says that the alternative to the massive budget cuts sought by Republicans and the Obama administration is to "make corporate tax avoiders pay."
The organization's website said: "Since 2009, America's most profitable companies such as ExxonMobil, General Electric, Bank of America and Citigroup all paid a grand total of $0 in federal income taxes to Uncle Sam. Tax havens alone account for up to $1 trillion in tax revenue lost every decade, money that could be invested in K-12 education, colleges, public health, job creation and hundreds of other worthy public programs."
US Uncut announced that it is targeting Bank of America on Feb. 26, which "has consistently avoided any form of accountability to the American taxpayer."
Bank of America reportedly received $45 billion in bailout funds and hid tax dollars in more than 100 tax havens.
According to The Nation, President Obama hasn't kept his 2008 campaign promise to pursue tax havens.
"He pointed out that one building in the Cayman Islands claims to house 12,000 corporations, and said: 'That's either the biggest building or the biggest tax scam on record.' He promised he would 'pay for every dime' of his spending and tax cut proposals 'by closing corporate loopholes and tax havens,'" according to the magazine.
If readers are skeptical about the Nation and uncomfortable about the claims of US Uncut, then think about the report from the U.S. Government Accountability Office.
"Eighty-three of the 100 largest publicly traded U.S. corporations in terms of 2007 revenue reported having subsidiaries in jurisdictions listed as tax havens or financial privacy jurisdictions. Sixty-three of the 100 largest publicly traded U.S. federal contractors in terms of fiscal year 2007 federal contract obligations reported having subsidiaries in such jurisdictions," read the GAO report on "International Taxation," released in December 2008.
Corporate tax havens and loopholes may be legal. And why wouldn't they be legal? After all, the secular golden rule says that those who have the gold make the rules. Those with the gold run the Obama administration and Congress – along with their corporate-sponsored think tanks and lobbyists.
But that doesn't make corporate tax havens and loopholes moral.
And unless we – the people – insist on corporations paying for the right to live in and benefit from good societies, then good societies will be at risk for dirty water, unclean air, unregulated food, substandard public education, predatory financial institutions, health care only for the those who can afford it, collapsing infrastructures like roads and bridges, cutbacks in fire and police protection.
The poor will experience these harmful effects and suffer additional hardships from the lack of adequate nutrition and prenatal care, immunization against diseases, job training – to mention only a few social adversities.
The Uncut movement has the marking of a righteous movement. May Uncut prick our moral conscience and challenge our leaders to do the right thing – protect the poor and preserve the common good through tax justice.
Robert Parham is executive editor of EthicsDaily.com and executive director of its parent organization, the Baptist Center for Ethics.
Click here to learn more about EthicsDaily.com's documentary on faith and taxes, "Sacred Texts, Social Duty."