The power suits making billions off the stock market are always trying to assure us that their trading serves a socially redeeming purpose. They steer money to companies and industries that make our economy more productive, they claim.

In reality, the majority of stock trading today has absolutely nothing to do with helping companies raise capital to innovate and create jobs. Thoughtful investors don’t drive today’s Wall Street. Computers do.

A sustainable, robust New Economy requires us to think more consciously about investing in the ‘good,’ e.g., what we value and need in society and avoiding investing in the ‘bad,’ which computers do because they are just programmed to make money — and occasionally end up crashing the system as they did in May 2010.

As the debate over taxes and revenues heats up this summer along with the temperatures, keep in mind this is not only an important source of potential new revenue but could save us all from another painful crash.

Risks of High Frequency Trading is an article on Wealth For Common Good.

There are so many things wrong with public policies that allow this to happen:

• The inequity it creates for the many domestic companies that do not have big offshore accounts in which to ‘park’ their earnings creates a very unlevel playing field
•  It contributes greatly to our underfunded governments that can no longer provide for the needs of the people and the planet to live healthy, sustainable lives.

As Chuck Collins and Scott Klinger point out in their recent article, Shortchanging America:

When the U.S. economy was healthier, corporations had multiple responsibilities. They provided their employees with good jobs, paid taxes that sustained their communities, and offered valued services to customers. Then, as now, they delivered dividends and profits to shareholders. Corporate leaders and managers understood that meeting these obligations were necessary for long-term success. They built their companies to last.

So much of what needs to be done to create a 21st Century nation can only be done as a community–at the local, state and federal level. Who doesn’t want a water system that provides clean drinking water, an electric grid that doesn’t fail constantly and schools with 21st Century technology, green energy and non-toxic environments where our children can learn and become 21st Century citizens of the world? We can only do that together.

Many corporations are finding angry protesters at their shareholders meeting and there are many reasons for this. Verizon is another recent example coming to light of a low/no tax corporation. Collins and Klinger point out that hopefully citizens will continue to protest until we all face the truth of what we need to do to turn things around:

The angry citizens who are raising their voices at annual shareholder meetings this spring understand that shifting the American business model back to “built-to-last” mode will require new rules that promote dignified work, fair taxes, and a smaller gap between CEO compensation and workers’ paychecks. Unless we change these rules, built-to-loot companies will be a national wrecking ball.

The public is far ahead of politicians in knowing we must end these distortions in our tax code. Let’s hope more of our political leaders begin to heed our voices.

Corporate Tax Rates Take Center Stage is an article on Wealth For Common Good.

By Scott Klinger and Sarah Anderson

Many American families will have paid more in federal income taxes than some of America’s largest and most profitable corporations. AT&T, Boeing, Citigroup, Duke Energy and Ford collectively reported more than $20 billion of US pre-tax income last year, yet none of them paid a dime in federal income taxes. Instead, they claimed refunds of more than $1.3 billion from the IRS.

These corporations are not alone in turning tax dodging into a competitive sport. Last year, US corporations paid an effective tax rate of just 12.1 percent, the lowest level in the last forty years, according to the Congressional Budget Office. Sixty years ago, when Republican President Dwight Eisenhower lived in the White House, corporations paid 32 percent of federal government’s tax receipts; last year they paid 9 percent.

Below are six examples of how large corporations have rigged the tax rules to ensure that those who have the most get to amass even more, at the expense of everyone else. Figuring out how to unrig them is not rocket science, but it will require strong public pressure on lawmakers to ensure that America’s most prosperous corporations pay their fair share.

Boeing’s Double Dip

In each of the past nine years, Boeing has reported at least $1 billion in pre-tax profits, yet in only one did it pay any US corporate income taxes. In fact, the aerospace giant got so much money in tax subsidies that it had an effective tax rate of -7.8 percent during this period.

One of the main reasons Boeing has avoided the taxman is that the rest of us subsidize their research and development spending. Last year this amounted to $137 million. Congress first passed the research and experimentation tax credit during the 1981 recession, intending to provide a temporary boost to America’s sagging economy. Though it has expired for short periods over the years, it has been renewed thirteen times, and Congress is presently considering making the tax credit permanent.

Government investment in basic research and development can be valuable, but the way the current tax credit is structured, much of the support goes to large well-resourced high-tech firms like Boeing that would have conducted the research anyway as a part of maintaining a vibrant business.

What’s particularly disturbing about the Boeing subsidies, however, is that the company already bills the Pentagon for research costs. The third largest defense contractor, Boeing has landed more than $54 billion in government contracts in the past nine years. So essentially, taxpayers are paying for the company’s research — twice.

GE’s Tax-Free Offshore Profits

General Electric employs 975 people to mine the tax code for every possible deduction. One of their IRS returns ran an awe-inspiring 57,000 pages. As a result, GE paid an effective tax rate of just 2.3 percent on more than $81 billion of US income over the last decade.

One of GE’s most lucrative tax breaks is dubbed “the active financing exception.” Under US tax law income earned from interest anywhere in the world is taxable in the United States. That is because interest is consider a “passive business activity” that is easily transferred from country to country. The active financing exception allows corporation that establish captive foreign finance subsidiaries to exclude interest they earn offshore from their US taxes. The 1997 subsidy was meant as a temporary measure to help US banks and manufacturers compete internationally.

General Electric’s lobbyists, who led the fight to create the subsidy, have made sure the “temporary” part was just a joke. Congress has renewed the exemption multiple times over the last fifteen years. And in the meantime, active financing has allowed GE to legally shift much of its US profits to overseas jurisdictions with lower taxes.

The active financing exception is one of sixty tax breaks, known as “tax extenders,” that expired last year. Congress is actively considering reauthorizing them, even while they also consider dramatic cuts to social programs.

AIG’s Stealth Bailout

In 2008, American International Group’s reckless uncovered bets helped lead the global economy to the brink of collapse. Taxpayers bailed out the rogue insurer to the tune of $182 billion.

Less well-known is a perk the US Treasury made available to AIG that allowed the company to retain its losses to offset against future profits. Tapping these tax losses allowed AIG to report more than $17 billion in tax-free profits in 2011, a move Elizabeth Warren, who chaired the TARP oversight panel, labeled a “stealth bailout.” “When the government bailed out AIG, it should not have allowed the failed insurance giant to duck taxes for years to come,” wrote Warren in a statement co-signed by three other panel members.

“This corporate tax break transfers public money to AIG’s private shareholders and inflates executive pay at AIG — both at the public’s expense,” added Damon Silvers, another member of the oversight panel. At least four of the executives who stand to benefit financially from the tax break were leading the company at the time of the massive failure.

Continued At The Nation

The Nation: Six Unfair Corporate Tax Rules is an article on Wealth For Common Good.

by Scott Klinger and John Cavanagh

Inside and outside of Wells Fargo’s annual meeting in San Francisco yesterday, thousands of angry protesters decried the bank’s leading role in the loss of millions of American homes to foreclosure.

(Dan Honda/Contra Costa Times/MCT)

If you want to know why the protesters are so angry, consider this double standard. For most Americans, retirement security lies in the value of their homes. Millions of these people have been losing that security as the nation’s largest banks have foreclosed on them. Yet the CEOs of these banks are reaping giant pay packages and padding their own retirement security with profits squeezed from ordinary people.

For many American families, a paid-off home is part of the dream of a secure retirement. The roof over their heads has long comprised the largest element of most families’ net worth. The housing crisis brought to us by the country’s biggest bankers has stolen the dreams of the nearly 4 million families who have lost their homes to foreclosure since the housing crisis began in 2007.

Of those who continue to live in their homes, more than a quarter have lost so much equity that they now owe more on their mortgage than their residence is worth. Even those who have never missed a payment on these underwater mortgages have found it all but impossible to refinance their loans to take advantage of record low rates that would cut hundreds of dollars from their monthly payments.

As American families struggle with their shrinking equity, Wells Fargo is enjoying record profits. Its earnings clocked in at more than $4 billion during the first quarter of 2012.

Wells Fargo and Bank of America are the country’s two largest mortgage servicers. Over the past three years, the number of homes foreclosed upon by the two giant banks has steadily grown. At the end of 2011, they reported to federal banking regulators that they held $22.5 billion and $19 billion worth of foreclosed houses, respectively.

While foreclosures have devastated the financial security of millions of American families, the CEOs of Wells Fargo and Bank of America have seen their retirement packages balloon.

The pension assets of Wells Fargo CEO John Stumpf stand at $16 million, according to the company’s proxy statement. The vast majority of these assets came from a special plan available only to the company’s top executives. As high as Stumpf’s retirement assets have soared, they’re exceeded by those of another Wells Fargo executive. Mark Oman oversees the company’s consumer lending division, where most of its ill-fated subprime loans were made and where many customers have lost their homes to foreclosure. His retirement assets top $17 million.

Bank of America CEO Brian Moynihan’s pension assets now total $6.8 million. His nest egg came mainly from a special “supplemental” pension plan.

It’s long past time that banking regulators stopped these dream-stealers from laughing their way to their gold-plated retirements. Protesters are insisting that the corporate funds diverted to prop up the lavish lifestyles of those responsible for upending the lives of the millions of American families who have lost their homes be redirected toward principal relief for homeowners devastated by these banks’ actions.

The Wells Fargo action was just the start. Don’t be surprised when thousands more protesters show up when Bank of America shareholders gather on May 9 in Charlotte, N.C.

Scott Klinger is an associate fellow and John Cavanagh is the director of the Washington-based Institute for Policy Studies (ips-dc.org). This article was distributed by OtherWords. For more like this one, visit OtherWords.org.

Bank CEOs gain as millions lose dreams, retirement to foreclosure is an article on Wealth For Common Good.

April 10: 28 Patriotic Millionaires support the Buffett Rule at the White House

April 11: Elspeth Gilmore with our partner, Resource Generation, participates in panel hosted by Congressional Progressive Caucus

Click here to view video

April 13: Chuck  Collins interviewed on Buffett Rule

April 16: Chuck Collins: US News & World Report Buffett Rule Debate

April 17: Tax Day! Lots of Action around the country!

Pie Day video captures our campaign with Resource Generation in actions around the country in 1 min 32 seconds! RG Members in NYC: “Read All About It”.

Chuck Collins speaks out at “Stop the Pledge” Rally outside Grover Norquist’s office in DC.

Chuck Collins at Grover Norquist office: Stop the Pledge Rally

Ann Manning in Minneapolis:

Ann Manning standing with 99% in Minneapolis 2012

Our Voices Were Heard – April Actions is an article on Wealth For Common Good.

Recently, the New York Times interviewed Saez and Piketty on the growing inequality in the United States. “The United States is getting accustomed to a completely crazy level of inequality,” according to Mr. Piketty.  We agree.

Yesterday, we all paid our taxes acknowledging we are bound together in support of the common good. Some of us did not pay your fair share but not because you didn’t want to, but because the tax codes have been rigged to benefit the top 1-2% and the multinationals.

Consider writing a letter to the editor of your local newspaper, telling them why you support the Buffett Rule as a start, a beginning to renewed fairness in this country and to reducing the “radical, crazy levels of inequality” that exist today in the United States.

For talking points, contact Ann@wealthforcommongood.org

Economists Saez and Piketty, Inequality Experts, say Buffett Rule Just a Start is an article on Wealth For Common Good.

Each person on Wednesday appeared with an assistant who, it was suggested, paid taxes at a higher rate than the boss — the inequity that the so-called “Buffett Rule” is meant to redress.

The pairs included Abigail Disney, president of the Daphney Foundation, and her assistant, Celine Justice; Whitney Tilson, managing partner of T2 Partners L.L.C. and his assistant, Kelli Alires; Frank Jernigan, who has retired from Google, and his assistant Teresa Gardiner; and Lawrence Benenson, partner of Benenson Capital, and his assistant, Carmen Peterson.

Though it didn’t pass the Senate, more and more Americans now know that they are paying more to support the public institutions we all rely on in this country than some of the wealthiest people on the planet. Our messages are getting out and the public is getting educated. Keep up the good work, everyone!

Patriotic Millionaires Support Buffett Rule at White House is an article on Wealth For Common Good.

First though, if you haven’t call your Senators, please do that now. The vote is expected at 5:30 PM EDT today. Info is here.

If you’ve made your calls, find the debate here.

Chuck’s article starts:

Congress should pass the “Buffett rule” to restore fairness to the federal income tax system and raise urgently needed revenue. But lawmakers should go further to rebalance the tax code and eliminate many provisions that benefit only the wealthiest 1 percent and a couple of thousand transnational corporations….

Want to do more? Find some Tax Day ideas here.

Vote for the Buffett Rule at US News & World Report is an article on Wealth For Common Good.