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The Rich Bribing Congress

Rigged For The Rich:

Taxes,

Massive Crimes,

&

Corporate Welfare

VOTE MONEY

OUT OF

POLITICS

In recent decades, our corporations and superrich have lobbied and bribed our government to get ever more tax breaks, taking from the poor and middle class, over and over again.

Just as Third World dictators steal from their starving people in order to deposit millions of dollars in Swiss banks and buy jet planes, lavish mansions, and vacation villas in Europe, wealthy Americans and corporations have spent decades manipulating our tax, bank, trade, and bankruptcy laws to benefit themselves.

One example of this rigged economy is changes our largest banks drafted in our bankruptcy laws that benefit the superrich and large corporations like airlines, car companies, and other manufacturers.

People like Donald Trump can buy with little money down and lots of borrowed money, cash out at the first sign of trouble, go bankrupt six times, walk away from their debts, and hold onto most of their assets, while their creditors and contractors lose billions.

Meanwhile, their workers who invest in local homes have no such protection when businesses fail. They lose their jobs, and their home values plummet. The new rules prevent people from declaring bankruptcy on mortgages for their homes or even renegotiating mortgages.

The new rules also prevent graduates from renegotiating student debt in bankruptcy and allow lenders to garnish their paychecks or even their Social Security checks in old age.

After wealthy people buy buildings with little money down, they get to deduct the interest on their loans from their taxes. Their limited partnerships or other legal ownership structures let them profit personally or deduct losses from their taxes while protecting them from lawsuits or responsibility for their corporate debts.

Superrich people like Donald Trump can invest in commercial real estate, then our government applies an antiquated law meant for farm machinery that wears out over time.

In this tax loophole, the building supposedly depreciates in value every year, even if the value skyrockets by millions of dollars. When the rich investors sell it, they get to claim a loss on their taxes, even if they made many millions of dollars!

Wealthy commercial real estate owners get to deduct their real estate losses against their personal income, something no other business owner can do. Donald Trump may have used a $950 million loss to avoid taxes for the next 18 years.

Owners of commercial real estate get to claim huge losses against their income even though they invest little of their own money and borrow the vast majority of it.

If a real estate mogul gets close to having to pay taxes, they often avoid it by just buying another building and starting the tax deductions all over again.

Unlike investors in any other business, billionaires like Donald Trump can also swap real estate in a 1031 “like-kind” exchange, selling one they don’t want anymore and avoiding tax on the profit by buying another building. In fact, they can do this again and again as long as they live, and never pay any tax on any of the sales.

The name “like kind” doesn’t mean much. In a 1031 swap, you can exchange an apartment building, rental condominium, ranch, empty land, or strip mall for any of these things. You can even exchange three properties for one. Or you can stop using your beach house, rent it out for six months or a year, and exchange it for other real estate, tax free.

The business of real estate is notorious for having so many deductions and tax loopholes. Real estate tycoon Leona Helmsley famously said, “Only the little people pay taxes.”

Donald Trump almost certainly uses his name and brand as an asset, so he can probably write off almost all his income and consumption on his taxes, like the Nevada prostitutes who can write off their clothes, hair styling, makeup, and sexy leg stockings.

When real estate tycoons die, even their heirs get tax breaks on multi-million dollar business buildings. Our tax code allows the heirs to sell the real estate and pay no taxes on the gain in value.

Private equity billionaires also get extremely cheap financing from us taxpayers to buy billions of dollars of rental apartments, due to a helpful new definition of affordable housing. Private equity firm Blackstone now owns and rents more single family homes in America than any other company.

The superrich also get tax deductions for the use of personal-travel jets and corporate jets for “security reasons.” Our taxes also pay for extremely cheap federal flood insurance for the most expensive waterfront real estate in our country.

Our laws allow people to deduct interest on mortgages up to $1.1 million, including the interest on mortgages for second mansions or even for yachts if they live on them for at least 14 days a year. This alone costs our government $100 billion each year.

Over 75% of mortgage interest and property tax deductions benefits each year go to families with incomes over $100,000 and close to a third goes to families with incomes over $200,000. Meanwhile, families earning less than $50,000 get only 3% of these benefits.

Close to half of homeowners with mortgages, mostly middle-class and lower-income families, get no deduction at all. Anyone too poor to pay income tax gets nothing.

In fact, families with incomes over $200,000, who don’t really need help affording housing, get more federal housing spending than 4 times as many families with incomes less than $20,000 who truly struggle with housing costs.

Reforming our ridiculous mortgage and property tax deductions could easily save our government money while helping homeless and low-income families far more.

Wealthy people can even buy and sell famous multi-million dollar paintings without paying any tax on the sales, using the same 1031 like-kind exchange swaps used by real estate tycoons.

We already noted the wealthiest people around the world are hiding between $21 trillion and $32 trillion in offshore tax havens to avoid paying taxes, but this doesn’t even count other assets such as property and yachts.

Countries around the world are losing $200 to $300 billion in taxes because of this hidden money, undermining their budgets. Many of our biggest banks, like Goldman Sachs, are deeply involved in this.

The very richest Americans and American corporations are the worst tax cheats. They think they should get exclusive benefits from our government and shouldn’t have to pay the same taxes their workers pay.

They’ve used their money to lobby for all kinds of sweetheart deals. By law, if you win a TV in a local lottery or find $100 on the street, you must pay income tax on it. But by law, heirs to the rich now can and do inherit billions of dollars and pay no income tax on it.

By law, workers can’t contribute more than $24,000 a year to their 401K retirement plans, but corporations can put unlimited amounts of cash in special CEO retirement accounts and they even get to claim a tax break for it.

The CEO that heads Pizza Hut, Taco Bell, and Kentucky Fried Chicken has a pension of $234 million, so he can collect $1.3 million every month until he dies, but none of his workers hired since 2001 get any pension and the company “just doesn’t have” $310 million it owes its long-term employees for their pension fund!

Some people on Wall Street actually make $2 billion a year. The top 25 hedge fund managers each make about $1 billion a year. Because of a carried interest loophole, they pay lower tax rates on their $1 billion than maids, secretaries, garbage men, truck drivers, teachers, nurses, and police officers.

Billionaire hedge fund manager Ken Griffin made $1.1 billion in 2014 or $528,000 an hour (well over half a million dollars an hour), yet he fights to break unions and stop working people from being able to negotiate their salaries and working conditions.

Hedge fund manager Ray Dalio, worth $14.3 billion, made $1.4 billion in 2015, yet Connecticut gave him $22 million of taxpayer money just to keep his company in the state.

Hedge fund managers don’t actually build businesses, develop new technology, create jobs, innovate, or add to this world in any helpful way.

All they do is financial speculation. They make a lot of money using insider information unavailable to small investors, in ways that are illegal in every other major nation.

Mostly, they charge massive fees just to invest other people’s money. And most of them do it poorly. In 2013, the hedge fund industry had far worse average returns (7.4%) than the Standard & Poor 500 stock index (30%). In fact, this was the fifth straight year they did worse than the S & P.

Private equity and hedge fund managers like Mitt Romney don’t create new products or services that contribute to our lives, either. They buy and flip businesses by putting down small amounts of their own cash and borrowing most of the money.

Without carried interest, corporate debt interest, and capital gains tax loopholes, most of their deals wouldn’t even make money. Their massive bank loans become debt for the acquired company, not for the private equity firm.

They often buy off the company’s management, who also expect to cash out after the sale of the company. The private equity company charges massive fees, commissions, and dividends on top the borrowed debt.

If the total debt sucked out of the company is too big, the managers must create the image of a solid company by firing people, selling stores or other assets, cutting pensions and other benefits, or eliminating long-term needs like apprenticeships and research.

The private equity company or hedge fund might increase the bottom line by sending jobs overseas, might make the company look like it is growing by acquiring another company, or might make the company look better by selling the debt to other companies and hiding this debt from the disclosed debt.

After the sale, even if the company later goes bankrupt, the private equity company has made a massive profit. The previous CEO and executives get their generous exit packages, but the workers lose.

Our finance and tax laws make this kind of speculation and profit, even when destroying companies, possible. In the past, people who didn’t have massive fortunes could never afford to take over companies like this.

Hedge funds, private equity firms, and large investment banks have bought tens of thousands of corporations like this, loading them up with debt.

Next, they buy up shares of the acquired company to make it seem more valuable in order to pay their CEO huge bonuses and massive stock options and to flood their investors with money.

Private equity firms have bought up even essential services such as ambulance companies, fire departments, and water companies. They now own about 25% of all ambulance companies.

With no experience in these areas, they often cut costs, increase prices, lobby, and aggressively bill and sue people for payment to make more money. They even sue people whose loved ones have died.

Their cost cutting measures have had terrible effects, such as ambulances breaking down, no available ambulances, slower ambulance response times, failing heart monitors, expired medicines, and even patient deaths.

In Knoxvill, TN, firefighters arrived almost an hour after the 911 call and the house was already destroyed, reduced to just ashes. Even so, the private-equity-owned company sued for payment and placed a $15,000 lien on the home the man rebuilt.

Some ambulance workers working for companies owned by private equity companies were told to steal supplies from hospital emergency departments.

Before 1982, experts agreed unlimited stock buybacks were dangerous, so they were illegal. A foolish change in rules allowed this practice to skyrocket, however.

Now CEOs artificially manipulate the market to increase the value of their stocks, without adding real value to their companies. In this way, they steal cash from their companies for themselves and their stockholders.

Now the top S&P 500 companies spend $1 trillion each year on buying back their own stock, equal to about 95% of their net earnings. The CEOs profit greatly, because 42% of compensation for these company CEOs are in stock options.

Instead of paying their workers better, investing in research for innovation, or creating jobs, superrich investors and CEOs are simply plundering their companies to enrich themselves and their shareholders.

In 1980, only 2% of corporate profits went to buy back their own stocks. By 2007, over 70% of all corporate profits went to bying back their own stocks. Apple spent $14 billion to buy back its own stock in February 2014 alone. We’ve already seen Walmart plays this same game.

In another tax loophole, corporations can deduct CEO stock option compensation from their taxes. In 2013, out of the 100 highest-paid American CEOs, 29 of them received more compensation than their companies paid in taxes.

These 29 CEOs earned an average of $32 million—a massive pay raise, up from an average of $16.7 million in 2010. As a result, these 29 CEOs, running companies that earned pre-tax profits of $24 billion, actually claimed $238 million in tax refunds for their companies.

These 29 companies, then, have a negative effective tax rate—below 0%. This means us taxpayers are actually helping cover the cost of the outrageous CEO pay packages.

The top 20 US banks paid out more than $2 billion in fully deductible performance bonuses to their top 5 evecutives between 2012 and 2015, forcing us taxpayers to subsidize their massive profits.

Jamie Dimon of JP Morgan Chase bank cashed in $22.9 million in stock options in February and March 2010, at the peak of the foreclosure crisis.

Lloyd Blankfein, CEO of Goldman Sachs, cashed in $28.9 million while his shareholders were still facing with massive losses from our economic crash.

These CEOs can laugh at us regular taxpayers all the way to the bank, while our government loses over $7 billion a year to this tax loophole.

Between 2007 and 2010 alone, the CEO stock option loophole allowed many companies that pay low wages to write off $66 billion in taxes.

Meanwhile, as noted previously, us taxpayers pay $153 billion each year to support their employees because they don’t even earn a living wage.

Many economists now believe our economy is in danger because too much money is being made from manipulating money, rather than actually providing goods and services.

Since the 1980s, finance has grown to become a larger and larger part of our economy. In 1995, the top 6 banks equalled 17% of our economy. By 2010, they accounted for 65% of our economy.

At the same time, our overall economic growth has slowed. Experts argue our bloated financial system is a huge drag on our economy—they estimate it has and will cost us an extra $22.7 trillion betweeen 1990 and 2023.

Between 1990 and 2005 alone, experts argue the extra cost lost to our economy was likely between $40,000 and $70,000 for every man, woman, and child in the US.

This makes the majority of Americans more poor, in several ways. As we shall soon see, banks burden poor people with excessive late fees, ATM charges, excessive interest on loans and credit cards, and predatory payday loans.

Working people have less money in retirement, too, because fees from managed mutual funds “are likely to confiscate as much as 65% or more of the wealth that … investors could otherwise easily earn,” as Vanguard founder Bogle testified to Congress in 2014.

Hidden costs of our bloated finance sector include reduced government services because of the sluggish economy and many of our smartest, most talented people working in finance to get rich instead of more productive fields like medicine or industry.

Our bloated financial market rewards manipulating money far more than the work we really need—pioneering research like great medical discoveries, the internet, or other new technologies. We should reverse this pattern and reward innovative, true contributions to society the most.

Also, banks now focus on trading and speculation instead of lending to potential new homeowners and business owners.

So the number of new businesses created—our most important source of job creation and economic growth—has plummeted. From 1979 to 2012, the percentage of new startups in all businesses fell by 44% from 1978 to 2012.

Sixty years ago, the people earning the most paid an income tax of 91% on their surplus money earned above and beyond their lower tax brackets. By 2012, the people earning the most paid only 17% on their surplus money.

Why? Because the superrich spend millions on expensive lawyers, estate planners, lobbyists, and funding the campaigns of politicians.

In return, they get their own private tax system that none of us regular Americans can access. By spending millions of dollars, these people literally save tens or hundreds of millions of dollars and pass billions to their children untaxed.

They hide their income from taxes by moving it to Bermuda and back or in complex partnerships, investment funds, family trusts, IRAs, and foreign shell corporations.

President Jimmy Carter called our tax laws “a disgrace to the human race” because of all our loopholes for the rich.

When the superrich and large corporations avoid taxes, we all suffer, losing billions of dollars for education, infrastructure, police, firemen, pensions, etc.

Between 1916 and 1975, we had a top estate tax rate of 77% on the very largest inheritances. The superrich Mars and Koch families funded organizations labeling it a “death tax” and raising a big stink, pretending it affected regular people.

You could just as easily call it “a tax on inheritances of spoiled, lazy, rich grown children who did nothing to earn their massive fortunes.”

By calling it a death tax and generously funding members of Congress willing to do their bidding, they got the changes they wanted. The wealthiest Americans have used estate tax loopholes to avoid an estimated $100 billion since 2000.

In fact, Republicans blackmailed Congress by refusing to extend desperately needed unemployment insurance during our recent recession until Democrats gave in and accepted lowering the estate tax.

The inheritance or estate tax is now zero unless a couple leaves more than $10.86 million to their children. This supposedly horrible “death tax” affected only 5,200 families in the US last year.

Over half of the money in estates worth over $100 million is capital gains that have never been taxed at all. Because of a step-up basis for capital gains loophole, heirs can inherit hundreds of millions of dollars of these capital gains and never pay any tax on it!

Because of loopholes like those above, the average estate tax now paid by those multi-millionaires and billionaires rich enough to pay it is only 16.3%. This is a far smaller percentage than the middle class pays on their income tax each year.

Just returning to the estate tax rate of 1998 would only affect couples with estates over $1,748,000 but would give us enough money to pay for universal preschool and two free years of community college for all eligible students.

The cuts for needed government services and extra loopholes and tax benefits for the rich never end. In last year’s Farm Bill, Congress pleaded poor to cut food stamps by $8 billion while increasing annual subsidies up to $15 billion for wealthy farmers and large agriculture corporations.

It’s gotten so bad, now Congress holds desperately needed government funding bills hostage, forcing through extra perks for the superrich.

The Republican budget passed by Congress in the spring of 2015 would have cut health spending by $400 billion, throwing 27 million Americans off health insurance, cut Pell grants by $90 billion, massively cut nutrition programs including WIC for pregnant women, while giving over $250 billion more in tax breaks to the richest 2/10ths of 1%.

Decades of ferocious lobbying has created a tax code riddled with loopholes for the rich and corporations, with a maze of tax shelters, tax credits, and subsidies.

For example, in 2010 alone, more than 1,500 millionaires paid no income tax. Even companies like Exxon Mobil, Verizon, General Electric, Boeing, Citigroup, Wells Fargo, Fed Ex, and Fox News pay no taxes at all in some years.

Both corporate profits and stock prices have hit record highs but effective corporate tax rates are near a 60-year low. In 1943, corporations paid 40% of all the government’s federal income tax revenue. By 2009, corporate income tax only paid 6.6% of all federal revenue, making taxes worse for all of us ordinary Americans.

As corporations pay less and less, ordinary Americans have had to pay more and more. In 1950, payroll taxes made up just 11% of all federal tax revenue. Now our payroll taxes make up 35% of all federal tax revenue.

Now employees pay far more of the taxes than companies do, while companies pay less than we ever did. Corporations use tax shelters, zero out their balances, hide profits overseas, and funnel all the profit to their senior executives and Wall Street.

The retirement accounts, stock options, and many hidden bonuses of CEO and senior executive packages drain the finances of the companies, allowing them to create operating losses, avoid taxes, and plead poor and cut worker health and retirement benefits.

Experts document US-based companies are holding $2.4 trillion in profits in offshore accounts, avoiding up to $695 million in taxes.

For example, Pfizer, the maker of Viagra, claims its profits in in Liechtenstein, where there is no tax. A deferral loophole allows companies to pretend their profits are offshore even if they invest the same profits in Treasury bonds or in the stock of other companies.

Research shows 372 of our Fortune 500 companies ooperate 7,827 tax haven subsidiaries to avoid taxes. These include Apple, Google, Microsoft, Exxon-Mobil, Goldman Sachs, Bank of America, Citigroup, JP Morgan Chase, Walmart, McDonalds, Caterpillar, General Electric, Philip Morris, etc.

In fact, Verizon, General Electric, Priceline.com and 23 other large corporations paid no federal income taxes at all over a recent five-year period. Just 15 companies had $93.3 billion in profits yet paid no federal income taxes over the past 5 years.

After nearly destroying our economy with mortgage fraud, Bank of America, Goldman Sachs, Citigroup, and JP Morgan Chase took over $5 trillion in bailouts, while using 666 overseas subsidiaries to avoid taxes and get billions of dollars in tax refunds.

Apple uses a ghost company with no employees called Apple Operations International, based in Ireland, to avoid taxes. Irish law considers it an American company, while the US considers it an Irish company. By using this strange loophole, it has paid no taxes to any government on $137.70 billion in profits between 2009 and 2014.

Our top 50 companies are holding $1.4 trillion untaxed offshore. Between 2008 and 2014, these same companies spent $2.6 billion lobbying and received $11.2 trillion in federal loans, bailouts, and loan guarantees (corporate welfare).

In early America, corporations were limited to short terms, renewable only if they continued to serve the public good. We’ll examine this in detail and suggest more sensible policies for corporations later on in the book.

Over the centuries, our superrich have turned our corporations into legal business forms for large-scale tax evasion and for escaping personal financial responsibility for crimes and environmental damage.

Lawyers are finding it impossible to sue nursing home chains for severe abuse of elderly people because the layers of corporate ownership leave few assets at the first level, with the higher layers offshore.

Corporations often use subsidiaries to escape responsibility for environmental destruction. They lobby ferociously to weaken and escape safety standards and hire unethical scientists to produce fake research pretending cancer-causing chemicals like pesticides are safe.

Now corporations and the superrich often get away with truly horrific crimes. Many major banks, both US and foreign, including JP Morgan Chase, Citigroup, Bank of America, American Express, Wachovia (now part of Wells Fargo), Union Bank of California, Florida’s BankAtlantic, HSBC, Barclays, and Lloyds, break the law regularly.

They have financed the drug trade by laundering drug cartel money, laundered money for rogue states, terrorist organizations, and corrupt dictators, illegally price-fixed markets, and committed securities fraud.

Perhaps the most obscene example is Richard Fuld, CEO of HSBC, the biggest bank in both Europe and England. HSBC admitted laundering money for Russian mobsters, for terrorist-connected organizations in the Middle East, and for rogue states sanctioned by our government.

HSBC also admitted laundering $850 million for two drug cartels, including the Sinaloa drug cartel in Mexico suspected in thousands of murders, yet no HSBC executive lost any money or went to jail for even a day.

HSBC also helped destroy our economy in the recent recession with subprime loans and deadly debt. Even so, Richard Fuld, the CEO of HSBC, got a raise of 74% and walked away from all this with between $300 and $500 million dollars.

When a Senator asked Dept. of Justice Attorney General Eric Holder why he didn’t indict HSBC, Holder argued prosecuting these large institutions “will have a negative impact on the national economy, perhaps even the world economy.”

Wachovia, owned by Wells Fargo, admitted in court in 2010 it ignored warnings by regulators and police, failed to monitor more than $420 billion in potential money laundering as required by law, and failed to report suspected money laundering by narcotics traffickers from 2003 to 2008, including the cash used to buy 4 planes that shipped a total of 22 tons of cocaine.

For helping Mexican drug cartels known for massacres and cutting off people’s heads, Wells Fargo paid a fine of $160 million, less than 1.5% of its $12.3 billion in profits in 2009. Our government never even indicted any executives at Wachovia for the money laundering.

Why? One Senate investigator admitted the reason to Bloomberg News: the company was too big to threaten with failure. Wells Fargo also received $8 billion in tax breaks, paying no taxes at all between 2008 and 2010!

In 1994, American Express Bank International paid a fine of $14 million for laundering drug money. In 2007, the same bank paid a fine of $65 million and admitted failing to stop the laundering of $55 million in money from narcotics.

The government also caught Union Bank of California and Florida’s BankAtlantic laundering huge sums of drug money, but nobody went to jail.

If a regular person laundered money for drug cartels or terrorist organizations in tiny fractions of the amounts these banks did, our government would aggressively prosecute and imprison the person for many, many years.

All these banks just admitted criminal conduct and paid the government a tiny cut of their profits. Very often, corporations can deduct their fines from their taxes as business expenses.

For example, BP had to pay over $20 billion in fines and claims for its 2010 oil spill that killed 11 people and dumped nearly 5 million gallons of oil into the Gulf of Mexico. Yet our foolish tax code allows BP to call the worst oil spill in American history a normal business expense and to write off $15 billion of the settlement on their taxes.

Of course, banks are not the only rogue industries. For example, the coal mining company Massey Energy violated the Clean Water Act over 60,000 times between 2000 and 2006 alone.

Our government allows thousands of mining companies with poor safety to continue to making millions of dollars even after deaths, even when they ignore paying their fines, and even after further injuries.

For example, Ralph Napier Sr. still hasn’t paid $2.9 million in fines for his mining companies, including $500,000 for the Kentucky Darby mine explosion that killed 5 men. In fact, he has mined over $89 million worth of coal while ignoring his delinquent fines.

In our economic crisis, large banks, private equity firms, and hedge fund managers committed rampant fraud that nearly destroyed the global economy. The financial collapse destroyed more than 8 million jobs in just a few months. Families lost nearly $7 trillion of home equity and over 5 million people lost their homes.

The collapse also devastated the retirement pensions for average workers like teachers, firemen, and police. One study found pension funds would be strong today if they hadn’t invested in the stock market and bought mortgage-backed securities.

First, the Wall Street banks and giant firms targeted low income, ethnic minority, and elderly people for incredibly bad mortgage loans with higher, often escalating interest rates and perhaps no chance of refinancing.

In 2006, African American households earning more than $200,000 a year were more likely to be given subprime loans than white households earning just $32,000.

According to a lawsuit filed by Baltimore against Wells Fargo, their mortgage brokers referring rich blacks for subprime loans talked about “mud people” and “ghetto loans.”

During the feeding frenzy, Wells Fargo sent its top mortgage sellers for free vacations to Cancun and the Bahamas and gave them private performances by Aerosmith, the Eagles, and Elton John.

WMC Mortgage Corporation, owned by General Electric, hired former strippers and an ex-porn actress to lure brokers into selling their mortgages. New Century sent top sales reps to Porsche driving school.

Our government bailed out these banks and other companies with $16 trillion from us taxpayers. Unlike most other countries, we didn’t even stop the executives who caused the problem with their rampant fraud from paying themselves massive bonuses with the bailout money on top of their massive salaries.

No senior executive faced prosecution for their crimes. Giving executives long jail sentences for illegal behavior would surely help a great deal in discouraging corporate crime.

We didn’t even force the banks to return homes they fraudulently foreclosed, nor to give up money they got through forgery or perjury. We let them destroy people’s credit through fraud, without any restoration of the credit ratings.

Jamie Dimon, the CEO of JP Morgan Chase, was quoted in Fortune magazine in 2008 making comments as early as 2006 about how dangerous their mortgages were—“liar’s loan” mortgages in which people could say they made enormous incomes and nobody would bother to check.

Mr. Dimon even said to his underlings, “We’ve got to get out of these investments, because this whole thing can go up in smoke.” Even so, they pretended the investments were very sound and kept selling them.

Testifying in front of Congress in 2010, he lied and claimed he had no idea the mortgages were bad. In just the last 4 years, JP Morgan Chase paid $29 billion in fines for fraud and illegal activity.

We can’t deduct criminal fines from our taxes, but corporations can deduct many billions of dollars this way, which means us taxpayers actually pay large portions of their criminal fines.

And much of the $4 billion of the fine devoted to consumer relief actually comes from investors who bought the loans, not JP Morgan Chase bank.

CEO Dimon never got charged with a crime and never paid a cent. Stockholders paid but the sweetheart deal was so awesome, JP Morgan Chase’s stock values skyrocketed by about $12 billion after the settlement. Just a few weeks after the deal, CEO Dimon got a 75% raise, bringing his total compensation to $20 million.

For our major banks, crime does pay—very well, in fact! We should have forced the banks, private equity firms, and hedge fund managers to refinance mortgages down to their fair market value, in return for the bailout.

Instead, these companies devastated communities by foreclosing on millions of struggling homeowners, refusing to refinance them.

They refused to help us, even though they sell mortgages to each other all the time at fair market value and even though they force their own creditors to lower and refinance their loans when they get in trouble because of changes in the market.

These Wall Street firms got bailed out 100% on their losses during the crisis. There is no justification for their vicious, predatory greed.

And now they’re making money by helping US companies set up headquarters in countries with low taxes to avoid paying taxes here.

Wall Street is also tapping the $2.6 trillion states have in pension funds, hurting police, teachers firefighters, etc. Finance firms, sometimes using campaign donations to those in charge, are convincing pension funds to invest in hedge funds, venture capital funds, and private equity firms—extremely high-risk investments—in order to get higher returns.

Often, the pension cuts actually pay the fees for these investments, taking money from retired police and teachers and giving it to Wall Street billionaires.

For example, Rhode Island froze their cost of living adjustments for their retirees and the money frozen is approximately equal to the fees the state is paying hedge funds. Very often, the hedge fund refuses a state’s pension money unless the state makes an exemption to Freedom of Information requests for hedge funds, so workers can’t find out where the state has invested their money.

States are short a total of $46 billion a year on their pension payments. Meanwhile, as states plead poor and blame “exorbitant” pension plans for government workers, they continue to spend up to $120 billion a year on offshore tax loopholes and gifts and subsidies to large corporations.

Banks like JPMorgan Chase and billionaires like the Koch brothers have kept 200,000 ton fully-loaded oil tankers anchored at sea in order to keep millions of barrels of oil off the market for months at a time, forcing prices to rise while they wait for better profits.

Some thirty barrels of oil are traded for every barrel produced, as the rich manipulate the financial paper market of oil derivatives. Experts believe this oil speculation costs Americans $2 billion a year and creates unstable price swings.

Too-big-to-fail banks have bought warehouses and companies that operate our ports and are manipulating the prices of many commodities like electricity, heating oil, natural gas, uranium, copper, aluminum, zinc, precious metals, coal, wheat, cotton, and coffee. They’ve held supplies off the markets to artificially increase the cost of our beer and soda cans, nails, etc.

For example, companies like Goldman Sachs and JPMorgan Chase hoard aluminum in warehouses to boost prices, affecting the prices of beer and soda cans, etc. Workers in warehouses report being paid to move 1,500-pound aluminum bars back and forth from one warehouse to another, to delay real shipments and charge more rent.

Industry executives and analysts believe this merry-go-round of aluminum has cost American consumers more than $5 billion over the last 3 years.

Many believe a ruling that allowed banks to trade commodities should be reversed. In 2014, the Federal Reserve proposed restricting banks’ activities in commodities. Lawmakers and federal regulators are studying whether banks should be allowed to own and control power plants, oil refineries, and pipelines.

One federal regulator said, “I don’t want a bank owning electric service, or cotton, corn, or feedlots. I don’t want banks owning warehouses, whether they own aluminum, gold, silver, or anything else in them.”

Major banks have been making billions of dollars by manipulating financial instruments and commodities we all use. In the Libor Scandal, 16 too-big-to-fail banks have been accused of manipulating interest rates tied to $300 trillion in financial instruments such as mortgages, car loans, student loans, and derivatives.

Three of the banks have already paid fines totaling $2.6 billion in the Libor Scandal, but large cities are suing and untold millions of Americans and many investors and pension funds have lost money.

Companies are also stealing wages. The US Department of Labor found more than 300,000 workers in New York and California alone are victims of minimum wage violations each month.

The federal minimum wage for tipped workers is only $2.13 but companies are supposed to make up the difference between that and the federal minimum wage of $7.25 if their employees don’t make that much.

Many bosses ignore this rule, so 10% of tipped workers like food servers, bartenders, table bussers, and nail salon workers don’t even make the minimum wage. This is another kind of wage theft, leaving female tipped workers with almost 3 times the poverty rate of other workers.

Despite record profits in the restaurant industry, many of the table wait staff can’t afford to eat at home. Those who serve food all day rely on food stamps at almost twice the rate of other Americans.

Our too-big-to-fail banks break the law over and over again, cheating homeowners, consumers, credit card holders, investors, and American soldiers.

Often they break same laws they’ve paid fines for and promised not to break again. They’ve violated US trade laws, illegally foreclosed on homeowners, illegally fixed the prices in markets, committed securities fraud, perjured themselves in court, and bribed their way to profits.

According to Nobel Prize winning economist, professor, and previous Senior Vice President and Chief Economist at the World Bank Joseph Stiglitz, recent corporate scandals have involved “virtually all of our accounting firms, most of our major banks, many of our mutual funds, and a large proportion of our major corporations.”

In fact, an analysis of SEC fraud settlements found 51 cases where 19 companies broke fraud laws that they had previously agreed never to break again. Bank of America and Citigroup violated the same fraud laws 6 times and Merrill Lynch and UBS have had 5 repeat violations, despite all their promises.

These banks get fines far too small to have any effect on their massive profits. Banks get away with repeatedly breaking the law and cheating us because in the last election cycle, Wall Street banks and financial interests spent over $1.2 billion on lobbying and campaign contributions.

If not for this, we would simply use our tried-and-true monopoly laws to split up the too-big-to-fail banks and punish and fine them enough for crimes to seriously impact their profits.

We have massive corporate welfare in our economy. The most obvious example is the $16 trillion in bailouts we gave our largest banks and other companies. If we had used this money to help average Americans, we’d be living in a paradise!

In the petition for free college, we saw how for-profit colleges, often owned by private equity firms or hedge funds, are sucking up over $30 billion of our taxes in corporate welfare and dragging our economy down with massive student debt. Very often, they use fraud and charge ridiculous prices for online courses for useless degrees.

In the petition for free medicines, we saw how pharmaceutical companies get all kinds of corporate welfare, from the government research leading to medicines, handed to them for free, to the patent laws that protect their profits, the law restricting Medicare from negotiating prices, and the absence of laws limiting their greed.

In similar ways, the fossil fuel industry has used large campaign donations and lobbying to acquire massive subsidies and tailored industry-friendly laws.

For example, US Representative Fred Upton, chair of the House Energy Committee, and Senator Lisa Murkowski, chair of the Senate Energy Committee launched a joint fundraising committee to collect campaign money in the summer of 2015 from the very industries they were supposed to regulate.

By December 2015, they had received over $168,000 from the oil and gas industry and 9 other members of their energy panels had also received large industry donations.

In return, they’ve introduced and passed bills making it easier to establish new pipelines, make it harder for state and local government officials to review potential environmental impacts, and lifting the ban on exporting US oil.

Often, these energy committees introduced the business-friendly bills the day after huge industry donations. Upton’s family also benefitted greatly. His wife owned between $100,000 and $250,000 worth of Exxon Mobil stock.

Our cities and states often bid against each other to attract corporations with cash handouts, building and land transfers, roads and rail spurs, tax cuts and rebates, discounts on electric and water bills, subsidies, and by building roads and infrastructure.

Often, the company soon leaves for better pastures, perhaps offshore. State and local governments alone have awarded at least $110 billion in taxpayer subsidies in the last 2 decades to massive companies like IBM, Boeing, Alcoa, Intel, General Motors, Ford, Google, Yahoo, Koch Industries, Goldman Sachs, Bank of America, and Citigroup.

Fortune 500 companies got over 16,000 subsidies worth $63 billion of the $110 billion. Koch Industries got 88 million from state and local governments.

In fact, 8 of the top 20 companies receiving subsidies, 20 were foreign companies. And many of the subsidies don’t actually create jobs. One large software firm got $75 million from Rhode Island at the same time the state claimed to be so poor it was cutting benefits for its public workers’ pensions.

Another example of corporate welfare is our $27 billion each year in subsidies for coal, oil, gas, and nuclear companies, some of the richest companies in the world.

We’ve given them over $6 trillion since 2007, even though these businesses cost us $120 billion in damage from air and other pollution each year, such as heart disease, lung disease, and cancer. This doesn’t even count harm to ecosystems and the effects of some toxic air pollutants.

We massively subsidize the Koch billionaire brothers’ coal empire. By law, unlike any other business, coal power plants can legally pollute our rivers. They dump 80,000 pounds of arsenic and 65,000 pounds of lead every year. Air pollution from coal results in the deaths of 14,000 people a year.

Our government also subsidizes corporations by allowing them to have huge market monopolies. Over the decades, the superrich have weakened our antitrust laws to the point where we never break up monopolies that corner the market and collude to keep prices high.

For this reason, Americans pay far higher prices for things like phones, health care, banking services, cable TV, internet service, and airplane tickets than people in many other countries.

Most Europeans have far more choices for internet service and far better prices than we do. In the 1990s, our internet companies lobbied for higher pricing and tax deductions, promising to build fiber optic lines nationwide.

After collecting their tax breaks and $400 billion over the last few decades, these companies never bothered to build the vast majority of the promised fiber optic cables.

Instead, they just gave most customers DSL over their existing copper cables, kept pushing prices higher and higher, and made ever-increasing profits.

Our airlines consolidated from 10 major carriers 10 years ago to 3 today and in this monopoly system, ticket prices haven’t gone down despite far lower fuel costs.

Because of lobbying and political corruption, our government has given massive corporations longer patents and copyrights, it often allows insider trading, and it reduced its prosecution for white-collar crimes.

As we have seen, large pharmaceutical companies profit immensely from government research. Similarly, our defense department created GPS, touch screens, and the internet, yet we’ve given companies like Apple, Microsoft, Google, and Facebook patents and monopolies that make billions of dollars on taxpayer-funded research.

In America, 4 giant companies control 82% of beef packing. Yet our farm bill spends billions of taxpayer dollars subidizing extremely profitable agribusinesses like Tyson’s Foods, Riceland Foods, and Pilgrim’s Pride.

Our farm bill also makes sure very wealthy farmers never get less than 86% of their recent record high crop prices. No other business in America gets this guarantee of secure income.

We spend over $1 trillion a year on national security and defense, if you include our nukes, military retirement costs, homeland security, veterans costs, and military aid. We have 16 separate intelligence agencies alone.

Our government now plans to spend up to $1 trillion on a new generation of nuclear warheads, bombers, submarines, and missiles. This is a huge change, as every previous president for decades past wanted to eliminate nukes.

Military studies conclude we have no use for nuclear weapons in any of the major 21st century problems we face. We already have 7,000 nuclear warheads, far more than we need. A few hundred is enough to deter any other nation from attacking us with nuclear weapons.

Scientists argue we can cheaply maintain deterrence by refurbishing our old nukes and that designing and building new nukes would undermine efforts to limit nuclear weapons in countries like North Korea.

Our military consumes 47% of all our federal income taxes. It uses our tax dollars for hidden, no-audit contracts with a maze of private corporations, in cost-plus terms that guarantee a high profit no matter how inefficient or over budget the projects go.

The Department of Defense (DOD), which spends over $500 billion a year, is the only major federal agency that has not completed a financial audit, despite a 1990 law requiring it. Over 25 years later, there’s no evidence the Pentagon will ever be able to pass an audit.

The DOD has not accounted for the $12 trillion Congress gave it since 1990, despite spending billions of dollars on failed accounting software.

It hides non-war spending in our war budget—the Overseas Contingency Operations account. The Pentagon contracts over 641,000 civilians, very often to do jobs our military service members could do themselves.

In fact, our military is an entrenched bureaucracy that disguises its spending in a complex maze of secret funds and programs, in order to escape any real control of its budget.

With all its secrecy and no reliable paper trail, Congress, the president, and the American people cannot hold the Pentagon accountable for how it spends our tax dollars.

The DOD estimated it made $213 billion in improper payments. It also couldn’t account for more than $300 million each year in Afghanistan and lost $500 million in weapons in Yemen, possibly to Al-Qaeda or Iranian-backed rebels. The Pentagon spent $1 billion to destroy $16 billion worth of ammunition it didn’t need.

The truth is, the Pentagon doesn’t even really understand the scope of its own problems. The way it is now run, it is unaudited and unauditable. It spent $43 million to build a gas station in Afghanistan that should have cost $500,000.

Congress often adds to the defense budget weapons the military doesn’t want or need just to benefit their home districts. Military planners distribute contracts to as many states as possible, not for efficiency, but to make sure as many congressional districts as possible want that business.

Because of government corruption, we waste tens of billions of dollars to build planes, tanks, ships, drones, and bombers that the Pentagon doesn’t want, like the U-2 spy plane, the A-10 Warthog, the EA-18 Growler warplane, and Long Range Strike Bombers.

For example, we never used our F-22 Raptor fighter planes in Iraq, Afghanistan, or Libya, top government officials consider it obsolete, and the Pentagon has said it doesn’t want it. Secretary of Defense Robert Gates criticized its usefulness and along with President Obama, tried to block the production of 60 more of them.

Even so, both Democrats and Republicans fought to fund production of the F-22, simply because companies in 44 states make it, giving 88 senators a piece of the pie. In fact, Congress insisted on building 187 F-22s, at a cost of at least $67 billion.

For the same reason, a piece of the B-1 bomber was made in every single US state. So, too, the problem-plagued B-2 bomber had subcontractors in 46 states and in 383 of 435 Congressional districts.

Our Air Force requested only five C-130 Hercules transport planes between 1978 and 1998, yet Congress bought 256 of them from Lockheed Martin, likely a record in lobbying and pork-barrel politics.

The Pentagon’s F-35 fighter plane program has a projected cost of $1.5 trillion, but a retired plane-testing engineer for the Pentagon called its engine “a blowtorch surrounded by fuel” and a popular military blog called it “dead meat” in a dogfight.

Tests show hitting the F-35 with ammunition causes it to blow up, so it can’t go within 25 miles of bad weather for fear of lightning. Tests also found it maneuvers far worse than the F-16 and F-15E, both 20 years old. One F-35 caught fire on takeoff. Government reports call its failures “catastrophic.”

The Pentagon spent $486 million for 20 planes for Afghanistan’s Air Force, then scrapped 16 of them. In 2013, our government decided to retire the Global Hawk surveillance plane, then Northrop Grumman began an aggressive lobbying plan. By 2015, they won $4 billion to modernize the plane.

Our 2014 budget gave the military $479 million for war planes the Pentagon didn’t ask for. Our December 2015 budget included $640 million for a National Security Cutter the Coast Guard doesn’t want and $1 billion for a Navy destroyer that our military says they don’t need.

Army Chief of Staff General Raymond Odierno said the Army spends “hundreds of millions of dollars on tanks that we simply don’t have the structure for anymore.”

Often, we leave the unneeded planes or tanks parked in deserts as soon as they are made, like the dozen new cargo planes (C-27J) costing $567 million parked in Arizona. This same desert complex holds an estimated $35 billion in planes with no use.

The Pentagon paid $3 million for 8 patrol boats (with a normal total cost of $585,000) for landlocked Afghanistan that still sat in storage in Virginia 4 years after their purchase.

The Pentagon spent $34 million for Camp Leatherneck military headquarters in Afghanistan, a 64,000-square-foot facility that the Marines didn’t want, only to leave it empty and unused to this day.

The companies building the unnecessary equipment spend millions lobbying and contributing to political campaigns. In 2015 alone, over 700 defense industry lobbyists gave over $67 million to Congress to pressure them to continue increased weapon spending.

Besides the lobbying, the defense companies spend more money on public relations specialists, defense and aerospace advocacy groups, and supportive think tanks.

Congress won’t close military bases the Pentagon wants to shut down, including Guantanamo Bay. The Pentagon says it doesn’t need about 24% of its bases, buildings, and real estate.

Government-funded studies have found overseas bases don’t allow our military to deploy any faster on the whole than bases in the US. In addition to the speed of modern air transport, new technology can deploy weapons from our ships.

Even so, we are spending billions of dollars to renovate old bases and build new bases in Europe at the same time we eliminate other bases there.

We have over 800 bases in more than 70 countries, over 200,000 active-duty personnel in about 150 countries, and 170 golf courses!

Congress hasn’t even let the Pentagon establish a Base Realignment and Closure commission since 2005! We should audit the Pentagon and Defense Department like we do every other agency in the government.

Congress has constantly shoveled money at our military for decades, giving pay raises across the board, double pensions for many retirees, increasing generous benefits, etc.

Now we have a historically unprecedented, ridiculously bloated civilian and military leadership at the Pentagon. In the last several years, the Pentagon has brought more than 165,000 soldiers home from combat, yet the military bureaucracy has only grown larger.

Our military has become increasingly top-heavy—the army now has 4 times as many officers per soldier as we had in World War II. Since 9/11, the number of 3- and 4-star generals (top brass) increased 10 times as fast as the increase in enlisted military personnel.

Former Secretary of Defense Robert Gates often complained about the bloated bureaucracy, once talking about coordination problems resulting from as many as 30 layers of bureaucracy between him and an action officer.

One expert testifying in Congress on the Pentagon’s top-heavy command structure noted a commercial satellite company might have 10 people in headquarters doing what over 500 people do in an equivalent military setting.

Robert Gates also noted the chairman of the Joint Chiefs of Staff working under him had perks he didn’t, including a chef, a personal valet, and troops to tend his property.

Military commanders have executive jets, palatial homes, gourmet chefs, drivers, security aides, and people to carry their bags, press their uniforms, and monitor their schedules. If they want music for their dinner parties, their staff can produce a string quartet or a choir.

Top generals get free housing, subsidies for food and uniforms, and tax benefits. General William Ward spent hundreds of thousands of taxpayer dollars for private travel, including taking his wife shopping or to the spa with military vehicles.

Admiral James Stavridis used a military jet to fly to France for a dinner with an international wine club. When David Petraeus was a 4-star general, he once went to visit socialite Jill Kelley at her mansion with an escort of 28 police motorcycles.

Military pay and rank has very little to do with good work. For example, the general in charge of the $500 million program to train 5,000 Syrian soldiers to fight ISIS actually produced only 4 or 5 soldiers, plus a few who defected with their equipment. Even so, the Pentagon rewarded him with a star and a promotion.

Military pay and fringe benefits have increased 52% since 9/11, more than twice the increase seen in the private sector in that time period.

Retired Marine major general and defense analyst Arnold Punaro says our Defense Department is turning into “a benefits company that occasionally kills a terrorist.”

Every time a military service member dies on active duty or while traveling to or from active duty, the family gets $100,000 tax-free, plus many other benefits.

Top military officials can earn more pension than they ever earned in salary. For example, a 4-star general with 40 years of service whose maximum salary was $180,000 while working can receive a pension of $237,000 a year.

Even after David Petraeus illegally gave highly classified material to his mistress and broke the law by lying to the FBI, the military never demoted him, so he gets a full, 4-star pension in retirement.

Most of our $1 trillion each year in military spending is very dangerous corporate welfare that spreads misery and destruction all over the world.

This money could easily fulfill all our petitions for American prosperity and bring world peace with clean water, food, medicines, and education worldwide.

The fact is spending money on health care, education, and clean energy creates far more jobs across all pay ranges than does military spending, even creating far more jobs paying between $32,000 to over $64,000 a year.

For example, investing $1 billion in education creates 151% more jobs than investing the same amount in the military. Health care, research, technology, education, and infrastructure are wise investments that are much more likely than war to lead to economic growth.

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