From the trailer, I can tell that this is not a movie I will enjoy seeing. Invariably, I am sure I will watch it and write about it here because I do enjoy writing about tax policy and tax reform.
The movie’s billed as follows:
WE’RE NOT BROKE tells the story of U.S. corporations dodging billions of dollars in income tax, and how seven fed-up Americans take their frustration to the streets…and vow to make the corporations pay their fair share.
From the scenes depicted, it doesn’t look like it offers a serious and thoughtful dialogue on our tax code: what it is, and how it got to be the way it is. The film makers are not tax experts. And while I caution against overly trusting tax experts, since they profit most from the code’s complexity, people who aren’t tax experts don’t have a history of making good movies about taxes or espousing rational fixes.
I think Alec Baldwin’s tweet of support pretty much confirms this:
Watch this movie and it will indicate why I support the spirit of OWS, if not every action.
When I think of brilliant tax minds, the very first who jumps into my mind is Alec Baldwdin.
The film makers have jumped on and supported a bill by Sen. Levin called the “Cut Unjustified Tax Loopholes Act” — which is just a wordy and complicated attack on the territorial aspects of our tax code. Levin and others tend to support a “worldwide” system of taxation, which subjects foreign earnings to U.S. taxes. We are one of the few countries in the world that still have this tax system.
I don’t deny that corporations try to minimize their tax bill, but given a whole world of alternatives, is it really in our best interest to pursue policies that are likely to encourage them to take further action to that end? Obviously not. The goal is to reform the tax code in a way where they are less likely to do that.
But what I wanted to post is this scene from the trailer with some commentary by yours truly. In the scene below, people are saying they pay their taxes, so why isn’t Bank of America?
Well, no, collectively the odds are they all don’t pay their taxes. Maybe it’s possible 100% of the people in the picture do, but the statistics aren’t in their favor. Between 41% and 50% of individual filers either owe no taxes or receive money back beyond what they actually paid in taxes.
The reasons why people owe no income taxes are complex. From the Earned Income Tax Credit, to the Child Tax Credit, Mortgage Interest Deduction, buying a home (since expired) or a hybrid, or even simply writing off investment losses — there are a multitude of reasons why a significant portion of income earners don’t actually pay income taxes.
Just as conservatives are wrong to broadly malign those who owe no taxes, liberals are wrong to make similarly broad assumptions about corporations. The best remedy is to have a serious discussion on the history of the provisions, examining why they were enacted. Failing to do so is violating the fallacy of Chesterton’s fence.
In the matter of reforming things, as distinct from deforming them, there is one plain and simple principle; a principle which will probably be called a paradox. There exists in such a case a certain institution or law; let us say, for the sake of simplicity, a fence or gate erected across a road. The more modern type of reformer goes gaily up to it and says, “I don’t see the use of this; let us clear it away.” To which the more intelligent type of reformer will do well to answer: “If you don’t see the use of it, I certainly won’t let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it.”
This paradox rests on the most elementary common sense. The gate or fence did not grow there. It was not set up by somnambulists who built it in their sleep. It is highly improbable that it was put there by escaped lunatics who were for some reason loose in the street. Some person had some reason for thinking it would be a good thing for somebody. And until we know what the reason was, we really cannot judge whether the reason was reasonable. It is extremely probable that we have overlooked some whole aspect of the question, if something set up by human beings like ourselves seems to be entirely meaningless and mysterious. There are reformers who get over this difficulty by assuming that all their fathers were fools; but if that be so, we can only say that folly appears to be a hereditary disease. But the truth is that nobody has any business to destroy a social institution until he has really seen it as an historical institution. If he knows how it arose, and what purposes it was supposed to serve, he may really be able to say that they were bad purposes, that they have since become bad purposes, or that they are purposes which are no longer served. But if he simply stares at the thing as a senseless monstrosity that has somehow sprung up in his path, it is he and not the traditionalist who is suffering from an illusion.
Just as individuals can owe no taxes for seemingly complex reasons, the same can be said of corporations. Whether it’s carrying forward losses, taking advantage of tax credits or deductions (like green energy!) there is not a simple way to determine whether or not a company’s tax bill is “fair” or not. Especially since “fair” is such a subjective term that has become a code word by the left, even if undefined.
And, my math is wrong and Congress made a mistake, they’re not “loopholes.” We need to stop using this term if Congress and the President made a conscious decision to make these policies law. True tax loopholes, ones that are mistakes, are more rare than you might think. Disliking the law or how people respond to it and other aspects of the law does not justify use of the term “loophole.”
One thing is for sure, we desperately need tax reform. However, if it’s along the lines of what Levin, Sanders and others are offering, count me out.
The film’s trailer features Sen. Sanders — The Democratic party has far better thinkers on tax policy than him. If Bernie Sanders can’t stand the thought that museum trinkets are made elsewhere, I tell you, I am sure his solutions on international tax policy will be equally backwards. In short, I highly doubt that if you care seriously about tax issues, this movie will be for you.
However, if you’re like my grade school classmate, and want something to get angry about something without being open to a discussion about it, I bet you’ll like it.
Further critique forthcoming.