20130829: Documentary Review--We're Not Broke

We're Not Broke

1. Feature length film, documentary, 2012, 80 minutes, NR,
2. IMDB: 6.2/10.0 from 111 users
3. Rotten Tomatoes: 'No score yet,' and 82% from 37 audience responses
4. Directed and written by: Victoria Bruce and Karin Hayes.
5. Multiple examples of corporations making billions of profits (not revenues, but profits) that pay zero ($0.00) in taxes in the US: GE, Bank of America, Exxon, Chevron, Citigroup, and so on.
6. Some of these companies received huge bailouts, from 500 billion USD, to 2.5 trillion USD total.
7. The film asserted that the percentage of US federal tax collected from US corporations today is less than one half of the percentage that they paid in 1961.
8. The title We're Not Broke comes from the assertion that many corporations are paying zero taxes, and many others are paying negligible amounts.  The public services cuts we've seen (libraries, cops, teachers, firemen, and so on) are unnecessary: there's money to be found the old-fashioned way.
9. US corporations pay taxes on US earnings; these are taxed at 35%.  Through various loopholes and offshore nonsense, the effective tax rate is more like 20% down to 0%.  Cayman Islands 'offices', Swiss 'headquarters',  Bermuda 'law offices', and so on allow the corporate money made in the US can get booked as offshore, where corporate tax rates are significantly lower.  This sort of process was called 'transfer pricing.'  Example: Google shifted some profits to Ireland, so 35% rate ==> 12.5% rate; then there was a second shift of Ireland's money to Bermuda, so there was another steep reduction, 2% I think.  Google cut its tax liability by billions using this technique.  Facebook seems to be setting up to do the same.
10. Profile of the actions of the Usuncut.com movement using social media, both the good and the illegal.  The support of law firms and accounting firms give to corporations to keep the effective tax rates low.  As one commentator put it in the film, 'non-taxation through extraordinary representation,' including lobbying money.
11. Clinton administration versus Bush administration versus Obama administration in terms of tax revenue versus spending.  All of this comes back to the initial issues: lack of revenue from corporations that are making record profits.  Even Obama is not spared from this criticism; he seems to have disavowed his 2008 campaign promises regarding getting corporations to pay more taxes.  The lack of revenues has been made up for by borrowing from the Chinese and Japanese at low interest rates.
12. In 2004 and 2005, the Bush administration signed a bill to 'repatriate' corporate profits.  The moneys came back (Ford, Pfizer, Merck, Apple, and so on), but once back, the corporations fire thousands of employees and use the savings to buy back stock, which increases corporate profits.
13. What to do after the repatriation debacle?  The push today is to make the tax code even more favorable to large corporations.  Other countries have dropped their corporate tax rates (there was a sort of race for this), but it did them no good.  Corporations still shuffled things to places like Bermuda.  Most of these countries (and the US) are in trouble with too little tax revenue.
14. Four stars of five.

Cinematography: 6/10 Not a strong point.

Sound: 10/10 No problems.

Screenplay: 8/10 The number of points to be made was small (good), and the points were brought home well enough.  The central issue is danced around enough. We need the political will to change the tax laws to close the loopholes for corporations.  Compared to other countries, we do not have a high tax rate; this is particularly true for corporations but also applies to individuals.

Since the film came out, the Occupy movement has been completely shutdown, and there has been no talk of tax reform in 2013 so far.