Europeans pay much higher taxes than the US and they have come to expect and deserve higher levels of services, like health care, for example and higher education. So tuition hikes and restricted services proposed within a new austerity program have generated the appropriate uproar and Europeans have taken to the streets in a big way to protest government handling of the debt crisis.
Europe’s sovereign debt crisis is beyond the scope of this article and its author but corporate tax loopholes play a definite part. For example,, as rioters took to the streets in Belfast, “Google Inc. cut its taxes by $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda”.
Working through the dilemma seems to boil down to two opposing philosophies. Dominique Strauss-Kahn managing director of the IMF (International Monetary Fund) ties managing the crisis to the common currency and submitting to the rules imposed by a centralized banking system.
“The institutions are still thinking too local when they’re facing global problems.”
But aside from boosting the European Central Bank’s access to capital and tightening their fiscal belts, Strauss-Kahn called for a fiscal union within the euro area, a proposal that has stirred some controversy.
“When you have a single currency, you need to have more coordination in economic policy. In the French wording, it’s called economic government,” he said.
Conversely, some countries are politically opposed to giving over local budgetary control, Germany amongst them. Ascribing to the centralized model puts into place a ‘too big too fail’ scenario wherein sovereign control succumbs to outside pressures, despite better judgment, out of fear of collective collapse.
Riots in Ireland, England and Greece reflect local frustrations and it is at the local level where the austerity cuts are felt the deepest, and a fiscal impact study in the UK shows, will force a significant rise in child poverty.
Comparatively speaking, the individual American taxpayer has it easy. Maybe this explains the flaccid US response to extending tax cuts to billionaires who would still pay less than Europeans if the Bush tax cuts been allowed to expire.
Recently, Wilmington, OH, has been in the news again, thanks in part to Glenn Beck wrongly reporting the beleaguered community receives no federal funds. Wilmington, made 2003 headlines when DHL, after receiving a state incentive package valued at more than $422 million, chose Ohio over losing bidder, neighboring Kentucky, for its main hub operation.
Wilmington was again in the news when DHL received marching orders from its foreign parent company, Deustche Post, to cut their losses and pack up after less than four years. Wilmington was devastated.
Stories like Wilmington play out all over the US and examples are available in Coos County, Oregon, where an Australian owned strip mining operation, artfully named Oregon Resources (ORC), applied for and received five years of property tax exemption. ORC local management came from another Australian firm, Iluka Resources, operating in Brantley County, Georgia and lasted about as long as DHL did in Wilmington.
The amazing thing is that Europeans appear to be making the connection between their debt crisis and forced austerity and child poverty and are taking their complaints to the streets. Americans, on the other hand, haven’t quite made the connection yet.
That may change now that $858B in tax cuts must be paid for, as Americans may soon see austerity taking the form of severe changes in social security, medicare and jobless benefits. For the present, however, it seems that tax cuts are so built into the American psyche that even eight years of empirical data proving just how catastrophic they are, has failed to make a dent in local policy decisions or garner any public protest.
So far, there has been little street activism in the United States. Perhaps it is because of the Christmas shopping season, the inundation of entertainment shows and sporting events or just so little oppositional leadership, especially among Democrats unwilling to challenge a Democratic President who has just negotiated a compromise deal with Republican tax cutters.
Only one Senator, Bernie Sanders, the independent from Vermont had the guts to take on Barack Obama in an eight hour and 37 minute near filibuster speech that drove up the ratings of CSPAN, the congressional TV channel.
David Seth Michaels, a political blogger, commented that: “it was the most important political speech – by far – of the past two years. Seldom, if ever, has anyone seized the spotlight to discuss and examine so thoroughly the plundering of the nation by its wealthiest citizens.”
But his supporters did not pour into the streets, at least not yet. Sanders has been challenging what he calls his: “progressive friends” on these very issues. “I have long been concerned that some progressive activists do not stand up and fight effectively or pay enough attention to the needs of ordinary Americans,” he said.
When they do speak out, many prefer sending emails or organising Facebook pages. Where is the outrage and sense of solidarity or militancy? The unions are quiescent, the polls seem incapable of inspiring anyone. Has this generation been seduced by their Ipads and emails? Has everyone forgotten that call to get involved?
The following video demonstrates just how deeply entrenched and persistent is the mindset that enables bad, often disastrous tax policy to persist. These clips, taken from two public meetings in rural Oregon are reflective of what small, cash strapped communities everywhere are facing, from Wilmington, Ohio to Brantley, Georgia to Coos County, Oregon. While these problems may, in fact, be global, persisting everywhere, they will have to fought at the local level.
