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For several weeks I have researched programs in our governmental budgets and think I can nominate several programs to cut or reduce and allow the government to adopt the worthy programs that ordinary Americans need. As mentioned in previous commentaries, often politicians block needed programs by saying that they support the bill only if it can be “budget neutral” – we find programs to reduce to offset the bill.

So, I am writing  a series of commentaries detailing programs that are less important than those I support.  Today I will focus upon the Corporate Tax Dodges.  The American business world has become very creative in an effort to reduce their U. S. tax bill.  In my research, I found six popular tax dodges.  If I found six there are probably ten times that number.  I will highlight one that I personally observed.

In the United States, the Internal Revenue Service collects income tax on both individuals and some businesses.  This practice has existed for many years, however in the past twenty years corporations with some international business have moved their headquarters address to foreign locations that have little or no income tax.

I found numerous corporations who moved their official headquarters to a “mail box” in a foreign land.  Many chose Bermuda or the Cayman Islands (with the added benefit of an occasional vacation while picking up the mail).  I will detail two of those corporations.
Cooper Industries Inc.: Cooper Industries, a company that makes electrical products and tools such as light fixtures, moved from Houston, Texas to Bermuda in 2002.  Then while paying no income tax to America gained almost $4 million in U. S. government contracts. Part of their excuse for moving offshore was that they thought American companies were unable to compete against foreign corporations due to the tax.

Nabors Industries Ltd. the world’s biggest onshore oil and gas-drilling contractor, moved from Texas to Bermuda and Barbados in 2002. Nabors Industries earned $428.4 million  in profit in America three years after the move and would have paid $86 million in taxes on that money.

Many multinational corporations pay no taxes.  According to the Government Accounting Office  more than 60% of large U.S. controlled corporations had no federal tax liability each year between 1996 and 2000, while corporate profits soared. Most  foreign-based firms operating in the U.S. during that same time also paid no U.S. income taxes. According to Citizens for Tax Justice, “82 of 275 top U.S. corporations paid zero taxes between 2001 and 2003, while earning $102 billion in pre-tax profits.  The Citizens for Tax Justice also report “46 companies with a combined profit of $42.6 billion paid no federal income taxes in 2003 alone. Instead they received rebates totaling $5.4 billion.”

This is only one “dodge” – at least five others are tracked by the IRS (but no tax collected).   I can imagine how much healthier our federal budget would be if these tricky “dodges” can be stopped.

I think the fix is simple.  All corporations, foreign and American, should be required to  pay income tax on what they sell in the United States.  This “levels the playing field” that American business has noted, and still helps the U. S. Budget.

This is the second in my series suggesting sources of money for federal programs.

As I suggested in previous commentaries, there are a number of important programs  that are rejected by Congress unless someone can find another program to trade – - they call this “budget neutral”.  Congress has stopped many bills that our people need until someone finds the money.

So my second candidate where we can reduce our expenses and use them for a better program is drug enforcement.

First the problem.  Despite many years of attempting to control the use of drugs, the United States has failed the drug war.  According to WebMD, despite tough anti-drug laws, a new survey shows the U.S. has the highest level of illegal drug use in the world.

The World Health Organization  studied illegal drug use in 17 developed countries, including the Netherlands and other countries with less stringent drug laws than the United States.  The study revealed that Americans have the highest level of cocaine and marijuana use.  The report also observes that a high level of legal control makes little difference in reducing drug use.  Sixteen percent of Americans used cocaine and forty-two percent used  marijuana.  The Netherlands, which has more liberal drug policies than the U.S., only 1.9% of people used cocaine and 19.8%  used  marijuana.

Second the financial cost to society.  The government report “Economic Costs of Drug Abuse in the United States”  estimated that the costs to society of drug abuse is more than 160 billion dollars.  By the year 2000  Americans were spending an estimated $36 billion on cocaine, $11 billion on marijuana, $10 billion on heroin, $5.4 billion on methamphetamine, and $2.4 billion on other illegal substances. Authorities estimates  indicate that approximately 260 metric tons of cocaine and 13.3 metric tons of heroin a year were consumed by U.S. drug users by 2000.

Third the cost of law enforcement.   By 2000, the number of drug offenders in State prison increased to 251,100.  Drug offenders account for 20% of total growth in the State prison population.

The Federal prison population increased to 73,389 drug offenders in Federal prisons, of which 99.2% (72,775) had committed a drug trafficking offense.

By 2001, 55.5% of sentenced prisoners in Federal Bureau of Prisons (BOP) facilities were drug offenders. In comparison, in 1970 approximately 16% of BOP-sentenced prisoners were drug offenders.  By 2000  the overall cost of drug abuse to society was approximately reached $160.7 billion.

According to the BJS National Judicial Reporting Program, 195,183 people were convicted in State courts of drug trafficking in 1998. That same year, 119,443 were convicted of drug possession.  37.96 of all convictions were for drug use.

Now I do not like drugs and wish that other people did not have to suffer from such abuse as heroin addiction.  But the data suggests that we have failed this “war”, while creating serious problems in our attempt to control drugs.  I remember reading about “prohibition” and how the United States became alcohol free.  I also remember that criminals jumped in and made huge profits by importing alcohol and selling it through the black market.  Crime flourished while we attempted to control drinking.

In  my simple mind, if we could just make these drugs legal we could:

1.  Reduce our prison population – saving billions of dollars.

2.  Reduce the crime that is being imported into our southern states by super rich  foreign drug lords who profit from the “illegal” drugs sold in the U.S.

3.  Redirect our police forces to other crimes and reduce our rate of murder and theft.

4.  Treat these drugs as medicine and regulate the use.  This could lessen some diseases that result from ignorant use of needles.

5.  Tax selling drugs, which could improve our federal and stated budgets.

With the billions of saved funds, Congress could pass programs based upon how well they would help our people and our economy, instead of using the excuse that we do not have the money.  Who knows, there might even be enough for a tax reduction.

There are several topics that are important to me: concurrent receipt of disability pay for retired veterans, supporting our active duty soldiers, and helping those citizens who cannot help themselves.  When congress approaches any of these topic, however, those sponsoring the bill are told it must be budget neutral – in other words find the money in an existing budgeted program.

First I must admit that I am biased.  As a veteran and retired military, I find issues like concurrent receipt critical.  When I see a veteran who served for 18 or 19 years, forced into retirement because of “service connected” disability, and denied his disability pay when civilians in similar circumstances collect their disability, I am scandalized.  A one hundred percent disabled veteran essentially pays $2000 a month for his VA health care.    Congress and even President Obama sponsored bills to fix the situation, but they all failed the “budget neutral” test.

For several weeks I have researched programs in our governmental budgets and think I can nominate several programs to cut or reduce and allow the government to adopt the worthy programs I support.

So, I intend to write a series of commentaries detailing programs that are less important than those I support.  Today I will focus upon the oil and gas subsidies.

According to a recent budget report, Cutting out the oil and gas subsidies would save the U.S. government $45 billion every year.   In addition, oil and gas companies have been very creative in avoiding taxes.

First, many energy companies have revised their operations by registering their equipment in foreign countries.  Since equipment such as oil rigs are registered in other  countries (Panama, Marshall Islands, etc.), the are subject to lower taxes and safety standards.  Five oil companies that were studied saved an average of four billion dollars a year in taxes using this strategy.  The damage caused by lower safety standards remains  unknown.

Second, many American energy producers have also aggressively exploited the tax code by opening small offices in low-tax countries.  In so doing they avoid U.S. taxes, even though most of their operations and employees are in the United States.

Changing the oil and gas subsidies alone would save more than enough money to pay our wounded veterans their due.  It is a matter of honor.

Frequently I hear people complain about the United States Government.  They complain about a do nothing Congress that does not seem to care what the people want.  Often I must agree with them as I see the United States Senate block numerous bills that pass the House of Representatives to the dismay of the vast majority of our citizens.  I have worried about this for awhile because I believe in the Constitution and the government that our fore fathers designed when they created the country.

When creating the legislature in the Constitution, the framers designed a compromise.  Small states were afraid that larger population states would dominate power in a central government.  To address this fear, the framers designed two houses of legislature: a House whose members represent geographical areas designed by population size; and a Senate where each state would get two members regardless of state population.  With this design, small states had equal representation in the Senate and large states got more representatives in the House due to their larger population.

Lately I have been watching the United States government grind to a halt instead of conducting the business of the people.  The reason I think this is happening is because of special rules in the Senate.  To even consider legislation, Senate rules say that sixty (60) of the one hundred Senators must agree.  If the Senate leadership is unable to get agreement of 60 Senators, the bill dies.  In addition a single Senator can put a “hold” on a piece of legislation to prevent it being enforced.  So, to even consider passing a bill the “majority” must modify the bill to please Senators who are against the very concept being considered.  The result is a “watered down” bill, which becomes an ineffective law.  Is this what the “majority” of the people want?  No.  Is this what the “minority” of the people want?  No.

Look at the political effect of the super majority.  If the twenty smallest states (40 Senators) and one Senator from the next largest state decided to take control and prevent action on a bill, people representing 11.8 percent of the population would block the will of 88.2 percent of the population.  If one Senator from the smallest state (Wyoming) decided to block action, he – representing less than one tenth of one percent of the population could block the will of 99.9 percent of the country.

The way congress is functioning is not what the founders of this nation intended.  I wonder what would happen if someone from the majority states sued the Senate because their  rules are unconstitutional?

For many years the United States Armed Services have used physical disability boards, made up primarily of combat arms soldiers, to determine the disability awards given to soldiers who become disabled in the line of duty.  These boards wield much power, and although they have one physician and one lawyer as advisors, it is the “line” officers who make the decisions.

Recently The Nation magazine published an article entitled “Disposable Soldiers”, which details ways that the Pentagon is “cheating” wounded vets.  After reading the article, I became angry.  Here we go again, asking our soldiers to sacrifice their future, their families, and their life, without the support they deserve.  Will our country ever learn?

I remember about twenty years ago learning that the Pentagon had sent a “secret” memo to all physical disability boards directing them to avoid awarding disability to  soldiers, and instead grant them simple discharges without medical benefits.  If the data clearly indicated disability, then award the smallest possible rating, but reject for any justifiable reason.   At the time I was astonished to read the memo, and even more astonished to learn that many physical disability boards actually followed the guidance.

I grew up thinking that my country appreciated the sacrifices made by soldiers, and learned the words of Abraham Lincoln when he asked that we honor and support those who gave their life for us, and their widow and orphan.  Lincoln meant his words, sometimes the Pentagon ignores them to save money.

Sadly, this practice is still happening.  With our Armed Forces smaller than our global responsibilities indicate, soldiers are being asked to accept multiple combat tours and less time between those tours.  What makes this especially tough is that many of our soldiers suffer from PTSD (Post-traumatic stress disorder ) and TBI (Traumatic Brain Injury ).  PTSD can be caused by any stressful trauma such as being shot or having a friend shot while he is standing next to you.  TBI may occur with any sudden explosion strong enough to push your brain against your skull.  Todays combat situation in Iraq and Afghanistan put many of our soldiers in such situations daily.

Recently Col. Steve Strobridge of the Military Officers Association of America reported that the services are currently directly cheating some soldiers disabled by the war.  First, a Physical Evaluation Board finds a wounded soldier fit for duty, then the individual branch of the service gives that soldier an administrative discharge.  This obviously immoral action denies the wounded warrior of benefits upon the discharge.  So the soldier, who honorably served the country and was hurt in the process, is thrown out by ungrateful bureaucrats.

What kind of people cheat combat heroes?   Such actions are dishonorable and immoral.