Paradise Papers: Invest NI and the Mauritian giveaway

(THIS ARTICLE IS COURTESY OF THE BBC)

 

Paradise Papers: Invest NI and the Mauritian giveaway

Paradise Papers graphic

A number of business owners in Northern Ireland have been involved in aggressive tax avoidance schemes, an investigation by the BBC’s Nolan Show has revealed.

Sam McCrea MBE and his wife, Julienne, are owners of Springfarm Architectural Mouldings Ltd (SAM Mouldings) in Antrim.

The couple was involved in a Mauritian tax avoidance scheme.

The McCreas have said they have fully complied with their tax obligations.

Over a quarter of the people signed up to that scheme were from NI.

Julienne McCrea and her husband, Sam McCrea MBE, are owners of Springfarm Architectural Mouldings Ltd in Antrim
Image captionJulienne McCrea and her husband, Sam McCrea MBE, are owners of Springfarm Architectural Mouldings Ltd in Antrim

The Paradise Papers are a huge batch of leaked documents mostly from offshore law firm Appleby, along with corporate registries in 19 tax jurisdictions, which reveal the financial dealings of politicians, celebrities, corporate giants and business leaders.

The 13.4 million documents were passed to the German newspaper Süddeutsche Zeitung and then shared with the International Consortium of Investigative Journalists.

The Nolan Show team worked alongside colleagues in BBC Panorama, the Guardian, and nearly 100 media organizations worldwide.

Multi-million pound property given away

In 2000, SAM Mouldings bought land from Stormont’s Department of Enterprise for £280,000. The company built their business on the site. By 2014, the property, with its factory and offices, was valued on its balance sheet at £4m.

But the following year, SAM Mouldings gave the multi-million pound property away for just one pound to what the company described as an ‘unconnected third party’. The beneficiary was a company in Mauritius.

Documents seen by the Nolan Show reveal that the McCreas had control of the Mauritian company – they had given the multi-million-pound property to themselves in all but name. The couple was listed as ‘investment advisors’ to the company – but the leaked files suggest they were doing much more than just advising.

At one stage, Sam McCrea wrote to the company in Mauritius questioning why a payment was made without his or his wife’s permission.

Email from Sam McCrea

He asked how the company could make any payments without the approval of the IA or ‘investment advisor’ – meaning either himself or his wife Julienne.

In other documents, Sam McCrea advises that the Mauritian company buys shares from himself.

Invest NI

Since 2008, SAM Mouldings has received over £431,000 in financial assistance from Invest NI – who is a preferential shareholder in the company.

After the Antrim property SAM Mouldings operated from was given to the McCreas’ company in Mauritius, SAM took on a £270,000 annual rent bill. This rent was sent through various intermediaries – and ended up in the McCreas’ Mauritian company – where the income tax rate is just 3%.

This tax avoidance mechanism was promoted by the McCreas’ tax advisors who set up the Mauritian scheme as a form of ‘rent factoring’ – that’s where in exchange for a lump sum, a company diverts future rents from property to a financier.

Under this system, SAM Mouldings paid £270,000 annual rent to the Mauritian firm but Sam McCrea received a £200,000 loan from the firm. As a loan, it was not liable for tax.

Invest NI told the BBC in a statement that as part of their project monitoring and approval procedures of SAM Mouldings Ltd they “were aware of the property transfer in question and this was taken into consideration when approving their most recent project.”

“SAM Mouldings has continued to grow in terms of both exports and employment targets and is meeting the agreed repayment schedule for the preference shares.

Paradise Papers explainer box

“A company’s tax planning is a matter between it and HMRC. If it transpires that information provided to us as part of our approval process has been misleading and would have resulted in a different decision being made, we will review the specific case, as would be normal practice.

When asked about their involvement in tax avoidance schemes, the McCreas’ lawyers said their clients “are not going to enter into a course of correspondence concerning this sensitive and confidential funding arrangements of their business, with the BBC”.

They added: “Our clients have fully complied with their obligations to HMRC, specifically with regard to the Mauritian companies.

They also said, “there will be no loss to the UK Exchequer as a result of the Mauritian companies”.

They said the allegations were “untrue, defamatory and are particularly unpleasant slurs on two people who have brought prosperity and employment to the Antrim area”, adding “Mr. McCrea holds a public honor for his services to business and he guards his reputation carefully”.

The Nolan Show will be focusing on stories from the Paradise Papers across the week.

Paradise Papers: Full coverage; follow reaction on Twitter using #ParadisePapers; in the BBC News app, follow the tag “Paradise Papers”

Watch Panorama or listen back to the Nolan show on the BBC iPlayer (UK viewers only)

Apple’s cash mountain, how it avoids tax, and the Irish link

(THIS ARTICLE IS COURTESY OF THE IRISH TIMES)

(OPED: PEOPLE LIKE APPLE’S TIM COOK WHO GO BEFORE CONGRESS AND LIE HIS -SS OFF SHOULD BE ARRESTED AT ONCE AND HELD WITHOUT BAIL. IF THE AVERAGE PERSON DID THESE SAME CRIMES THEY WOULD BE THROWN UNDER THE JAIL. IN MY OPINION, IT SHINES A LIGHT ON THE REAL WORLD OF POLITICAL CONTRIBUTIONS, IF YOU ARE A BIG MONEY GIVER TO THE POLITICIANS (BUYING THEM), YOU ARE ALLOWED TO BREAK THE LAWS AND STEAL BILLIONS THROUGH TAX FRAUD.) (TRS)

Apple’s cash mountain, how it avoids tax and the Irish link

Paradise Papers: Elite tax advisers help Apple and others skirt effects of ‘double Irish’ crackdown

Play Video

The International Consortium of Investigative Journalists (ICIJ), use the example of a fictional fast-food chain, Snax Haven, in explaining how offshore tax avoidance systems work. Video: ICIJ

It was May 2013, and Apple Inc’s chief executive, Tim Cook, was angry. He sat before the United States Senate’s permanent subcommittee on investigations, which had completed an inquiry into how Apple avoided tens of billions of dollars in taxes by shifting profits into Irish subsidiaries that the subcommittee’s chairman called “ghost companies”.

“We pay all the taxes we owe, every single dollar,” Cook declared. “We do not depend on tax gimmicks . . . We do not stash money on some Caribbean island.”

Tim Cook looks on as the new iPhone X goes on sale at an Apple Store on November 3rd, 2017 in Palo Alto, California. Photograph: Justin Sullivan/Getty
Tim Cook looks on as the new iPhone X goes on sale at an Apple Store on November 3rd, 2017 in Palo Alto, California. Photograph: Justin Sullivan/Getty

Five months later Ireland bowed to international pressure and announced a crackdown on Irish firms, like Apple’s subsidiaries, that claimed that almost all of their income was not subject to taxes in Ireland or anywhere else in the world.

Now leaked documents shine a light on how the iPhone maker responded to this move. Despite its CEO’s public rejection of island havens, that’s where Apple turned as it began shopping for a new tax refuge.

Apple’s advisers at one of the world’s top law firms, the US-headquartered Baker McKenzie, canvassed one of the leading players in the offshore world, a firm of lawyers called Appleby, which specialized in setting up and administering tax-haven companies.

A questionnaire that Baker McKenzie emailed in March 2014 set out 14 questions for Appleby’s offices in the Cayman Islands, the British Virgin Islands, Bermuda, the Isle of Man, Guernsey and Jersey.

One asked that the offices “Confirm that an Irish company can conduct management activities . . . without being subject to taxation in your jurisdiction.”

Apple also asked for assurances that the local political climate would remain friendly: “Are there any developments suggesting that the law may change in an unfavorable way in the foreseeable future?”

Tim Cook, CEO of Apple, speaks about the iPhone X during a launch event in Cupertino, California on September 12th, 2017. Photograph: Stephen Lam/Reuters.
Tim Cook, CEO of Apple, speaks about the iPhone X during a launch event in Cupertino, California on September 12th, 2017. Photograph: Stephen Lam/Reuters.

In the end Apple settled on Jersey, the tiny island in the English Channel that, like many Caribbean havens, charges no tax on corporate profits for most companies. Jersey was to play a significant role in Apple’s newly configured Irish tax structure set up in late 2014. Under this arrangement, the MacBook maker has continued to enjoy ultralow tax rates on most of its profits and now holds much of its non-US earnings in a $252 billion mountain of cash offshore. The Irish Government’s crackdown on shadow companies, meanwhile, has had little effect.

The inside story of Apple’s hunt for a new avoidance strategy is among the disclosures emerging from a leak of secret corporate records that reveals how the offshore tax game is played by Apple, Nike, Uber and other multinational corporations – and how top law firms help them exploit gaps between differing tax codes around the world.

The documents come from the internal files of the offshore law firm Appleby and the corporate services provider Estera, two businesses that operated together under the Appleby name until Estera became independent in 2016.

The files show how Appleby played a cameo role in creating many cross-border tax structures. The German newspaper Süddeutsche Zeitung obtained the records and shared them with the International Consortium of Investigative Journalists and its media partners, including The Irish Times, the New York Times, Australia’s ABC, the BBC in the United Kingdom, Le Monde in France and CBC in Canada.

These disclosures come as the White House and Congress consider cutting the US federal tax on corporate income, pushing its top rate of 35 percent down to 20 percent or lower. President Donald Trump has insisted that American firms are getting a bad deal from current tax rules.

The documents show that, in reality, many big US multinationals pay income taxes at very low rates, thanks in part to complex corporate structures they set up with the help of a global network of elite tax advisers.

In this regard, Apple has led the field. Despite almost all design and development of its products taking place in the US, the iPhone maker has for years been able to report that about two-thirds of its worldwide profits were made in other countries, where it has used loopholes to access ultralow foreign tax rates.

Now leaked documents help show how Apple quietly carried out a restructuring of its Irish companies at the end of 2014, allowing it to carry on paying taxes at low rates on the majority of global profits.

Multinationals that transfer intangible assets to tax havens and adopt other aggressive avoidance strategies are costing governments around the world as much as $240 billion a year in lost tax revenue, according to a conservative estimate in 2015 by the Organisation for Economic Cooperation and Development.

Corporate creativity

Documents reviewed by ICIJ and other media partners provide insight into how those strategies work. They show the creative methods that advisory firms devise in response to attempts by regulators to crack down on tax shelters.

“US multinational firms are the global grandmasters of tax-avoidance schemes that deplete not just US tax collection but the tax collection of most every large economy in the world,” said Edward Kleinbard, a former corporate lawyer who is now a professor of tax law at the University of Southern California.

The Trump administration and the United States Congress are considering whether to grant a one-time tax holiday that would allow big multinationals to bring home, at a sharply reduced tax rate, more than $2.6 trillion they have stowed in offshore subsidiaries.

Kleinbard said the prospect of a big corporate tax holiday “simply begs companies to ramp up their tax-avoidance strategy still further in anticipation of more holidays in years to come. And it removes pressure for genuine reform.”

An Apple spokesperson declined to answer a list of questions about the company’s offshore tax strategy, except to say it had informed US, Irish and European Commission regulators of its reorganization at the end of 2014. “The changes we made did not reduce our tax payments in any country,” the spokesman said.

He added: “At Apple, we follow the laws, and if the system changes we will comply. We strongly support efforts from the global community toward comprehensive international tax reform and a far simpler system, and we will continue to advocate for that.”

By quietly transferring trademarks, patent rights, and other intangible assets to offshore companies, many other global businesses have also been able to cut their tax bills dramatically.

The leaked papers show how the ownership of prized assets – including rights to Nike’s Swoosh trademark, Uber’s taxi-hailing app and medical patents covering such treatment options as Botox and breast implants – could all be traced to a five-story office block in Bermuda occupied by Appleby and Estera.

Ownership of Facebook’s user database for most countries outside the United States, as well as rights to use its platform technology – together worth billions of dollars – has been held through companies at a similarly unassuming address on Grand Cayman used by Appleby and Estera. And Apple’s money trail has been traced to a building used by Appleby and Estera in Jersey, 30km off the coast of northern France.

Addresses shared by the two offshore firms on tax-haven islands have played host to secretive shell companies buried deep within the corporate architecture of many of the largest multinationals. Despite moves by governments to phase out loopholes, tax shelters remain as popular as ever.

Governments around the world have challenged some of the tax structures maintained by Appleby and Estera clients – though not always successfully. Nike triumphed over the US Internal Revenue Service a year ago. A dispute between Facebook and US tax authorities continues to play out in court. Apple, meanwhile, is being pursued €13 billion in Irish back taxes after European regulators ruled that Ireland had granted illegal state aid by approving Apple’s tax structure.

The leaked documents help explain how three small jurisdictions – the Netherlands, Ireland, and Bermuda – have become go-to destinations for big corporations looking to avoid taxes on their overseas earnings. Among them, these three spots hold less than one-third of 1 per cent of the world’s population – but they accounted for 35 per cent of all profits that US multinationals reported earning overseas last year, according to analysis by Gabriel Zucman, an economist at the University of California, Berkeley.

Holy grail

Over three decades US multinationals have been growing bolder, shifting vast chunks of profits into tax havens. Concerns about their tactics were largely ignored until government finances around the world came under pressure in the wake of the 2008 financial crisis. Beginning in the autumn of 2012, the issue came to a head in a welter of government inquiries, tax-inspector raids, investigative reporting and promises of reform.

By the time the US Senate permanent subcommittee on investigations released 142 pages of documents and analysis for its public hearing on Apple’s tax avoidance in May 2013, the world was paying attention. The subcommittee found that Apple was attributing billions of dollars of profits each year to three Irish subsidiaries that declared “tax residency” nowhere in the world.

Under Irish law, most firms incorporated in Ireland are required to pay taxes locally on their profits. But if the directors are able to convince the Irish tax authorities that a company is “managed and controlled” abroad, it can often escape all, or almost all, Irish tax

For more than two decades the directors of Apple’s three Irish companies – including, for many years, Tim Cook – did just that. By running these Irish subsidiaries from group headquarters in California they avoided Irish tax residency.

At the same time, the directors knew that their Irish companies would not qualify for tax residency in the United States because American tax law worked differently. Under US rules a company has American tax residency only if it is incorporated there.

“Apple sought the holy grail of tax avoidance: offshore corporations that it argues are not, for tax purposes, resident anywhere in any nation,” Carl Levin, then a Democratic senator for Michigan, and chairman of the Senate subcommittee, said at the 2013 hearing.

Ireland’s minister for finance at the time, Michael Noonan, at first defended his country’s policies, saying, “I do not want to be the whipping boy for some misunderstanding in a hearing in the US Congress.” But by October 2013, in response to growing international pressure, he announced plans to require Irish companies to declare tax residency somewhere in the world.

Minister for Finance Michael Noonan in the Dáil: “For existing companies, there will be provision for a transition period until the end of 2020”
Minister for Finance Michael Noonan in the Dáil: “For existing companies, there will be provision for a transition period until the end of 2020”

At that time Apple had accumulated $111 billion in cash almost entirely held by its Irish shadow companies, beyond the reach of US tax authorities. Each year the pile grew higher and higher as billions of dollars in profits poured into these low-tax subsidiaries.

Company officials wanted to keep it that way.

So Apple sought alternatives to replace the tax-shelter arrangements that Ireland would soon shut down. At the same time, however, the iPhone maker wanted its interest in the offshore world kept quiet.

As Cameron Adderley, global head of Appleby’s corporate division explained in an email to other senior partners: “For those of you who are not aware Apple [officials] are extremely sensitive concerning publicity . . . They also expect the work that is being done for them only to be discussed amongst personnel who need to know.”

For Appleby, Adderley explained, this was “a tremendous opportunity for us to shine on a global basis with Baker McKenzie”.

Baker McKenzie’s role in setting up offshore structures for multinationals, and then defending them when challenged by tax regulators, is legendary. The law firm has also been involved in lobbying against proposals to crack down on tax avoidance by technology giants. It has 5,000 attorneys in 77 offices around the world. Former partners include Christine Lagarde, the former French finance minister and now managing director of the International Monetary Fund.

Behind closed doors, Apple decided that two of its Irish companies should, with the help of Appleby, claim tax residency in Jersey, one of the largest island shelters with strong links to the UK banking system, where Apple’s Irish subsidiaries already held accounts. Jersey is a crown dependency of the United Kingdom, but it makes its own laws, sets its own tax rates and is not subject to most European Union legislation, making it a popular tax haven.

Double Irish

As Apple’s plans to use an offshore tax haven progressed another potential problem emerged. In mid-2014, again under pressure from other governments, Ireland had begun exploring a ban on the tax shelter known as the double Irish, an avoidance strategy used by scores of companies, including Google, Facebook, LinkedIn, other tech companies and drugmakers such as Abbott Laboratories.

The double Irish allows companies to collect profits through one Irish unit that actually employs people in Ireland and is tax resident there, then route those profits to a second Irish subsidiary that claims tax residency in a low-tax island such as Bermuda, Grand Cayman or the Isle of Man.

A crackdown on such arrangements could have interfered with Apple’s plans in Jersey before they had got off the ground. Although it was aimed at double-Irish structures the potential rule change would ban all Irish companies from claiming tax residency in a tax haven.

Although the iPhone maker was not in a position to protest loudly, others spoke up. California-based Terilea Wielenga, who was the international president of the Tax Executives Institute, wrote to Noonan in July 2014, warning that moves that would effectively ban double-Irish structures “may not be prudent”. And if Irish ministers did press ahead, she added, they would be well advised to incorporate “a substantial transition period”.

What her letter did not tell, but leaked Appleby papers now show, was that Wielenga was quietly orchestrating a long-standing double-Irish structure at Allergan, the maker of Botox, where at the time she worked as head of tax. For more than a decade the structure has shifted profits away from Ireland, where Allergan has a Botox factory, to Bermuda.

The ICIJ attempted to contact Wielenga but did not receive a response. Allergan did not answer specific questions about its tax affairs but said: “Allergan abides by all applicable tax laws and accounting rules and pays all taxes owed in all jurisdictions where it does business.”

The lobbying seemed to work.

Ireland included a generous grandfathering clause for Allergan and other multinationals using Irish tax structures. “For existing companies, there will be provision for a transition period until the end of 2020,” Noonan declared on October 14th, 2014.

More precisely, the fine print of policy documents revealed, the grandfathering provisions would apply not just to companies in existence when the finance minister spoke but also any new ones created up until the end of 2014.

That gave Apple just enough time. By the start of 2015, it had restructured its affairs in Ireland, including securing tax residency in Jersey for Apple Sales International and Apple Operations International, two of the three Irish shadow companies highlighted in the US Senate investigation a year earlier.

For the previous five years, Apple Sales International had been Apple’s biggest profit generator, churning out more than $120 billion, or close to 60 percent of Apple’s worldwide earnings.

Meanwhile, much of that profit was transferred as dividends to Apple Operations International, described by Cook as “a company set up to provide an efficient way to manage Apple’s cash”.

Before their move to Jersey, these two subsidiaries had played a leading role in helping Apple accumulate and hold $137 billion in cash – most of which came from non-US profits barely taxed by any government in the world.

The latest figures indicate that since Apple’s reorganization of its Irish companies this sum has increased 84 percent, although Apple won’t confirm which of its foreign subsidiaries own this cash.

This pile of money has inadvertently made Apple one of the biggest investment funds in the world, and its offshore cash reserves have been put to work in a portfolio that includes corporate bonds, government debt, and mortgage-backed securities.

Under the wire

Apple was not the only multinational that moved quickly to grab a final chance before 2015 dawned.

“At the end of 2014 a window of opportunity closes,” advisers from the big US law firm DLA Piper explained to CitiXsys, a retail software supplier based in New York. DLA Piper set out a frenetic schedule of incorporations and intellectual-property transfers to be rushed through before the new year to set up a double Irish.

As DLA Piper explained, this arrangement “must be managed and controlled in [a] 0% or low tax jurisdiction, such as the Isle of Man, where the bulk of profits are recognized”. That way the entire structure “produces a very low effective tax rate, approximately 5% to 7%”.

ICIJ contacted CitiXsys and other multinationals featured in this story. CitiXsys did not respond, and Uber declined to comment. Nike, Facebook, and Allergan declined to answer questions but provided general statements saying they fully complied with tax regulations in countries where they operate.

DLA Piper declined to comment, and Baker McKenzie said it does not discuss client matters. Appleby declined to answer questions but said on its website: “We are an offshore law firm who advises clients on legitimate and lawful ways to conduct their business.” Estera, the corporate-services company that split away from Appleby at the beginning of 2016 and continues to administer many offshore companies on behalf of clients, declined to comment.

Finding home

While CitiXsys’s rapidly assembled structure mirrored the structures embraced by Facebook, Google and others using the double Irish, Apple’s reorganized Irish companies appear to function very differently.

The iPhone maker has declined to answer ICIJ’s questions about its new setup, but it appears to give a key role to another of Apple’s Irish subsidiaries, a company called Apple Operations Europe.

Together with Apple Operations International and Apple Sales International, the company made up the three Irish firms criticised by US senators in 2013 for being “ghost companies”, tax resident nowhere in the world.

By 2015 tighter Irish laws had caused all three to find a new tax home. But while the other two Irish companies took up residence in Jersey, Apple Operations Europe became tax resident in Ireland, the country of its incorporation.

A clue to why a multinational might want a subsidiary that was liable for taxes in Ireland can be found, once again, in Michael Noonan’s budget announcement in 2014.

While media headlines focused on his decision to crack down on double-Irish arrangements, less attention was paid to measures not mentioned in his budget speech but contained in accompanying policy documents. In particular, the paperwork revealed plans to expand an already generous tax regime for companies that bring the intangible property into Ireland.

The incentive, known as a capital allowance, offered Irish companies big tax deductions over many years if they spent money buying expensive intangible property.

Importantly for multinationals, however, it was also available to an Irish company that bought the intangible property from another company within the same group.

The arrangement was especially attractive to those multinationals that were in a position to sell their intangible property into Ireland from a subsidiary in a tax haven, where the gain from the sale would go untaxed.

In effect, even though the internal sale would cost the multinational nothing, such a move could nevertheless unlock huge tax breaks in Ireland.

Leprechaun economics

Even before Noonan sweetened the terms of this capital allowance tax break, some experts suggested it could be used to achieve tax rates as low as 2.5 percent.

Apple declined to answer questions about whether it has taken advantage of this tax break by selling rights to use its intangible property from Apple Sales International in Jersey to Apple Operations Europe in Ireland.

It’s clear, though, that a large amount of intangible property landed abruptly in Ireland around the period when Apple reorganized its three Irish subsidiaries. In fact, the country’s gross domestic product for 2015 leaped by an incredible 26 per cent, boosted by close to $270 billion of intangible assets suddenly appearing in Ireland’s national accounts at the start of the year – more than the entire value of residential property in Ireland.

The Nobel Prize-winning economist Paul Krugman called the development “Leprechaun economics”.

The ICIJ showed the findings from its investigation to J Richard Harvey, a Villanova University law professor, and Stephen Shay, senior lecturer at Harvard Law School. In 2013 both of them gave detailed testimony on Apple’s previous Irish structure to the US Senate committee’s investigation. They both told the ICIJ it appeared likely the iPhone maker had transferred intangible assets to Ireland.

“While it is not 100 percent clear how Apple has restructured its Irish operations, one strong possibility is that they have transferred more than $200 billion of valuable intangible assets . . . to an Irish resident company, for example, Apple Operations Europe,” Harvey said.

An Apple staff member counts a customer’s money as they pay for a new iPhone X at an Apple shop during its launch in Moscow, Russia, on November 3rd, 2017. Photograph: Sergei Ilnitsky.
An Apple staff member counts a customer’s money as they pay for a new iPhone X at an Apple shop during its launch in Moscow, Russia, on November 3rd, 2017. Photograph: Sergei Ilnitsky.

Shay added: “By using Irish intangible property tax reliefs, Apple likely will pay little or no additional Irish tax for years to come on income at Apple Operations Europe.

The Department of Finance in Dublin told the ICIJ: “The Irish regime for capital allowances . . . is broadly similar to regimes available in other countries and does not confer any additional benefits to multinationals.”

However, in October 2017, Ireland reversed the sweetened terms Noonan had added to the tax break three years earlier.

Apple said that following its reorganization it pays more Irish tax than before. “The changes we made did not reduce our tax payments in any country,” Apple said in a statement. “In fact, our payments to Ireland increased significantly and over three years [2014, 2015 and 2016] we’ve paid $1.5 billion in tax there – 7% of all corporate income taxes paid in that country.”

But the iPhone maker still won’t say how much profit it makes through its Irish companies – making it impossible to gauge whether $1.5 billion is a lot of tax to pay in three years or not.

Reuven Avi-Yonah, director of the international tax program at the University of Michigan Law School, said Apple was “determined not to be hurt” when it had to abandon its previous Irish structure. “This is how it usually works: You close one tax shelter, and something else opens up,” he said. “It just goes on endlessly.”

Jesse Drucker, a reporter with the New York Times, contributed to this story

The Unneeded Poor WILL BE Exterminated

The Unneeded Poor WILL BE Exterminated

 

In this article today I am going to write it as a proverbial ‘Devils Advocate’. What I mean by this is that this is not something that I want to happen yet I am making the argument to you that it is very much a possible reality as the human race continues to degenerate.

 

When it comes to politics I am an ‘Independent’, neither a Democrat nor a Republican. I believe that both of those major parties are about as crooked at the top levels as they can find a way to be. When you are a person like Hillary or Bill Clinton or a Trump or a Bush I believe that they have proven themselves to be the type of people who will do anything to win or to enrich themselves. In the past day or so thousands of documents dubbed the ‘Paradise Papers’ have surfaced showing how the super wealthy cheat their country and their people out of tax revenues. Last year the same type thing happened with the ‘Panama Papers.’ These documents show that not only are many of the ‘super wealthy’ cheating on their taxes, they also show how intertwined they are with world leaders, government officials, and the super huge global companies as they all seek to scratch each other’s backs in their efforts to get even richer.

 

Back in the mid-1970’s you used to hear people talking on the radio and TV how with the ‘new technologies’ how people were only going to be only having to work 4 day weeks because the machines will allow us to get as much done in 4 days as was currently being done in the 5 day work week. How foolish these ‘talking heads’ were. If you are the employer why would you give up the chance to make an extra 20% each week by giving your employees an extra day off? Especially if your company is on the Stock Exchange, your stockholders would quickly replace you. The business world, especially those on the Stock Exchange are only concerned about one thing, higher profits. If you have ever paid any attention at all to the stock market, you should have noticed how little these people think of the people who are actually making the products. When two companies merge the value of the stock goes up. Why, because the next thing that will happen is the new Board of Directors will be getting rid of many ‘unneeded’ employees. Doing this means that the company will take those wages as pure profit, increasing the value of its stock. When a company decides to get rid of employees, the stock value goes up. When a company breaks a Union, the stock value goes up. During these events, you should also have seen that the Board of Directors salaries and bonuses go up. When a company moves their production factories to a ‘third world’ country where they can fire all of their American workers and get child slave labor to do all the production, stock values, and executive compensation goes up.

 

The world as you know has a population growth that is unsustainable yet at this same time machines and robots (AI) are taking more and more jobs away from workers. From a business standpoint, having machines replace human workers is a very wise thing to do, and it increases your stock value and the bosses salaries and compensation. If they invest in machines they can get rid of the overhead cost of having human employees. Think about it, no more salaries to pay, no benefit packages to pay like Workers Comp, vacation pay, health insurance, retirement benefits, paid sick days, you can’t be sued by a computer, no OSHA regulations to adhere to. Folks, the list goes on and on.

 

Our planet has about seven billion people on it right now, look at the slave labor around the world right now, from Africa to Asia to the Middle-East and yes, here in the U.S. also. Is slave labor legal in a lot of these countries? No, but it still goes on. You may say why, why does it still go on but the answer is simple, pay as little for the labor as possible to increase the profits at the top and to the stockholders. You may say now wait a moment, slaves don’t cost anything but this is not totally true. Slaves still have to get some food and some water or they will die or become too weak to do the work. The more slaves you have in the ‘waiting room’ the less you have to supply to each one each day. Why, because it is in your financial best interest if all of the ‘extras’ die. If the ‘extras’ aren’t dying fast enough on their own, you assist them.

 

If the Earth has seven billion people but can only sustain six billion people because there is no way to produce enough food, what happens to the extra billion people? Who do you think are going to be the ones that are starved to death? Hint, it is not going to be the super rich who basically own everything, it will be the poorest of the poor who will be eliminated. During the early Republican Primaries last year a former ‘Speaker of the House’ Newt Gingrich spelled out the perfect Republican ‘wish list.’ As you probably know the majority of the Republicans in the Congress and the Senate, and this President wants to cut the national deficit by cutting programs like food stamps to the poor and cutting way back on Medicare, Medicaid, meals on wheels, school lunch programs and Social Security. Folks, who need these programs the most? Mr. Gingrich in a TV program last year went even further. Mr. Gingrich consider all of these programs to be ‘welfare’, yet he went further, he called military retirement pay, VA disability compensation and the VA itself ‘welfare’ programs and he said that all of these ‘Welfare’ programs need to be eliminated. There was one thing that he did not include in his list of welfare programs, that was Congressional, Senate, and Presidential retirement pay and benefits, go figure. He has been receiving taxpayer-paid benefits for decades, but I guess that doesn’t count.

 

Back in the 1950’s the top end national tax rate was 90%, during that time the U.S. was able to build city infrastructures, a National Highway program unequaled in the whole world as well as thousands of new bridges and dams. Now, our roads, bridges, dams, and cities are falling apart, why is this? Now the top end tax rate has been 35% and the President is pushing a top end tax rate of 20%. This is at the same time that corporations are swimming in cash and as they say, with nowhere to spend it. About six months ago, I think it was on CNN, that they reported that U.S. companies have about 13 Trillion Dollars sitting in offshore accounts. So, what do these Republican lawmakers want to do, take even more money out of the economy and give it to these same folks who are destroying our country from the inside? It is also these same benefactors who are filling the pockets of these same evil politicians.

 

Back in the late 1940’s and early 1950’s in China Chairman Mao put a starvation policy in place against the citizens of China. The reason was simple, 500 million people are easier to control than one billion people. Folks, these are just things that I have seen, heard, and read throughout my 60+ years. You don’t have to agree with anything that I have written in this article today, but I hope that I have been able to at least get you to think about these issues.