Though technically stemming from decades of inefficiency, this section of our list is responsible for such a staggering amount of waste that it deserves solo recognition in the #1 spot.
1. Loopholes
With a 72,000-page tax code reminiscent Swiss cheese and holes so big you could drive a tank through them, it’s no surprise (or secret) that money ends up stuck in the system.
It’s not the government that’s losing out, however; it’s you. Just not for the reasons you might think.
America has relatively low-income tax rates for citizens that average about 25%. On the other hand, it has the highest tax rates for corporations at 36%. The problem? Many of America’s global conglomerates, with profits on the magnitude of billions of dollars, pay little, if any, of those taxes.
Exxon Mobile
Profit: $19 billion
Income Tax Paid: $0
—
Bank of America
Profit: $4.4 billion
Income Tax Paid: $0
—
Chevron
Profit: $10 billion
Income Tax Paid: $0
—
General Electric
Profit: $26 billion
Income Tax Paid: $0
—
Verizon
Profit: $24 billion
Income Tax Paid: $0
—
How do they get away with it?
Loopholes. Under current U.S. tax laws there is nothing illegal about corporations moving their funds into foreign investments in a practice called “transfer pricing,” thereby thwarting taxation.
One questionable symptom of this practice is that despite unemployment rates breaking records in some regions of the United States after the great recession that began in 2007, corporate profits rose to an all-time high.
Meanwhile, federally funded programs like Medicaid and Medicare, education assistance, Social Security, veterans’, disability, and unemployment assistance, state and federal law enforcement, and countless more continue to see cut after cut to their budgets.
AlterNet: “Boeing, Ford Motors, Chevron, Citigroup, Verizon, J.P. Morgan, and General Motors pay their CEOs more than they pay in taxes”
RT.com: “Despite $1 billion in profits Facebook will get a refund instead of paying taxes”
Thousands of lobbyists, whose singular purpose is to influence policy decisions in congress, mill around Washington every day. They work avidly to persuade lawmakers to keep corporate tax rates low, tax cuts high, and keep looking the other way while the economy teeters on the edge of utter implosion.
Total Waste: $751,649,207,500+
Source: We’re Not Broke
If you like pressing buttons and want some practice spending billions you’ll never have because those in charge of it are too busy bungling the job, Buildabetterbudget.org provides this nifty tool to see what happens when you play with the Federal Budget.
Leave a shout-out in the comment section below an d tell us how you did.
