Previous articles here have described in detail a phenomenon called the “plutocratic insurgency.”  The term was coined by Robert J. Bunker and Pamela L. Bunker in a series of articles that have appeared in Small Wars Journal.  I have discussed the Bunkers’ conclusions in my own articles here:

The Rise Of The Plutocratic Insurgency

“Dark Globalization”:  The New Dimensions And Continued Progress Of The Plutocratic Insurgency

Simply stated, the term “plutocratic insurgency” describes a feature of modern Western society whereby the moneyed elites withdraw themselves further and further from the rest of society, aggregating more and more wealth into their own hands, while at the same time dodging any duty or responsibility that comes with being a member of the societies they parasitically exploit.  This is not just a matter of wealth concentration.  It goes far beyond that.  What we are talking about here is the wholesale pillage of social resources for the sake of a tiny elite that is becoming more and more untouchable with every passing year.  The only way that this trend could be reversed would be through the muscular intervention of a progressive reformer who could attack the plutocrats directly, as Theodore Roosevelt and Franklin Roosevelt did in the twentieth century.  But such courageous leadership is not a feature of the current American political landscape.

While many writers have taken note of the incredible income disparities that now characterize most of the Western world, only the Bunkers have drawn the necessary and inescapable conclusions from the data.  Their work is extremely important:  putting the finger on those responsible for society’s ills is the first step in correcting the problem.  They have correctly identified what is going on as a form of insurgency warfare conducted by the moneyed elites against the rest of society.  This is economic warfare, pure and simple, and must be understood as such.

No other writers have made this connection to insurgency warfare; yet if one follows the evidence, there is no way to draw any other conclusion.  We are under attack by the elites, and they are slowly but deliberately eroding what little is left of the economic pie to complete their subjugation of the states of the West.  If you think this is an exaggeration, I suggest you read the articles identified in the first paragraph above.

In the most recent installment of their “plutocratic insurgency” series, the Bunkers focus on the corrupt practices of Apple Inc., the celebrated technology company.  Apple likes to portray itself as a “down home,” friendly, local company that is just here to make your life better.  The cult of Steve Jobs is peddled as if he were some kind of secular saint.  The reality is quite different:

Apple Incorporated is a beloved ‘American’ company by day when it sells its innovative and sleek technology products such as iMacs and iPhones to our people and those of other nations and a ‘stateless’ revenue-maximizing multinational behemoth after hours when it comes time to pay the tax bill. Humble garage start-up origins and intense brand loyalty aside, this free multinational corporation’s darker underbelly focuses on profit maximization for its shareholders and executive officers at the expense of sovereign state revenues contributing to the public good of the American citizenry.

Relentless Tax Avoidance

Apple’s tax avoidance games would be shocking to the average American, were they more widely known.  But they are not widely known, primarily because no one wants to talk about them.  The media colludes with the plutocratic players, since they themselves are playing the same tax-dodging games.  Meanwhile, the middle classes are stuck with financial responsibility for funding the US’s imperialistic wars abroad:

One of Apple’s more unusual tactics has been to establish and direct substantial funds to offshore entities in Ireland, while claiming they are not tax residents of any jurisdiction. For example, Apple Inc. established an offshore subsidiary, Apple Operations International, which from 2009 to 2012 reported net income of $30 billion, but declined to declare any tax residence, filed no corporate income tax return, and paid no corporate income taxes to any national government for five years. A second Irish affiliate, Apple Sales International, received $74 billion in sales income over four years, but due in part to its alleged status as a non-tax resident, paid taxes on only a tiny fraction of that income.

In addition, the hearing will examine how Apple Inc. transferred the economic rights to its intellectual property through a cost sharing agreement with its own offshore affiliates, and was thereby able to shift tens of billions of dollars offshore to a low tax jurisdiction and avoid U.S. tax. Apple Inc. then utilized U.S. tax loopholes, including the so-called “check-the-box” rules, to avoid U.S. taxes on $44 billion in taxable offshore income over the past four years, or about $10 billion in tax avoidance per year.

Just your average, friendly, down-home technology company, founded by the avuncular, quirky Steve Jobs.  Meanwhile, Apple stockpiles cash at a frantic pace.  A war-chest is always a good idea in a “democracy” where influence and votes can be purchased by the highest bidder:

Apple Inc. is expected to report Tuesday that its stockpile of cash has topped a quarter of a trillion dollars, an unrivaled corporate hoard that is greater than the market value of both Wal-Mart Stores Inc. and Procter & Gamble Co. and exceeds the combined foreign-currency reserves held by the U.K. and Canada combined.

The money, more than 90% of which is stockpiled outside of the U.S., has drawn fresh attention as President Donald Trump has proposed slashing business taxes and a one-time tax holiday on corporate cash brought home. That could ratchet up pressure on the tech giant to make splashy acquisitions or dole out more money to shareholders.

Apple’s quarterly results will show the company has doubled its cash pile in just over 4 1/2 years. In the last three months of 2016, it racked up new cash at a rate of about $3.6 million an hour.

As of December, the company had $246.09 billion total cash, cash equivalents, and securities. Apple, like many big American companies, parks most of that cash offshore rather than paying U.S. taxes on its overseas profits…

Becoming An Extra-Sovereign Entity

Having reaped the fruits of its tax avoidance, Apple has launched plans to build a new “corporate headquarters” in Cupertino that some have derisively called the “Death Star.”  But we would be wrong to think that Apple’s stockpile of cash was designed simply to buy influence from favorable political figures.  The plutocratic insurgency is way beyond this level of simplicity.  The goal now is to become an extra-sovereign entity, to become literally above national governments and institutions, to be unregulated and untouchable.  And the US government permits this:

By utilizing these tax avoidance strategies, Apple Incorporated has become a ‘free corporation,’ essentially an extra-sovereign entity nearly immune to U.S. taxes, resulting in its being able to create an ever-growing cash hoard…

Why: To maximize profit for Apple shareholders and executive officers—a rational and legal multinational corporate approach just not an ethical one, given the blatant nature of twisting the ‘tax rules’ and playing sovereign states against each other for profit seeking purposes.

Analysis: In what should be a public relations disaster for Apple, Inc.—engaging in tax avoidance activities at the tens-of-billions of dollars level and then being caught red-handed by U.S. and EU investigators and subsequently written up by liberal democratic press—their corporate image remains relatively untarnished. This is partially due to “Silicon Valley’s well-known vanity and contempt for government…amply displayed in Apple’s tax figures” as well as the fact that other U.S. headquartered multinational corporations—and the elite who are their major shareholders—are engaging in similar tax avoidance schemes as evidenced in the millions of documents leaked in The Panama Papers in 2015 and The Paradise Papers in November 2017.

Apple’s tax avoidance strategies, which in the past have centered on creating Irish and Dutch shell companies to exploit U.S. tax regulations and now due to EU pressure have migrated to Jersey (a crown dependency of the United Kingdom and a well-known tax haven with no corporate taxes) for similar purposes, have resulted in its building up an unprecedented amount of cash on hand which includes over $50 billion in U.S Treasuries…

A bullet listing of Apple’s offshore profits and tax dodging strategy highlighted in a November 2017 Institute on Taxation and Economic Policy (ITEP) fact sheet is as follows:

• Apple has booked $252.3 billion in profits offshore on which it has not paid a dime in U.S. taxes. It’s offshore sum is greater than any other company. This is nearly 10 percent of the total $2.6 trillion in profits that U.S. Fortune 500 companies disclose holding offshore.

• By keeping these profits offshore, Apple is avoiding $78.5 billion in U.S. taxes.

• A repatriation rate of 12 percent, as proposed by the GOP, would generate at least $51.6 billion in tax savings for Apple.

• Between 2008 and 2015, Apple earned $305 billion before taxes, and paid a foreign tax rate of only 5.8% during this time.

• Apple was able to achieve this low foreign rate by shifting a large portion of its profits into its three Irish subsidiaries.

• A Senate investigation in 2013 found that two of Apple’s Irish subsidiaries were structured so that, for tax purposes, they weren’t “residents” of either Ireland or the U.S., allowing them to pay almost nothing to either country.

• Last year, European authorities charged Ireland with illegally cutting a special tax deal with Apple that gave the company a tax rate as low as 0.005%, lowering its Irish tax bill by over $14 billion.

• Much of the profits that Apple has assigned to its Irish subsidiaries is actually held in U.S. bank accounts and government bonds, but it can avoid S. taxes on these amounts because for tax purposes, the profits are under “foreign control.”

The preceding statistics are rather sobering and show that tens-of-millions dollars invested in assembling a world-class team of tax lawyers and accountants, political consultants and lobbyists, and more than a few shady overseas officials for ‘strategic tax mitigation purposes’ can reap massive benefits for multinational corporations, their executive officers, and well-heeled shareholders.

To add insult to such corporate thievery, Apple has recently built a shiny new 2,800,000 sq ft ‘spaceship-like’ headquarters in Cupertino at an estimated cost of $5 billion which, in essence, has been funded by the American public from lost U.S. Treasury revenues. The square footage of this headquarters is slightly larger than that of the 104-floor One World Trade Center and the 102-floor Empire State Building in New York City, respectively. This monument to plutocratic capitalism, contrasted with Cupertino’s underfunded and aging public infrastructure, is illustrative of not only the corporation’s ongoing hubris but the expectation that it will continue to reap the fruits of its tens-of-billions of dollars stateless tax avoidance strategies well into the foreseeable future, even with the occasional governmental fines and sanctions as a minor cost of engaging in this form of business being thrown into the mix.

The Collusion Of Western “Leaders”

Apple Inc. is not the only multinational corporation engaging in this kind of activity, of course.  It is a feature of the modern business climate.  The super-rich get away with this kind of looting because the leadership in the US allows them to get away with it.  “Leaders” are elected who are nothing more than spokesmen for the plutocratic elites, men whose job is only to read the teleprompter and intone sanctimoniously about their love for freedom and equality, while at the same time engaging in avaricious spoliation of the most venal kind.  Meanwhile, a hypnotized, distracted public sits hunched over its iPhones, frantically pressing buttons on the machine that its masters provided them for entertainment.

One way or another–if history is any guide–this picture is going to change in the years ahead.  No political or social system can long last if the vast majority of resources are concentrated at the top in the hands of a very few.  The effect is profoundly destabilizing.  But windows of opportunity for reform do not stay open indefinitely; and the time for taking action is narrowing with each passing year.  History shows that either peaceful reform is instituted from the top by enlightened leadership, or a revolutionary redistribution of wealth takes place from the bottom.  Which of these outcomes takes places is something each nation must decide for itself.

 

Read On Duties and keep yourself grounded and secure: