The British offered Revolutionary War General Benedict Arnold £20,000 for betraying West Point to the Crown.           

Benedict Arnold

But Arnold was a piker compared to companies that are raking in literally billions of untaxed dollars by betraying the United States in its time of economic trial.

To avoid paying their legitimate share of taxes, they move their headquarters overseas to countries with reduced tax rates. In tax parlance, this is called an “inversion.”

For almost 20 years, tax-avoiding corporations fled to Caribbean countries such as Bermuda and the Cayman Islands. But in 2004, Congress ruled that American companies could relocate overseas if foreign shareholders owned 20% of their stock.

According to statistics compiled by the Congressional Research Service (CRS) in 2014:

“Forty-seven U.S. corporations have reincorporated overseas through corporate inversions in the last 10 years, far more than during the previous 20 years combined.

“In total, 75 U.S. corporations have inverted since 1994 – with one other inversion occurring in 1983. What’s more, there are a dozen prospective inversion deals involving U.S. corporations looking to reincorporate overseas, according to CRS

“The new data underscores the significant increase in the number of U.S. corporations that have or are seeking to lower their U.S. taxes by reincorporating overseas.

“It also adds urgency to a legislative solution. Ways and Means Committee Ranking Member Sander Levin in May introduced legislation that would tighten rules to limit inversions.

“The Joint Committee on Taxation estimates that the legislation would save $19.5 billion over 10 years. Companion legislation was introduced in the Senate by Sen. Carl Levin.

“‘Barely a week seems to pass without news that another corporation plans to move its address overseas simply to avoid paying its fair share of U.S. taxes,’” said Ranking Member Levin.

“These corporate inversions are costing the U.S. billions of dollars and undermining vital domestic interests.

“‘We can and should address this problem immediately through legislation to tighten rules to limit the ability of corporations to simply change their address and ship U.S. tax dollars overseas.’”

According to a September 23, 2023 report by Boston Consulting Group, more than 90% of North American companies had relocated production and sourcing over the past five years. 

The 500 largest American companies hold more than $2.1 trillion in accumulated profits offshore to avoid U.S. taxes and would collectively owe an estimated $620 billion in U.S. taxes if they repatriated the funds.

So says a 2015 study released by two non-profit groups: Citizens for Tax Justice and the U.S. Public Interest Research Group Education Fund.

“At least 358 companies, nearly 72 percent of the Fortune 500, operate subsidiaries in tax haven jurisdictions as of the end of 2014,” the study said. “All told these 358 companies maintain at least 7,622 tax haven subsidiaries.” 

Niccolo Machiavelli, the father of modern political science, foresaw this danger more than 500 years ago. He deeply mistrusted the nobility of his own time, because they stood above the law with estates, subjects and even armies of their own.

For Machiavelli one of the likeliest sources of corruption lay in their ability to buy influence through patronage, nepotism and favors. 

The 2024 Presidential election provides the most blatant example of this: Elon Musk, the world’s richest man and the owner of SpaceX and X (formerly Twitter) donated $288 million to Donald Trump’s re-election campaign for President.

This allowed Musk to buy himself a high-ranking position within the new administration: The director of DOGE (Department of Government Efficiency)—a fictional agency whose power derived solely from Trump and charged with firing tens of thousands of federal employees.

To protect against such corruption, Machiavelli favored “good laws”—including, if necessary, the severest penalties—to coerce citizens to prefer the common good to private greed. Thus, civic duties would be maintained and private bids for power would be punished.

But Machiavelli also counseled the use of the carrot as well as the stick: Citizens should receive greater rewards for performing public services than private ones.

The American historian, Christopher Lasch, warned about this trend in his 1995 book, The Revolt of the Elites. Until recently, the economic and cultural elites of Western nations willingly shouldered civic responsibilities.

But that has changed.

According to Lasch: “The markets on which the fortunes of the new elites rely are tied to enterprises that operate across international boundaries….They have more in common with their counterparts in Brussels or Hong Kong than with the masses of people in their own country who are not yet plugged into the network of global communications.” 

CEOs and their high-ranking lieutenants in such corporations send their children to private schools. They have their own private healthcare systems and even protection by armies of private security officers.

As far as they are concerned: “Why should we pay for public services that we don’t even use?”

The results of this greed and indifference can be seen across the nation.