Sundance film weighs into US tax debate

US multinationals make billions of dollars in profit but can pay no federal tax due to "legal but immoral" tax arrangements, according to a scathing film at the Sundance film festival. "We're Not Broke" tackles head on issues currently being thrashed out between Republican presidential candidates, over the fairness of America's tax code in particular as budgets are slashed. The film by Karin Hayes and Victoria Bruce is in competition for best US documentary at the independent film festival, which closes this weekend in the ski resort of Park City, Utah. The movie explains how business titans like Google, Bank of America, General Electric (GE) and Exxon managed to pay no federal tax, even when their profits are mostly made in the United States. "They can absolutely afford to pay taxes. About a third of their profits should be going to tax, to pay for our roads, our schools, our military, and feed people and the arts," co-director Bruce told AFP. "You have GE, that is a sponsor of Sundance. If they care about the arts, I suggest they pay their taxes, because little kids don't even have art at schools because all the school budgets have been cut so much." And she said: "Now a lot of companies are based on intellectual properties, like Google's search engine, for example. There's no product. "So they can actually sell that technology to a corporation they own in the Cayman Islands where there is a zero-percent tax and pretend that they have to use all the profits they have in the US to pay the rights to use the software." The same thing with the drug companies, she said. "Drug companies here are absolutely horrible, they ... tell us: 'We don't make any profit in the US.' And we know that it's totally untrue." "The corporations keep saying that it's legal. But is it moral?" The film highlights the complexity of the US federal tax code for companies, which often use their financial muscle, via lobbyists on Capitol Hill, to push through additions, modifications or exemptions to the rules. "Although politicians may talk about wanting to close corporate tax loopholes, they are in sort of a cage because they have to raise so much money for their campaigns, who are they going to get that money from?" said Hayes. "There has to be a very strong movement of people demanding 'We will not stand for this type of financing of candidates,' and to get the corporate money out of politics and then to be able to take actions and close all these loopholes, that the corporations are essentially writing themselves." The movie highlights the work of US Uncut, an association created in February 2011 which campaigns against tax evasion across the US. Many of its members have joined the anti-Wall Street Occupy movement. Bruce also believes that change has to come from popular action, rather than through the ballot box, including November elections in which President Barack Obama is seeking re-election. "Voting, I'm not convinced that it's working anymore. In fact, I don't think November would change anything ... Obama has been completely on the side of corporations since he's been in office," she said. And she added: "Once you realize that you're paying more than corporations in your country that are making billions of dollars in profits, and then you are told that we have to fire teachers, we can't feed poor people, you realize how our system is corrupt and broken. "It's sucking money out of the population and it's not coming back, it's in the pockets of the CEOs now and they don't care about us."