↓ Archives ↓

Category → Inequality Between 1% & 99%

A New Tax Plan Idea for the “Job Creators”!

By Frank Glenn – Republicans have made themselves almost ridiculous in the past several years championing the cause of the poor “job creators”.  They lament the onerous regulations businesses have to endure (over-regulation, they call it, which really means any “rules” we make for how businesses must conduct themselves) — and they enumerate endlessly the terrible things that happen to businesses if you raise their taxes a penny (now many of these corporations are companies that pay no federal income taxes on billions of dollars of profit to begin with).  The way it hurts the economy so — and prohibits “job creation”.  They lament, in hushed tones — the “uncertainty”  that is scaring businesses so much that they just don’t know what to do!  All  poppy-cock and all lies, of course.  Remember WMD’s in Iraq.  Same thing.

__________________________________________________________________________

The reason corporations are not creating jobs here — and wouldn’t even if the tax rate was Zero — is that they are investing their capital in emerging economies around the world where the profits are guaranteed and enormous profits are fairly certain, as well.   No array of incentives would change that either — because it is not about uncertainty — or taxes — or regulation — it is simply about where they can go and make the most money with the least risk and expense.  What’s the old Thunderbird School of International Business shibboleth?  “You go where you can get the raw materials and resources for the factories is least expensive  — take  it to where labor is cheapest (China, Mexico, Vietnam, India, Brazil) and the factories in those slave-labor countries manufacture the finished goods for you — then they ship the finished goods to the largest, wealthiest, consumer countries to maximize their profits. It’s just business.  It’s just that the well-being of the American working people are not part of the business equation when deciding where and how to invest their corporate profits and the Congressionally mandated loop-holes, deductions, and write-0ffs.

__________________________________________________________________________

All that is happening now is that corporations are just biding their time during this transition period until the emerging sub-middle-classes emerge in these  “third-world” countries — and then the corporations will have no need whatsoever for an American middle-class — they will just sell these cheap product where they make them — and they won’t have the added expense of shipping them across the ocean — or trucking them up from Mexico.  They are willing to go slowly, so that their wages only increase a tiny bit at a time — until those cheap laborers can buy the cheapest of Chinese and developing country-manufactured products.   So despite what politicians tell you, that is the underlying transformation in world economies politicians are trying to straddle.  How do they placate the ultra rich enough to keep them donating to their campaign coffers and keep the wealthy  inviting them on trips and to their American Legislative Exchange Councils, golf tournaments, and all expense paid “information-gathering” junkets — and keep them funding “Super-Pacs” and such that support them –  as long as possible — while trying to make the “needy” and “entitlement” dependent American middle-class and working poor people  pay for these “transition to economic royalism” costs — in the name of “individual accountability”,  “responsible” deficit reduction,  and the supposedly ubiquitous desire for “smaller government” rampant across America.

____________________________________________________________________________

If the yes men for the “economic royalists” run out in press conferences and cry that if we tax millionaire and billionaire “job creators” one plug nickel more it will just hurt them so much and cause them so many jitters and – and oh so much “uncertainty” that they’ll just be too nervous to create any more jobs at all. These Republican alter boys actually have it correct, though, when they say their corporate priests and masters are job creators – they’re just not creating any of those jobs here in the United States any more. They are creating jobs in what were — and in many cases still are — third world countries where they are paying $0.30 to $3.00 per hour for slave labor, with no benefits and no environmental safety guidelines or any safety regulations protecting workers to speak of.

__________________________________________________________________________

So I have an idea: if they are job creators, let’s reward them for those jobs that they create. Let’s take away all the tax-loop holes, investments tax credits, and special tax breaks on un-earned income.  Let’s give a $10,000 tax credit for each job they create in the United States and charge them a $10,000 tax surcharge for each job they out-source – and /or each person they lay off.  These “job creators” — the ones Boehner, Kantor, McConnel, Ryan ( and lately, George W. Bush himself — worry over and “pity-pot” about, should love that.

____________________________________________________________________________

In fact, let’s really reward these job creators!  Let’s make the law the “job creator incentive law”  retro-active to 1980. All you mighty job creators are really going to get rich, now, right?  Oh come on. It’s just what you always wanted — to be recognized and rewarded for the being the job creators that you are.  And if you’re real  “job creators”, you’re going to make out like the bandits you are — or at least that you always wanted to be!  You get paid by the United States government and the American people for doing what you wanted to do all along, anyway.  Make money!

Obama Proposes Tax Cut for Corporations in Response To Taxation and Income Inequality

By Frank Byronn Glenn President Obama’s proposal to lower the corporate income tax rate is fraught with peril.  It may even be disingenuous.

The marginal tax rate today is 35%.  When John F. Kennedy was sworn in as President in 1960, the marginal tax rate was 91%.  He proposed that because of the excessive tax breaks and loop-holes enjoyed by corporations and wealthy individuals we could lower the official marginal tax rate to, say, 72%, eliminate the loop-holes and come out the  same or  perhaps with even more revenue.  Cut the tax rate, he said, and broaden the base.

That’s what Obama is saying.

It is true that the idea could work – in a vacuum.  The reality is that once you lower the marginal tax rate and change or eliminate a few loop-holes, the inexorable process of lobbyists pressing for new loop-holes and tax breaks – or restoration of the old ones – begins in earnest.

That same mantra has been used by the spend and cut Republicans since the 1960′s.  It never works. The end result is just lower tax rates and the same or more tax breaks and loop-holes for rich people, because Congress, when the curtain is drawn back, basically represent the interests of their largest campaign contributors.

There may be a carrot and a stick silver lining, however, and that’s what I am hoping.  If, as the pre-release press suggests, the incentives to out-source jobs to an incentive to bring jobs back to the United States, then this deal with the devil still may benefit American workers to some degree — over time.