American Businesses: Success Is Because Of Government, Not In Spite Of It
While big business whimpers about high statutory tax rates, the effective tax rate paid by most corporations in America is often far lower than most other developed nations (thanks to loopholes and accounting tricks). Meanwhile, corporate tax receipts accounted for 30 percent of US federal revenues in the mid-1950s. In 2009, they made up just 6.6 percent of federal revenue streams.
In other words, not only are big corporations funding a smaller percentage of our shared social safety net, they’re paying a smaller percentage into funding the future infrastructure that they desperately need.
Imagine if big business got its way and corporate taxes were slashed even further. How would businesses suffer?
What would Oprah and Henry Ford have done?
Imagine if, when Henry Ford wanted to start the Ford Motor Company, he had to not only drill for oil himself but also oversee the laying of pipelines and production infrastructure across government-owned land so his cars could have gas to make them go. And when the American auto industry was expanding in the 1940s and 50s creating jobs throughout the nation, imagine if Chrysler and General Motors had to not only build their own factories and assembly lines but actually plan and construct the roads and interstate highways for cars to drive on.
Imagine if Oprah had to regulate the television spectrum for herself and that at random, bandwidth pirates could intrude on broadcasts of the Oprah Winfrey Show because there was no Federal Communications Commission monitoring ownership of and access to the public airwaves.
Imagine if every restaurateur today had to invest in his or her own food safety teams to make sure the meat served isn’t toxic. Imagine if every small business in remote rural communities had to generate its own electricity on site because the government wouldn’t have helped fund the expansion of power lines to those distant places. Imagine if every corporation had to educate its entire workforce from childhood to adulthood because there were no public schools.
Bill Gates would have had to run phone lines.
What if, when Alexander Graham Bell invented the telephone, he couldn’t get a patent from the United States government to protect his idea? Or for that matter, if there had been no laws to protect private property and no law enforcement, Bell might have had to sit up all night with a gun guarding his invention – instead of going out in the world and figuring out how to use it. When Bill Gates wanted to start Microsoft, consider if instead of drawing on the government-created infrastructure of the original Internet (which he accessed early on in high school through the publicly funded University of Washington), Mr. Gates not only had to invent Windows, but also invent the entire World Wide Web and run the wiring for the phone lines that originally connected all his potential consumers.
When Warren Buffet launched his investing career that ultimately earned him billions, imagine if in addition to hiring lawyers to run his business, Mr. Buffett had to hire judges, too, and create entire court systems to oversee and enforce the types of binding contracts on which the stock market relies. For that matter, imagine if Buffet had to print his own currency and negotiate its value against the currencies of all other individual investors.e infrastructure of private sector success
Taxes fund the infrastructure of private sector success
Businesses in the United States don’t succeed in spite of our government, in many ways, they succeed because of our government. Through our taxes, we fund the legal and economic infrastructure of private sector success. By definition, those businesses that get the most out of that infrastructure are those that should give the most back.
At a time when economic conservatives want to slash spending that helps the poor and middle class rather than raise the already-low effective taxes of big business, it’s shameful that corporations like General Electric and Bank of America effectively pay no taxes. In the context of the larger American story, where successful businesses of today support the public infrastructure for the businesses of tomorrow, saying that corporations should pay even less is downright un-American.
By: Sally Kohn, AlterNet, July 22, 2011
Republican Paradox: The Party That Can’t Say Yes
For days, the White House has infuriated its Democratic allies in Congress by offering House Republicans more and more in exchange for a deal to raise the debt ceiling and prevent default. But it was never enough, and, on Friday evening, it became clear that it may never be enough. Speaker John Boehner again walked away from the “grand bargain” he had been negotiating with President Obama, leaving the country teetering on the brink of another economic collapse.
At the White House podium a few minutes later, the president radiated a righteous fury he rarely displays in public, finally placing the blame for this wholly unnecessary crisis squarely where it belongs: on Republicans who will do anything to upend his presidency and dismantle every social program they can find. “Can they say yes to anything?” he asked, noting the paradox of Republicans, who claim that financial responsibility and debt reduction are their biggest priorities, rejecting yet another deal that would have cut that debt by at least $3 trillion.
Mr. Obama, in fact, had already gone much too far in trying to make his deal palatable to House Republicans, offering to cut spending even further than the deficit plan proposed this week by the bipartisan “Gang of Six,” which includes some of the Senate’s most conservative members. The White House was willing to cut $1 trillion in domestic and defense spending and another $650 billion from Medicare, Medicaid and even Social Security.
Much of that savings would have come from raising the eligibility age for Medicare benefits and reducing the cost-of-living increases that elderly people depend on when receiving their health and pension benefits. It could have caused significant damage to some of the nation’s most vulnerable people.
The “bargain” would require that alongside these cuts, tax revenues would go up by $1.2 trillion, largely through a rewrite of the tax code to eliminate many deductions and loopholes. That’s substantially less in revenue than the $2 trillion in the “Gang of Six” plan. The problem is that while much of the cutting would start right away, most of the revenue increases would be put off, in part because a tax-code revision would take months, and in part to allow House Republicans to say they did not agree to any specific tax revenue increases.
Democratic lawmakers were rightly furious when they heard about these details this week, calling the plan wholly unbalanced. But, in the end, it was Mr. Boehner who torpedoed the talks. He said Friday evening that he and the president had come close to agreeing on $800 billion of the revenue increases (the equivalent of letting the upper-income Bush tax cuts expire as scheduled next year — not much of a heavy lift) but could not stomach another $400 billion the White House wanted to raise through ending tax loopholes and deductions.
So, on the eve of economic calamity, the Republicans killed an overly generous deal largely over a paltry $400 billion in deductions. Mr. Obama was willing to take considerable heat from his liberal critics over the deal, and the Republicans were not willing to do a thing to anger their Tea Party base. As the president forcefully said, there is no evidence that House Republicans are capable of making those tough decisions. If last-ditch talks beginning Saturday fail, they will have to take responsibility if the unimaginable — a government default — happens in 10 days and the checks stop going out.
By: The New York Times, Editorial, July 22, 2011
Debt Ceiling: What Killed The Deal And What Might Make One Happen This Week
There are a lot of good articles running through what happened between Thursday night, when a deal seemed likely, and Friday evening, when the talks fell apart. New reports suggest that Boehner is trying to prepare a deal by tomorrow evening, to prevent the markets from dropping Monday. So here’s the short version of what just happened, and where we’re likely to be going:
On Tuesday, the Gang of Six proposed a deal that would raise tax revenues by $2 trillion — which showed there was support among Senate Republicans for a deal that raised taxes by about $2 trillion. On Thursday, congressional Democrats rebelled over reports that the deal Boehner and Obama were negotiating had only $800 billion in new revenue, and it wasn’t even clear how those would be achieved. That night, Obama called Boehner looking for about $400 billion more in revenue to have something he could sell to Democrats. That would have brought the deal from $800 billion in revenue to $1.2 trillion in revenue. He didn’t get a call back until the next day at 5:30 p.m. — by which point the call was unnecessary. Boehner had already told the media that he was leaving the talks.
Republicans are emphasizing that the White House went from asking for $800 billion in revenue to $1.2 trillion. The word you’re hearing from them is “reneged,” but the White House emphasizes that negotiations were ongoing, and both sides were asking for more as they tried to figure out what they could both agree on and pass through Congress. Boehner, for instance, wanted further cuts to Medicaid, a trigger that would repeal the individual mandate and the Independent Payment Advisory Board if the entitlement cuts didn’t come through, and a tighter cap on discretionary spending. “They make it seem like the president made some ultimatum on $1.2 trillion in revenue,” says a senior administration official. “He didn’t. He said, ‘If you can’t do this, let’s figure out what we can do.’ ”
The “what we can do” would probably have been to ratchet back the entitlement cuts. Or maybe another solution would have been found. It’s hard to say because Boehner didn’t come back with a counteroffer. He simply left the negotiations.
But let’s zoom out on where the negotiations left off. Spending cuts would have totaled about $3 trillion, with a bit less than a trillion dollars of that coming from entitlements and other forms of mandatory spending. Revenue increases — none of which would have come from raising marginal tax rates — would have been between $800 billion and $1.2 trillion. The package would have extended the unemployment insurance and payroll tax cut provisions passed in the 2010 tax deal. All in all, that’s about a trillion dollars less in revenues than the Simpson-Bowles/Gang of Six deals advocated, and about $2.6 trillion less in revenue than simply letting the Bush tax cuts expire in 2012.
There’s a question as to whether this was the very best deal Republicans could get or simply close to it. But it’s hard to believe that it was so bad that it ended the talks. What seems likelier is that Boehner spent some time between Thursday and Friday talking to his members and found that his party simply didn’t support a deal with the White House. For one thing, a deal would include some amount of revenue, and that was a hard sell under any circumstances. For another, letting the president look like a dealmaker would potentially dim the GOP’s chances of retaking the White House in 2012. As my colleague George Will put it Thursday, a deal “would enable President Obama to run away from his record and run as a debt-reducing centrist.”
And so Boehner walked. Fundamentally, this looks like the same calculation that ended the last round of talks over a 4 trillion deal. What’s different this time is Boehner’s plan B: The Speaker of the House appears to believe that a deal struck between congressional leadership would perhaps be easier to sell to his members. Since it’s hard to see Nancy Pelosi and Harry Reid making deeper concessions than Obama did, it’s hard to see why that would be true, save that the deal might not look like such a victory for the White House.
Perhaps taking the benefit for Obama off the table will be enough. I’m doubtful. It’s more likely that what we’re really doing now is wasting time until the markets plummet and Boehner’s members decide that a deal is better than no deal. And there’s a very good chance that the first major show of market concern could come tomorrow night, when the Asian markets open. Boehner is hoping to present a plan by then, but a plan is very different from a deal. A plan is something politicians can come up with. A deal, we’re increasingly finding, is something that we need the markets to force.
By: Ezra Klein, Columnist, The Washington Post, July 23, 2011
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Does He Hate Everyone?: Rep Allen West’s Anger Issues
Does Allen West hate women? That’s a question explored by Michelle Goldberg at the Daily Beast, and the answer seems to be more that Allen West hates everyone. That doesn’t spare him from being a sexist, however, since his hatred for women has an ugly, gendered tone to it, as evidenced by his strange war on Debbie Wasserman Schultz, whose main sin seems to be a willingness to disagree with West while in possession of a vagina, causing West to claim she’s “not a Lady.” This, in turn, has caused a lot of speaking from feminist-minded women who are sick to the teeth of grown women being addressed in exactly the same terms that my grandmother used for me when I displayed bad manners … and I was five years old.
That said, calling a Democrat “not a Lady” and claiming that liberal women are the source of the country’s economic woes because we supposedly neuter men are, if anything, the least worrisome parts of the entire Allen West phenomenon. More disturbing is the evidence that West is unhinged and may have a personality disorder, but this not only doesn’t bother the voters who elected him into office, but seems to delight them. As Goldberg recounts, West acts erratically, lashes out randomly, has a victim complex that makes Sarah Palin look thick-skinned, and has acted out violently from his rage issues. But the space between Tea Party ideology and unhinged rage is whisker-thin.
West is a symptom of a larger problem: The most famous political force in the country right now, the Tea Party, has embraced a conservatism that is defined by being angry, bigoted, ignorant, and proud of it. It’s less about coherent politics and more a club for people who have a chip on their shoulders because they confuse getting the stink-eye for saying nutty, mean-spirited things with actual oppression.
It’s not that I’m clutching my pearls at colorful rhetoric and blatant mockery, two avenues of political discourse I enjoy quite a bit. But there is — or should be — a difference between a willingness to be abrasive and unhinged anger issues like West’s. The line should be drawn long before lionizing people for doing things like torturing prisoners of war, something West was disciplined by the Army for doing. Instead, we now live in a country where such vicious behavior can make you a hero in the eyes of the Tea Party, to the point where it elevates you to Congress.
By: Amanda Marcotte, Slate, July 22, 2011
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