Perry Glasser

50+ YEARS OF BEING SCREWED

In Business, Economics, Economy, Finance, Personal Finance, Politics, Wall Street on August 10, 2011 at 7:30 am

Dollar$ explains the stuff that makes people’s eyes glaze.

Wizards in the financial community in collusion with the Weasels in DC have for more than half a century made it possible for Buccaneers in corporate suites to grow rich in ways no one can think is fair or just.

Dollar$ does not lose sleep because people make money.  Dollar$ does not believe that capitalism is  abusive. Dollar$ LIKES business.

That’s why Dollar$ despairs over the lack of financial sophistication among  Citizens: while people are in a stupor debating the reality of angels and vampires,  Buccaneers are making off with our children’s futures.

Today’s subject of despair:  the tax code and how it exports jobs and wealth out of the US. This is not about a loophole–this is about a gaping chasm in common sense.  This calls for no tinkering–it calls for wholesale reform.

US corporations pay 35% taxes on profits.  Some will say that amount is punitive, others will say it is appropriate, others will say it is insufficient. We live in a democracy. We are supposed to debate such matters.

Tax policy, however, is not only about rates. It is just complicated enough that Citizens find their faces falling forward into their oatmeal in boredom. US tax policy for two generations now has been that if  profit is made off-shore, corporations  pay nothing until they bring that money back to the US. It’s called repatriation and it is terrible policy. With your face in the oatmeal, there is no incentive for Weasels to change bad policy, and the odd sound you hear is Buccaneers packing up US jobs and shipping them from  Flint, Michigan to Mexico.You cannot buy a TV made in America because that industry is gone offshore. The same is true of shoes and railroad cars.

Buccaneers shed alligator tears and explain that their corporations must remain competitive and so they have no choice; meanwhile, their Weasel allies maintain a law that encourages shipping jobs overseas.

Here is how it works:

If you were the Buccaneer CEO of US WIDGET, INC., chartered in Delaware, and sold 500 million widgets at $1.00 profit @  in Europe, Mexico, and Lower Slobbovia, would you bring home that $500 million  to fork over $175 million in taxes or would you build a new widget factory in Juarez?  Mind you, if there is a revolution  in Lower Slobbovia, US WIDGET, INC will expect–and get–military protection to “protect American interests,” as our elected Weasels will trip over themselves to get a good war going.

Aside: A “good war” is any conflict that distracts Citizens from noticing their kids are being uneducated, their parents left to die young, and that Buccaneers are in the 1% of the US population sucking in 40% of American wealth. In a good war, any Weasel worth reelection can wave a flag.

Weasels have been ducking their responsibility for crappy tax policy for more than 50 years. This is no secret. In 1961, John F Kennedy said, “The tax system must be adequate to meet our public needs. It must meet them fairly, calling on each of us to contribute his proper share to the cost of government. It must encourage efficient use of our resources. It must promote economic stability and stimulate economic growth….[yet] tax treatment…consistently favor(s) United States private investment abroad compared with investment in our own economy. ”

How long will we wait?  Tell the Weasals how pissed off you are.

A plan:

  1. Declare a tax holiday for corporations that repatriate money for the next 18 months. That’s right, lower that tax rate to zero. Eighteen months captures every fiscal year.
  2. Induce  companies like Apple Corp.,  bloated with cash, to get crazy and declare dividends or actually innovate in the US. For trickle down economics to work, someone has to open the faucet.
  3. At the end of 18 months, reset the tax rate  for all funds earned abroad and end the notion of repatriation being the prerequisite for taxation. Say 10%. Profit is profit wherever it is made, and US companies have an obligation to pay a fair share for US society .
  4. Either that, or incorporate non-US subsidiaries abroad and allow Buccaneers to pay the corporate tax rates in havens like Britain (20%), France (33%), or Norway (20%). Generous social programs call for high taxes. Make the choice to keep US profits in the US an easy choice.
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  1. A Glassbrain plan is a plan to be followed indeed! Well done sir.

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