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Why We Must Raise Taxes on Corporations and the Wealthy, Not Lower Them


#1

Why We Must Raise Taxes on Corporations and the Wealthy, Not Lower Them

Robert Reich

When Barack Obama was president, congressional Republicans were deficit hawks. They opposed almost everything Obama wanted to do by arguing it would increase the federal budget deficit.

But now that Republicans are planning giant tax cuts for corporations and the wealthy, they’ve stopped worrying about deficits.


#2

Well Bob, it’s certainly logical to make those who can afford to pay more in taxes, pay more.

Unfortunately, the two parties of the Duopoly will never do this, as the would be biting off the hand that feeds them.

It’s also very unfortunate that 95% of the voting electorate continues to support the parties of the Duopoly and the Murderous MIC.

How can we ever change the hearts and minds of these misguided folk who perpetuate putting corrupted politicians in high offices when there are choices like the Green Party who have asked for the opportunity to serve us all and live by their campaign slogan:

**People, Planet, and Peace over Profit **


#3

I do not pretend to be expert on optimal tax strategy. But corporate taxes have been easily mitigated or avoided in the US. Therefore it has been unreliable tax policy to base revenue on them. Better to lower corporate taxes and incline the personal income tax curve much more steeply to compensate - tax the money as it is removed from the corporation for personal use. This is the direction progressive European tax planners have been taking, and not only in Sweden. I don’t know why this is so hard to understand here; we should learn from others rather than reinvent the wheel so often. I know to US progressives this argument sounds counter-intuitive, and I regret now arguing against it when I first heard it from some economists.

My understanding is that, on average, US corporations pay about half the 35% rate and some even less or zero. Much of the “loopholes” are perfectly legal. Rather than try to make something this inefficient work, it may be better to shift more of the expected tax revenue burden to a more steeply inclined personal tax curve. This will be easier to enforce and collect.

I believe it is a mistake to regard corporations as persons - but as persons draw benefits from them, those persons should be taxed accordingly.

A rough analogy may be had with my US government I-Bonds. So long as I leave my money in them, the interest they earn is not taxed. Only when some of them are cashed for my personal use does the accrued interest get exposed to taxation. Likewise, so long as money stays in a corporation (as capital investment, machines and and materials), it should not be drained but allowed to produce.

Perhaps a lesser, more collectable tax, based on corporate size, could be retained as a sort of User’s Fee. This would reflect corporate use of public infrastructure. But it would be a fraction of the uncollectible corporate tax as now envisaged.


#5

Indeed - the Green Party.

I just bought Chris Hedges new book - actually a new type of book (first in a series) - “Unspeakable” (2016) - Chris Hedges talks with David Talbot.

I’m a big fan of Chris Hedges and his writing - and of his conclusions - one of which is that the USA needs a third party in charge. I would vote for the Greens, were I American. But it is no different in Canada, in fact, the former leader of the Alberta Liberal Party has a book coming out, “Oil’s Deep State” - his conclusion - both Alberta and Canada’s legislatures and main institutions have been captured by the oil business. This dovetails nicely with new whistle-blower Kevin Shipp of the CIA and his revelations about the deep state in the USA.

As for Robert Reich and his suggestions - yes logical - but again, if I read Chris Hedges aright - the time for logic is now history - other forces are incoming. Merkel in Germany has just seen this - and it will continue - everywhere.

For me - a free spirit for as long as I can remember - yet with experience in the capitalist world - I think the corporate entity needs to be eliminated, and a replacement found - I know - pie in the sky. Again - I buy Chris Hedges - the time for logic is past, and there is no fixing this puppy.

I am knowledgeable in science as well as capitalism - and we are in trouble - words do not suffice to describe what is coming. Yet it is no time for Jeremiahs nor Kassandras. Like tattletales - they are somehow not respectable - not honest - not of integrity.

I notice that Chris Hedges - for all his doom and gloom, refrains from prophecy - and instead tells it as it is - as he sees it.

This also I buy.

And it will be my modus operandi from now on - I honestly hope.

In any case - growth in the sense Robert Reich sees it - conventional economics - is dead in the water - as is democracy.

We need contraction - and tribal values - humanity respected along with the environment, and, as the Pope and Luther Standing Bear have told us - the two, respect for human beings and the natural world, are indissolubly linked, i.e., you cannot have one without the other.

This I also buy.

Note the Freudian slip by the use of the word ‘buy’ - hard to shake off the habits of a lifetime.

Lysander Spooner became an individual anarchist, and, while it may not be possible to run a modern country on this basis - we may have little need of this way of operating, as we descend into chaos.

I am reminded by an interesting article, “The Borders of Order”, that this may be nature’s way of ensuring its own survival.

I for one will try and work with the natural order of things rather than against.


#6

“The rich aren’t overtaxed.”

After all, being 'overtaxed" is for ‘the little people’ not the gazillionaires!


#7

The last sentence in your piece is, in my view, a major part of the problem facing the USA; the consumer culture and wishy-washy ethics and agency.


#8

If taxes were to be lowered on the wealthy & corporations, who is going to pay for all the grandiose schemes trump has in his “mind”. Certainly the 98% of us who are struggling can’t.


#9

Why don’t we hear more about the hypocrisy of the republicans-raising the debt ceiling–just as democrats and republicans voted to increase the military budget by 100b there is no outcry from the media pundits- how can you pay for this?Yet everyday I hear the mantra we can’t afford single payer-----and do notice the media really want this tax cut-----because the corporate overlords want this tax cut.

It was amazing though, MSNBC talked a little tiny bit about how republican donors were demanding this current Trump care vote. Maybe MSNBC will do some real reporting on who is behind the Tax cuts and the real cost to the economy.

Want to stimulate the economy----raise the minimum wage. give seniors a raise in ss because inflation has been going up.


#10

IMHO, Since korporations are now officially ‘people’, they should be paying FICA taxes (Medicare & Social Security) and the Alternative Minimum Tax.  And, as I’ve said before:

Return to Eisenhower-Era PRO$PERITY  —  Return to Eisenhower-Era TAX RATE$!!

Does “contraction” include a gradual decrease – rather than the current disastrous increase – in the number of humans on this planet?  “Tribal Values” only work when there’s a cohesive tribe with shared interests and mu­tual trust, and IIRC the optimum size of a tribe is around 100 to 120 members.  With hundreds of thousands – indeed millions – of people from widely different cultures crowded together in the cities, states & nations of our modern world, I don’t see how “Tribal Values” (other than one tribe against another) have any chance at all.

Yeah, MAYBE.   I for one am not going to hold my breath waiting for this to happen.  More likely Rachel (or was it Lawrence?) has been severely admonished, and that’s the last you’ll hear of it.   Don’t forget who owns MS­NBC, and those donors DO want their much-needed tax cuts!!


#11

I saw that report and I believe it was Rachel who reported that Sheldon Adelson, wanted his tax cut, and they even put a picture of his fat, pus covered face on the screen to let their viewers know who they were talking about.

Admonished, perhaps.

MSNBC is a tool of the Democratic Party from what I can see, pushing the Russians are Coming scenario.

We’ll see.


#12

Which casino(s) does that fat scumbag own?   IMHO, it’s time for a SERIOUS domestic BDS!!


#13

Unfortunately the majority of Congressional members and the residents of the White House are corrupt and perverse!


#14

Robert Reich just continues with the nonsense perpetrated on the American people by mainstream economists. His essay takes for granted the Mainstream view that the Fed is like a household economy. It has to get taxes and borrowings before it can spend.and it can therefore run out of money, or go broke. Deficit Hawks and Deficit doves. It’s all ridiculous nonsense. First off it is impossible for the government to get tax money before it can spend. We the people have to earn money before we can pay it and to know how much to pay. So Taxes come AFTER spending, always. Then the constitution empowers the government with total control over the dollar. It can create and spend whatever it chooses to do, independently of any tax. And it does. To grow the economy the federal government [any sovereign government, not states or territories] the Fed simply buys the governments debts, be they pensions or bombs, and no taxes are involved. That’s just the beginning, but it behooves Reich and his fellows to stop pulling the wool over our eyes. The lies are positively Evil!


#15

It is not the GDP growth in dollars that matters but instead it is how and to whom goes those dollars.
Productivity, how we measure it does matter, is it measured by goods produced, rate of man hours,
TOTAL of dollar change from last statistical measurement which are within the process of past comparisons.
Our system of governing is not the same as capitalism, capitalism is an economic system built upon amounts of capital gained or lost, and investment for future.
Our government was set up as a finanvial deficit on purpose, passage of spending bill needed to include the means to pay for it AND was for the next two years.
No matter the economic system decided by populace government itself should and was restricted into only those powers vested to it.
It was Congress that controlled the purse originally and it took both Houses to concur on the termss, not for the Executive branch to dictate and legislate.


#16

I never do get how Republicans under Bush/Cheney could give the rich two trillion in tax cuts (during a war) and we are also told that the deficit this created would amount to 10 trillion over the folowing decade (which it did) and when the tax cuts were extended rather than allowed to expire that then we end up looking at a deficit of twenty trillion? Does everyone simply forget prior rounds of tax cuts haven’t paid for themselves at all? Now we are being told that despite a deficit of twenty trillion that Republicans say we need to give the rich more tax cuts?

You get the sense that America’s citizenry are simply being drained of our collective wealth if not plundered as infrastructure is left to decay, social programs assaulted as if helping ordinary people is somehow useless and that working Americans are being thought of as prey by the wealthy elites. Do the rich in America not like nor respect their fellow countrymen? The rich like only the rich and aren’t even patriotic about doing so.

Then a single comment by Reich sticks in the mind >>> that Sanders free public education would cost $80 billion … and that the bill for the damage in Houston will be $150 billion. Looking at that you realize just how easily America could have a free college education which would sure as hell boost our economy by educating our public.

Then you realize that this $150 billion is the due bill for just one storm and one city while the years of climate change ahead will have a lot of ‘billion dollar damage bills’. Year after year those due bills will continue to mount both here in America and in the world’s economy.

The Republicans want to party hearty by racking up a ‘credit card’ deficit while ignoring or ‘denying’ the expected costs to come. They continue to weaken America and disguise the resulting fears of America’s decline by raising the military budget as if ‘more military’ were the only thing that America needs.

Republicans are actually economic incompetents but excellent thieves taking from the poor to give to the rich while our media acts like nobody can calculate (remember) the fiscal costs of previous Republican tax cuts. They talk about how high the deficits are but they never seem to get around to showing where those deficits came from!


#17

We are not there yet - granted - but it is my hope that this will change as the havoc we have and are wreaking on the entire planet, on all people and cultures, continues and accelerates. Necessity has merit - and that is important. The natural world speaks a language understood by all cultures.

As for tribal - I just can’t come up with another way to put it ? For me, as far back as I remember, I have had these values since childhood - long story - and this idea was not shared by most in my circle, including my own family. The tribal values I refer to encompass the quote which begins this reply - “shared interests and mutual trust” - of necessity - while embedded in the natural world.

Obviously it won’t be simple given the complex nature of the world today, nation states, cultures, language differences, the hierarchy civilization has created, along with phenomenal wealth disparity and utter contempt by the many for the many. Not only not simple, but many of our first rate minds have indeed already given up on us, and see no chance for a viable and proper future. They could be right - but it is not in my nature to give up - nor is it in our nature to do so. So I have to think - these negative thoughts are also the product of civilization - an over reliance on logic & reason. But my own personal experience, and my study of history and prehistory, suggests powerfully that reason and logic are not all they are cracked up to be. Sometimes you just have to imagine your way to victory. The heart is more powerful by orders of magnitude that cold intellectualism - and when you really think about it, in this coming of the bots - it is the only thing that keeps us human - and this too is what I mean when I refer to tribal values - the keeping of our sense of wonder at the world we all inhabit - the capacity for love and yes, hate too. Yet - the ability - at times - to direct the course of history for the good of all, and not just the few. You know, a man whose son had committed suicide pointed out to me that love and hate are not the two sides of the coin - they are both powerful emotions on the same side of the coin. On the other side is indifference - not caring - the most dangerous state of all.

And yes, population will have to come down along with contraction. But we know how to manage this - and always have, until the necessities of farming life and civilization demanded more people. The Lakota, according to Luther Standing Bear, would typically space out their children six years apart - similar to the Apache - this too is only natural - i.e., not complicated - until civilization.

Yes - tribe against tribe was the rule - but then - what really has changed there ? Bigger units, one against the other. But there is a progression visible here - one might call it a megatrend. Perhaps the unit size can progress until, in effect, there is only one Iroquois type Confederacy - the Iroquois seeing, finally, that there was mutual advantage in not fighting each other. We might be able to scale that thinking up to the world stage - if we are lucky.

I wouldn’t presume to predict the future - but I only point out that human history, tribal to the core, is in us all whether we like it or not - it is probably even genetically embedded.

So why not use it, but at the world, one Earth level ?

Tribal for me means exactly your quote - exactly what Pope Francis and Luther Standing Bear advocated and pointed out as necessary - we must learn, all over again, to respect each other and the environment - and both at the same time.

Surely this is possible - once extinction becomes a real possibility in the minds of all who inhabit this planet.