In a New York Times op-ed, American Civil Liberties Union Director Anthony Romero called on President Obama to at least issue a pardon to Bush and Cheney and Bush administration officials for the crime of torture. In “Pardon Bush and Those Who Tortured,” Romero writes: “… it may be the only way to establish, once and for all, that torture is illegal.”
Many Democrats examining what happened in the 2014 midterms are asking “what did the voters want?” But the right question is why did only 36.4 percent of potential voters bother to register and vote? Obviously Democrats did not give those voters a good enough reason to take the trouble. Is the Democratic Party relevant anymore?
“New Coke” Democrats
In 1985 Coca-Cola was the market leader, but Pepsi was gaining market share. Coca-Cola’s executives panicked and reformulated its flavor to taste like the more-sugary Pepsi. But Pepsi drinkers already drank Pepsi and Coca-Cola drinkers were left with no brand that they liked. If this sounds like an analogy to the Democratic Party consultants who keep urging Democratic candidates and politicians to be more like Republicans, that’s because it is.
Democrats were considered the majority party from the time of Roosevelt’s New Deal until the 1980s. All they had to do to win was to get a high enough voter turnout. Democratic operations were more about Get Out The Vote (GOTV) than giving people reasons to vote for Democrats instead of Republicans. They just assumed most people agreed with them – because most people agreed with them. But that time has passed.
The election is over. Congress is back in Washington. The first order of business after the election is to give big tax breaks to the corporations – $450 billion worth. Fortunately, President Obama is trying to do something about this.
Every year Congress renews a package of “temporary” corporate tax breaks. The renewal process is called “tax extenders” because they extend the term of these temporary breaks. So now the Congress is working on this year’s extenders package, except this time it wants to just make many of them (the ones that mostly give handouts to giant corporations and campaign donors) permanent. The Washington Post calls this process “a periodic bonanza for lobbyists.”
A few of the special tax breaks in the extenders package are really good and serve an important purpose. For example, part of the package is tax credits that provide incentives to invest in renewable energy. But most others are just giveaways and handouts to the already-wealthy, like depreciation tax breaks for people who own racehorses. (Yes, really.) Even worse, some of these are loopholes that actually encourage corporations to shift U.S. profits offshore into tax havens. (Yes, really.)
The good breaks are used to grease the wheels to slip these special favors through – as in “if you want to get those wind tax credits you’re going to have to pass a tax break for Mitt Romney’s racehorses.”
The media is reporting that Congress is near a deal on these extenders. The deal kills several “good” tax breaks that help working people and the middle class, like an expanded child tax credit for the working poor and expanded earned-income credit. The deal phases out the wind power tax credit after 2017.
Rep. Chris Van Hollen (D-Md.) pointed out that companies that renounce their U.S. citizenship would even get special breaks from this deal:
“The package would provide a permanent boon to large corporations, even those that renounce their U.S. citizenship and invert,” he said. “And adding insult to injury, the proposed deal chooses to leave behind working families and would make things harder for millions of Americans. …The overall package is simply unacceptable and adds more than $400 billion to the debt. We need to grow the middle class, not punish those working hard to get by while always giving preferences and priority treatment to big corporations who can hire high-priced, well-funded lobbyists.”
Not Paid For
These tax breaks are not “paid for” – they just add to the deficit. Remember how Congress rejected providing benefits for the long-term unemployed because they were not “paid for?” Congress won’t fix the country’s infrastructure because doing so is not “paid for.” Even disaster relief had to be “paid for!”
But none of these corporate tax breaks and loopholes being considered are “paid for” – but for some reason this isn’t a problem – this time. Because racehorses. Anyway, we’re only talking about $450 billion.
President Barack Obama would veto an emerging $450 billion tax cut deal coming together in the Senate because it doesn’t do enough for the middle class, according to the White House.
“The President would veto the proposed deal because it would provide permanent tax breaks to help well-connected corporations while neglecting working families,” said Jen Friedman, deputy White House press secretary.
Democrats should to learn a lesson from this year’s election campaigns: Democrats should be Democrats. Democrats should not try to run away from the things Democrats stand for. It doesn’t work.
Supporting Republicans ideas is not going to win you Republican votes. It won’t stop Republicans from calling you a socialist, communist, extremist, whatever. And it is not going to give you any cover at all when the public gets their chance to weigh in. If you do things the public doesn’t like it is going to come back and bite you. Unless you are campaigning for the job of post-defeat lobbyist, embracing Republican ideas so you can call yourself a “moderate” or a “centrist” buys you nothing.
Exhibit A: the “centrist” Simpson-Bowles deficit-cutting plan. Right now Republicans are running campaign ads attacking Democrats who supported the Simpson-Bowles deficit-cutting plan, because it proposed “entitlement reform” that would cut Social Security and Medicare benefits and raise the retirement age.
Here is a Republicans ad running in North Carolina. “Hagan is a big believer in a controversial plan that raises the retirement age…” referring to the Simpson-Bowles deficit reduction plan:
Here is a Republican ad running in Georgia attacking John Barrow for supporting Simpson-Bowles:
Democrats should never forget that Republicans have been running ad after ad after attack ad like these, going after Democrats who supported deficit “entitlement reform.”
Exhibit B: In Arkansas Sen. Mark Pryor voted against background checks for people buying guns at gun shows. How did that work out? Answer: The National Rifle Association (NRA) is spending $1.3 million to defeat Pryor in Arkansas.
Lesson: Democrats Should Be Democrats, Not Try To Be Republicans
This election should provide a lesson to Democrats, forever, to remain Democrats and not fall for DC elite calls to be “moderates” by supporting things like cutting entitlements or otherwise acting like Republicans. If you think you are going to be praised and rewarded for following the conservative/corporate line — ain’t gonna happen.
Democrats are for things like:
Helping the poor.
Higher minimum wages.
Higher taxes on the wealthy and corporations to fund the fruits of democracy.
Good and well-funded public schools and colleges.
Maintaining and modernizing the country’s infrastructure.
Protecting the environment.
Regulating giant corporations and Wall Street (that includes airlines and telecommunications).
Helping people join unions.
Democrats are against things like:
“Fast tracking” trade deals that send jobs out of the country.
Letting corporations get away with ripping people off and deliver bad or harmful or fraudulent products.
Letting corporations use their size and power to keep other companies from innovating and competing.
Letting corporations pollute the environment and harm workers.
Trade deals like NAFTA have helped create terrible inequality by outsourcing jobs to low-wage countries so “investors” can pocket the wage difference. These corporate trade deals also create “corporate courts” that bypass the borders of democracy and place billionaires and their corporations beyond the reach of governments when it comes to deciding on laws and regulations that protect citizens.
There are more of these “NAFTA-style” being negotiated right now. These are much bigger than the trade deals that have already created such inequality and corporate hegemony. If Republicans take the Senate and keep the House they will pass these new trade deals and clinch this deal worldwide – and President Obama has already indicated he will sign them. This is serious so try to talk a few non-voting friends into showing up this time.
Trade Deals Being Negotiated Now
The big corporations are pushing our government to finalize three very big trade agreements: the Trans-Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP) and the Trade in Services Agreement (TISA). These are not really trade deals but cover all kinds of issues, including the ability to place corporate rights alongside or above the rights of countries to make their own laws.
These “trade” deals will, if passed by Congress and signed by the president, cement a corporate right to profits above the rights of citizens to pass laws to protect our health, environment, wages, working conditions and anything else we might decide to do to make our lives better. That’s right, these trade agreements place corporate rights above national sovereignty, and they do this behind a veil of secrecy.
These deals, like NAFTA and other “NAFTA-style” agreements, have “investor-state dispute settlement” (ISDS) provisions that let giant corporations sue governments for passing laws that might cause investors to make lower profits. For example, these (and current) agreements allow tobacco companies to stop governments from engaging in anti-smoking initiatives to protect the health of their citizens. These suits do not come up in front of government courts. These are adjudicated by corporate-controlled tribunals of private arbitrators — “corporate courts” set up by these trade agreements. The “judges” are often corporate lawyers who just happen to also represent global investors and whose livelihood depends on the very corporations they are judging.
These deals are being negotiated with only the interests of the giant corporations at the table. Citizens groups, labor groups, consumer groups, environmental groups, health groups and other representatives of stakeholders in the world’s economy are excluded from the process.
Why is our own government negotiating a deal that gives so much to the big corporations and the billionaires behind them, and takes so much away from regular people? Rep. Alan Grayson (D-Fla.) sums it up, saying there are three kinds of people negotiating these agreements on behalf of our government:
People who used to work for the giant corporations that benefit from these agreements.
People who want to work for the giant corporations that benefit from these agreements.
People who used to work for the giant corporations that benefit from these agreements and want to work for the giant corporations that benefit from these agreements again.
Why would the giant corporations and the billionaires want these agreements? Because they clinch the deal and get them around the borders of democracy.
Wow, That Sounds Extreme
Trade deals are placing corporate rights above national sovereignty? They are intentionally undermining democracy? This sounds extreme. What kind of person would make such extreme accusations?
Yes, it sounds extreme. This is a dilemma progressives continually face when describing the agenda and actions of the corporate/conservative right. Because so much of what they are accomplishing is hidden behind a veil of secrecy, obfuscation and long-term step-by-step strategy (think frog in a pot with the water being heated slowly), and because people pay very little attention to the news and current events until something smacks them in the face (or wallet) you sound like a crazy extremist when you simply describe to people what is going on.
They’re trying to privatize Medicare? What an extreme accusation to make.
They are trying to make it hard for legitimate citizens to vote? Wow, what an extreme statement.
They’re trying to get rid of public schools? What an extreme thing to say.
They’re trying to engineer a cut in everyone’s pay and benefits? What an extreme … oh, wait, we all can see now that they did that.
The corporate right depends on this one-two punch of secrecy and a poorly informed public to get their way.
Tea-Party Republicans vs. Chamber Of Commerce Republicans
So far enough Democrats have opposed these trade deals to keep the Congress from passing the “fast-track” trade promotion authority that is used to push them through. Fast track requires Congress to rush to a vote immediately after the treaty is made public, prevents Congress from amending the agreements and prevents filibusters from blocking them in the Senate. But if Republicans take the Senate and keep the House, there may no longer be enough non-corporate-controlled members of Congress to keep this from happening.
However, there would still be one hope for blocking these trade deals, even if Republicans take the Senate, and that’s the party’s tea party wing.
These trade agreements undermine the sovereignty of our country. They allow others to override our own ability as a country to make our own laws. This is one place where the tea party gets it squarely right. And this is one place where the tea party wing of the Republican Party is at war with the Chamber of Commerce (corporate-controlled) wing of the Republicans. National sovereignty is important to tea party Republicans, so they oppose these agreements. Also they oppose them because they are favored by President Obama. “Don’t let Obama negotiate away our national sovereignty” is a tea party rallying cry.
If Republicans take the Senate, let’s hope this appreciation of national sovereignty overrides their appreciation of corporate cash.
“It is hard to understate the intensity of the response to the role of big money.”
Mike Lux, writing at The Huffington Post in “Four Weeks Out: What Will Be the Narrative of Election 2014?,” echoes something that we have been pounding on here at OurFuture.org: Democrats who campaign with a populist message will do better than Democrats who support the “centrist” – big corporate, Wall Street – positions.
In his post, Lux writes:
In a fascinating memo from Stan Greenberg and James Carville’s Democracy Corps and Page Gardner at Women’s Voices Women’s Vote Action Fund, they suggest that there is a modest but nonetheless quite significant trend toward Democratic candidates in the battleground Senate races. … They argue that a populist message especially focused on women voters’ top economic concerns and attacking the big money corporate interests that want to “make sure CEOs paid no higher taxes and that their loopholes are protected, while working men and women struggle” moves these razor-tight races an average of 4 crucial points, from -2 to +2.
… Democrats should be driving the story of the corrupting influence of big money in politics. As the DCorps memo states: “It is hard to understate the intensity of the response to the role of big money.”
I’m going to repeat that. Focusing “on women voters’ top economic concerns and attacking the big money corporate interests that want to “make sure CEOs paid no higher taxes and that their loopholes are protected, while working men and women struggle” moves these razor-tight races an average of 4 crucial points, from -2 to +2.”
How can Democrats say this? Lux suggests this:
The real-world narrative Democrats should tell is about the spending of the Koch brothers and their agenda, which they laid out at their secret meeting in June: no minimum wage, no Social Security, no public education or student loans, lower taxes for the wealthy, and less regulations. “Because we can make more in profit,” said their so-called “grand-strategist” Richard Fink.
Not a bad idea, considering that the Koch brothers network is driving much of the Republican party at this point, and certainly their money is driving much of the election.
A top economic official in the White House on Tuesday expressed confidence that the next Congress can pass corporate tax reform.
… Obama has proposed lowering the corporate statutory rate from 35 percent to the high-20s while eliminating many deductions. Camp also proposed to lower the rate, but down to the mid-20s.
Camp has proposed shielding most of the profits corporations make offshore from U.S. taxation, while Obama has called for a minimum tax on global earnings.
Why is it that any time you hear the word “reform” coming out of Washington, it always ends badly for about 99 percent of us? They talk about entitlement “reform” – meaning cutting Social Security and Medicare. They talk about regulation “reform” – meaning our food and workplaces are going to be less safe. They talk about spending “reform” – meaning doing less of the things that make We the People’s lives better. (They never “reform” the military budget. It is more than double what it was when ‘W’ Bush took office. Because we have to defend against the Soviet Union.)
“Reform” is lobbyist-speak for opening up the floodgates, hanging the flags out, lighting the savings accounts on fire, letting dozens of blackbirds fly out of the pie, letting the horses out of the barn and generally fleecing the citizenry.
Are We the People the boss of the corporations, or are the corporations the boss of We the People? The Securities and Exchange Commission (SEC) needs to be reminded which way that question is supposed to be answered.
The SEC is the agency set up by We the People to “protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.” The SEC states that “all investors, whether large institutions or private individuals, should have access to certain basic facts about an investment prior to buying it, and so long as they hold it. … Only through the steady flow of timely, comprehensive, and accurate information can people make sound investment decisions.”
One would think those basic corporate facts and timely, comprehensive, and accurate information needed by investors would include access to a company’s tax returns. One would think they would include information about where the executives of the company are spending millions and millions of the company’s dollars. And one would think they would include disclosure of the ratio of CEO “pay ratio” of compensation to worker compensation, as required by the 2010 Dodd-Frank law.
But so far the SEC is not asking corporations to provide investors and the public with this information. Don’t shareholders — and We the People — deserve to know what these companies are really doing and how much they are really making?
What Are These Companies Really Earning?
Companies tell their investors that they are making tons of money. But to get out of paying taxes the same companies tell the IRS something entirely different. Don’t investors have a right to know what the companies they invest in are telling the tax office?
“[There is an] array of eye-glazingly complicated tax avoidance strategies adopted by America’s biggest companies … The basic rationale behind tax transparency is that shareholders (and creditors and the general public) deserve to know what publicly traded companies are doing, particularly if complicated tax acrobatics are distorting their operational and investment decisions.”
She points out that we started out requiring this.
This is not a new idea. In fact, when the modern federal corporate income tax was introduced in 1909, it came with a requirement to disclose the returns. Such transparency mandates were fought over bitterly for the next couple of decades, and U.S. returns have been confidential since 1935.
What About Company “Donations”?
If a company’s executives are literally giving the company’s money away to politicians, “charities” (maybe run by a relative), “think tanks” (that employ relatives, etc.) or other worthy recipients, shouldn’t investors be provided with information about who is getting the company’s money, and how much they are getting? (Milton Friedman notably claimed that such donations are “theft” from the company.)
(Note: If a company gives money to a politician, and is not simply “giving the money away” for nothing — with absolutely no expectation of getting anything in return — that would be bribery, under the law.)
The campaign to lift the veil on secret corporate campaign donations hit a milestone on Thursday. More than 1 million comments have been submitted to the US Securities and Exchange Commission calling for a requirement that corporations disclose political spending to their shareholders—ten times more than for any other rule-making petition to the SEC, according to the Corporate Reform Coalition.
“Investors want to know how their money is being spent,” Tim Smith, director of shareholder engagement at the firm Walden Asset Management, said at a press conference outside the SEC in Washington. A sign over his right shoulder read, “Your money is being invested in secret. Why is the SEC doing nothing?”
Why Is SEC Sitting On These Rules?
So why is the SEC just sitting on these proposals to disclose basic information to shareholders? In the case of the CEO pay ratio, this is even required by a law passed almost 5 years ago.
Could it be that the people working at the SEC really do know who is the boss now? (“Boss” as in the writer of the big paycheck and future employer.) Maybe, and maybe not. Who’s to say?
A revolving door blurs the lines between one of the nation’s most important regulatory agencies and the interests it regulates. Former employees of the Securities and Exchange Commission (SEC) routinely help corporations try to influence SEC rulemaking, counter the agency’s investigations of suspected wrongdoing, soften the blow of SEC enforcement actions, block shareholder proposals, and win exemptions from federal law. POGO’s report examines many manifestations of the revolving door, analyzes how the revolving door can influence the SEC, and explores how to mitigate the most harmful effects.
At the time of the report’s release Bloomberg reported,
From 2001 to 2010, POGO says, more than 400 SEC alumni filed about 2,000 disclosure forms (which POGO obtained using the Freedom of Information Act) saying they planned to represent an employer before the SEC. That may vastly understate the problem because, as POGO points out, former SEC employees must file such statements for only two years after departing.
The SEC has exempted some senior employees (even sometimes blacking out their names on SEC documents) from a one-year cooling-off period during which they are barred from representing clients before the agency, POGO found.
With her seat barely cold at the chairmanship of the Securities and Exchange Commission, Schapiro will become a managing director at a financial consulting and lobbying firm that has hired a slew of former financial regulators over the last several years and that represents for many a nexus of the cozy relations between banks and their regulators.
Are We the People the boss of the corporations, or are the corporations the boss of We the People? Who’s to say? Not the SEC, apparently.
We have an election where Democrats are in trouble and could lose the Senate, and we have a “pre-candidate” with the supposedly highest polling numbers for any pre-candidate in history.
I smell a disconnect. Why isn’t the highly popular Hillary Clinton going from state to state campaigning for Senate Democrats, tirelessly doing everything she can to help Democrats keep the Senate?
I feel like Hillary is sitting on sidelines while we are fighting in the streets. As far as I can tell she is not even asking her extensive list of followers to do something, never mind showing up herself.
President Obama is considering a delay of his most controversial proposals to revamp immigration laws through executive action until after the midterm elections in November, mindful of the electoral peril for Democratic Senate candidates, according to allies of the administration who have knowledge of White House deliberations.
Well there goes any hope of energizing “the base” to come out and vote in November. No wonder people don’t bother to vote anymore.
Why are they doing this?
“Such a move by the president, some senior officials worry, could set off a pitched fight with Republicans and dash hopes for Democratic Senate candidates running in Arkansas, Louisiana, North Carolina and potentially in Iowa.”
Right, because this will persuade all those right-wing anti-immigration voters to vote for Democrats.
This tells all the pro-Democrat voters in those states not to bother to vote.
If Obama does this he is going back on his promise in June to do something “by the end of summer” to help the millions of people trapped by Republican obstruction.
From the NY Times story: “Representative Luis V. Gutiérrez, Democrat of Illinois, who has at times been critical of the administration’s approach, said that delay “comes at a tremendous cost in terms of families split up and children placed in foster care.”
Doing the right thing is always the right thing politically.
This one is simply outrageous. Corporations currently owe up to $700 billion in unpaid, “deferred” taxes. The country needs the money – partly because these companies owe so much in taxes. Which of the following choices should the country make?
1. Tell the companies to pay up what they owe, bringing us hundreds of billions to use now and tens of billions a year more from now on.
2. Let them off the hook from ever paying most what they owe, if only they please would let us have a little bit of it now.
Who Is The Boss Of Whom?
The choice depends on who you think is supposed to be the boss of whom. If you believe that We the People are in charge of this country, then obviously you’d say these corporations should just pay the taxes they owe. But if the corporations are in charge of us they’ll tell us they aren’t going to pay these taxes unless we give them something.
Not surprisingly, Congress appears to be working toward option ‘2.’ It’s called a “repatriation tax holiday.” They are proposing to tell the companies that moved jobs, factories and profit centers out of the country that it was the right thing to do. Unfortunately that will tell companies that didn’t do these things that they were chumps.
What Is A Tax Holiday?
Here is what’s going on. Giant, multinational U.S. corporations owe our government up to $700 billion in taxes on about $2 trillion in profits they have made (or made it look like they made) outside of the country. But there is a loophole that lets them hold off on paying those taxes owed until they “bring the money home.” So of course, many corporations have been engaged in all kinds of schemes to make it look like they make their money elsewhere – and/or move jobs, factories and profit centers out of the country.
[Sen. Harry] Reid and [Sen. Ron] Paul are quietly pressing for a one-time tax “holiday” — a special and lucrative tax deduction — to lure multinational corporations to bring profits home from overseas, producing a sudden windfall.
Instead of telling these corporations that it’s time to pay up, it looks like Congress is preparing to just let them keep much (85 percent) of the money. It’s called a “tax holiday.”
What is the “conflict” the headline talks about? It isn’t a conflict between those who want to hand corporations hundreds of billions of dollars and those who do not want to. The conflict is over how to hand them the money!
Senator Ron Wyden, Democrat of Oregon, the Finance Committee chairman, and Senator Orrin G. Hatch of Utah, the ranking Republican, want that money to help smooth passage of a broad rewrite of the tax code.
So if Senator Reid is on board for a tax holiday and Senator Wyden is on board for a tax holiday, it looks like the idea of giving this huge amount of cash to these corporations is baked in to the thinking in the Senate. And we’re talking about Democrats here. One side wants (Reid) to give them a tax holiday and get a little bit to use to pay for infrastructure, the other side (Wyden) wants to use it as a bribe to get these giant corporations to let the U.S. government “reform” the tax laws. Both sides are conceding that they’ll accept a tax holiday.
But no one in this discussion is just saying, “Hey, we’d get up to $700 billion and tens of billions every year from now on if we just told these companies to pay the taxes they owe.”
The cost: At Least $95.8 Billion
The idea is to give these companies an 85 percent deduction – the “tax holiday” – on their foreign profits and only taxing 15 percent of the profits. In other words, instead of taxing $2 trillion of profits being held out of the country they’ll only tax $300 billion. If these corporations “bring the money home.”
Bloomberg News looks at the cost of this, in “Repatriation Tax Holiday Would Cost U.S. $95.8 Billion.” The “holiday” would bring in a quick $19.6 billion, but would cost $95.8 billion of tax revenue that would come in anyway over the next decade with no changes – not even making these companies just pay up. (Note: This calculation assumes Congress won’t just tell these companies to just pay their taxes. That would bring in up to $700 billion at the top tax rate of 35 percent and tens of billions a year from now on. Companies can deduct any taxes already paid elsewhere, so “up to” means $700 billion minus taxes paid elsewhere.)
An Engineered “Crisis”
That’s right, after all these years of propaganda about budget deficits and the hostage-taking and the “fiscal cliff” and the “debt ceiling” and the sequester and all the resulting budget cuts in essential services and “austerity” and how this has held back the recovery … it looks like Congress is going to just let companies off from paying hundreds of billions of taxes they already owe. This is not about passing another tax break/subsidy, etc. These are taxes that are due and payable on profits that have already been made but that these companies are keeping outside of the country (and away from their shareholders).
Why would Congress even consider letting these corporations off from paying the taxes they owe? Because of rules about not increasing the deficit Congress “needs” the money. This is a “realpolitik” deal, recognizing that the companies have enough power to keep Congress from just making them pay up what they owe. The thinking is they can appease the corporations with an 85 percent tax holiday to get them to pay at least 15 percent of that they owe.
This is another engineered “crisis” where the country is made to believe that deficits are keeping us from doing things we need to do. We need to fund transportation infrastructure, we can’t borrow the money to invest in things like this that make our economy more efficient, hence the need to “incentivize” the corporations to please bring home some of the money they owe us.
They Did This In 2004 And It Made Things Worse
In 2004 corporations ran the same scam on Congress, except that time they promised to use the money they brought back to “create jobs.” So what happened?
In 2011 the Institute for Policy Studies (IPS) looked at the results of the 2004 tax holiday and found that “their holiday didn’t just fail to create the promised jobs. Their holiday enriched corporations that actually destroyed jobs in the months right after they received their tax windfall.” IPS found that 58 multinationals who used the “American Job Creation Act of 2004″ tax holiday not only immediately laid off tens of thousands, they continued laying off, and laid off close to 600,000 workers between 2004 and now. From the IPS summary of the study,
One government study looking at the first two years after the repatriation windfall found that 12 of the top recipients laid off more than 67,000 American workers. These firms collectively brought back home more than $100 billion …
According to IPS, the companies that gained the most from the tax holiday actually cut jobs, on top of that they used the tax gift money to buy back their own stock, increasing its value, and pay out dividends, both thereby enriching executives and shareholders.
(This is from 2011. Another half a trillion of profits have been shifted offshore since then.)
In 2004, when Congress approved a similar holiday, lawmakers vowed never to do it again. If it became a habit, they reasoned, companies would keep their profits overseas waiting for the next tax holiday. That, the bipartisan Joint Committee on Taxation explained, is the idea’s “moral hazard problem.”
The 2004 tax holiday only made things worse because companies realized they could get out of paying taxes entirely if they moved profits offshore and held out until the next holiday season. If we do it again, every company will be compelled to move jobs, factories and profit centers out of the country to stay competitive.
They are going to try to sneak this through under the radar. Maybe We the People can stop it if we make enough noise.
Word is there’s an economic recovery going on. But approximately 99 percent of us have no reason to believe that.
The public sees that the government bailed out the biggest banks and that the “recovery” is going really well for a very few people. But most Americans are actually falling behind, and know it. Wages are still stagnant at best and the minimum wage has fallen so far behind that people working full time remain in poverty. Unemployment is down largely because of people “leaving the workforce.” And all along government services are being cut and cut and cut.
People see the government working for a wealthy few at the top, and against the rest of us. People see the rigged game at work against them. This is not just an economic and human catastrophe. With an election coming, key Democratic constituencies have simply been left behind during the Obama administration. “Are you better off now than you were 4 or 8 years ago? HELL NO!”
So this could become a political catastrophe as well, potentially bringing the return of the very people and conditions that got the country into this mess.
An Ongoing Catastrophe For Regular People
What Washington has done since the “Reagan Revolution” and especially since the 2008 crash has benefited the few, usually at the expense of the general public. Washington rescued the big banks, and left homeowners and the rest of us to fend for ourselves.
Anti-inflation monetary policy has been a catastrophe for regular people. (Protecting Wall Street at the expense of Main Street? Really?)
Washington’s austerity, budget-cutting fixation has been a catastrophe for regular people. (Laying off hundreds of thousands of public employees, cutting public investment and cutting back on the safety net during an unemployment crisis? Really?)
Washington’s “free trade” policies have been great for giant, multinational corporations but have been a catastrophe for regular people, sending millions upon millions of jobs out of the country. (Not even confronting blatant currency manipulation that is costing 5.8 million jobs? Really?)
Washington’s corporate tax policies have been a catastrophe for regular people. (Giving companies huge tax breaks for moving jobs, factories and profit centers out of the country? Really?)
One catastrophe after another hitting regular people. And people see it coming from a system that is rigged against them, working just fine for a wealthy few.
But that was all it did, and that was it. It worked but it was just not enough to get things going again. And now it’s five years later. As most people can see, after the stimulus the Obama administration capitulated to Republican/Wall Street demands for austerity – and outright budget blackmail. The President even at times reinforced the right’s ideological position by boasting about government progress in balancing its books rather than emphasizing the human cost of not boosting government resources to drive job creation. Democrats even voted to cut food stamp spending and the president signed the bill! (Cutting Food Stamps in the middle of a national jobs and poverty emergency? Really?)
We demand full employment! Full employment means there is a job for everyone who wants a job. There is simply no reason whatsoever that we can’t have full employment – except for policies that are intentionally keeping us from having full employment.
We demand full employment! Why isn’t our government stepping up and just hiring all of the people who need jobs? It’s not as if there are not enough things that need to be done. Our infrastructure is in serious need of repair. We need to retrofit millions of buildings and homes in the country to be energy efficient. We need to build a modern energy grid to bring energy from wind farms that we need to build in the plains states (where the wind is) to the cities and industrial centers (where the need is). We need to cut the number of children per classroom in half. We need to do … so many things. Why isn’t our government the employer of last resort, just hiring people to do those things we need done – in the middle of an employment emergency?
We demand full employment! Unemployment is a human and economic catastrophe. There are so many things our government could do besides direct hiring (which they should be doing). Our government could fix our job-sucking trade deals and balance the trade budget. Our government could demand that corporations return the trillions of dollars they are holding outside of the country to avoid paying the taxes due on that money. That’s a double whammy; take away the huge incentive to move jobs out of the country because of the tax break – and use the money they already owe to just hire millions of people!
The New Populism Conference
Two speakers at this week’s New Populism Conference, Rep. Keith Ellison (D-Minn.) and economist Jared Bernstein will talk about the importance of growth and jobs in order to bring about a rapid change in inequality.