An Innovative Solution To Corporate Taxation

While we’re talking about taxes…

Over the weekend The Zero Hour with RJ Eskow interviewed economist Dean Baker, co-director of the Center for Economic and Policy Research, to talk about “A New Way to Make Corporations Pay Their Fair Share.”

The idea is, as Baker wrote last week in the LA Times, Instead of taxes, make corporations give the government stock,

If the tax reformers are serious, and I hope they are, here’s one simple way to largely eliminate the gaming opportunities that have made these people rich.

Instead of traditional taxes, the government could require corporations to turn over a portion of their stock, say 25%, in the form of non-voting shares. The government would benefit from any dividends or share buybacks but would have no voice in running the company.

This system would eliminate almost all opportunities for gaming since a company would not be able to deny the government its share of profits unless it also withheld profits from its other shareholders. And we would not call that “tax avoidance” but outright theft – the sort of thing that gets people sent to jail.

This government (We the People) share of corporations would replace taxation, because the government would collect dividends or the value of the share would increase along with the profits (formerly taxable) of the corporation. The government and corporate tax-accounting bureaucracies would be unnecessary. Our democracy would receive revenue so it can do things to make our economy and lives better.

Why should the government (We the People) have a share of corporations? People generally do not understand what a corporation really is, and this common misunderstanding works to be benefit of those who make money off of them.

Corporations are entirely creations of government. They don’t exist without government. A corporation is a package of laws designed to accomplish a public purpose.

Individuals do not generally have the kind of capital available to accomplish large-scale projects like building a series of factories to make cars or airplanes. It’s also risky to sink so much of one person’t holdings into something like that so those with sufficient resources might not do it.

So government (We the people) created corporations to enable pooling of capital and reduction of individual risk. We (through our government) grant these entities the right to enter into contracts, write checks, hire people, borrow money, file lawsuits, etc. as if they were a “person.”

A common misconception is that shareholders “own” corporations. They do not, but shareholders do elect the Board of Directors, which hires people to manage the corporation according to the Board’s instructions.

People tend to think of and talk about corporations as sentient entities. But corporations do not think or decide or act or anything else. The managers of the corporation do that. For example, “Wells Fargo” did not “decide” to commit fraud against their customers, the corporation’s executives — people — did that.

Another common misconception is that corporations are required by law to do whatever they can to make profits for the shareholders. In fact this is a relatively recent concept that flourished as people’s understanding of the purpose of corporations diminished. In fact government does much to limit what corporations can do while seeking profits. They cannot (aren’t supposed to) kill or injure people to increase profits, cannot poison the air and water, cannot commit fraud, etc.

So the idea that government should keep their hands off of corporations and not hold some percent of them for the benefit of We the People is really preposterous. This thinking misunderstands what a corporation is, how and why it exists and what its purpose is.

The goal of Baker’s idea is to create a system where corporations are paying their share to We the People, without all of the incentives to come up with schemes to avoid taxes. Baker’s idea accomplishes that goal. Baker suggests that government hold 25% of corporate shares, but the tax rate has already dropped from 52% to 46% under Reagan to 35% today, and the corporate share of the overall tax burden has fallen from 32% to only 10%. SO perhaps a higher share would be appropriate for restoring revenue and democracy.

(See Lynn Stout’s The Shareholder Value Myth for a deeper dive into what and why a corporation is.)

Tax Cuts Defund The Very Things That Boost The Economy

After 8 years of complaining about “Obama deficits,” Republicans are proposing huge, dramatic, unprecedented tax cuts, especially for corporations. President Trump wants the rate cut from 35% down to 15%, denying the government $2 trillion of revenue over the next decade. He is also proposing dramatic income tax cuts for billionaires like him.

Republicans call corporate tax cuts “pro-growth,” saying they will give the economy a boost. Trump’s Treasury Secretary says the plan will “pay for itself with economic growth.”

So now they’re for “stimulus”?

But here’s the real question: do tax cuts actually boost economic growth?

What Tax Cuts Actually Do

In 2012 the Congressional Research Service looked at the data from past tax cuts and the effect they had on the economy, and issued a report titled, Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945. The summary explained,

This report attempts to clarify whether or not there is an association between the tax rates of the highest income taxpayers and economic growth. Data is analyzed to illustrate the association between the tax rates of the highest income taxpayers and measures of economic growth.

And what did the study find?

There is not conclusive evidence, however, to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth. Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth. However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.

In fewer words: There is no evidence that tax cuts bring economic growth, but they do cause income to concentrate at the top.

But wait, it’s worse than that. Tax revenues build roads (and bridges and airports and rail systems and and water systems…), educate the population, conduct scientific research, run the courts, enforce regulations, standardize (and enforce) weights and measures, and about a million other things that make businesses prosper.

If you cut taxes, over time the business environment necessarily gets worse because those roads deteriorate, people are not as well educated, scientific research declines, courts clog up, regulation enforcement declines, along with about a million other things that businesses rely on. If you can’t get educated employees, can’t move goods on crowded and deteriorated roads and your competitors can get away with cheating, your business just isn’t going to do as well as it could.

Tax cuts defund all of those things that boost the economy and make our lives better. Over time the economy necessarily gets worse.

Are Taxes Theft?

Republicans say “taxes are theft.” They say “taxes take money out of the economy.” They say it “takes from those who work and earn and giving to those who don’t.” They say taxation “extracts wealth.” The idea behind this is that government is illegitimate and “uses force’ to “take people’s money” so “they” can have it instead. They argue there are “producers” and “moochers” and the moochers outnumber the producers and take from them.

These are all actually arguments against democracy. Substitute the words “We the People” for the word “government” in their arguments and you’ll see how this works. The “they” in their arguments isn’t some “other” that grabs the money, it is We the People. The idea of democracy is that We the People have a government and we decide how to allocate the resources of our economy to make our lives better. That means taxing and spending.

Democracy is taxing and spending. And by definition government sending is on things that make our lives better.

Are tax cuts theft? Or are they really about theft of democracy from We the People?

From Tax Cuts Are Theft,

The American Social Contract: We, the People built our democracy and the empowerment and protections it bestows. We built the infrastructure, schools and all of the public structures, laws, courts, monetary system, etc. that enable enterprise to prosper. That prosperity is the bounty of our democracy and by contract it is supposed to be shared and reinvested. That is the contract. Our system enables some people to become wealthy but all of us are supposed to benefit from this system. Why else would We, the People have set up this system, if not for the benefit of We, the People?

… The American Social Contract is supposed to work like this:

… But the “Reagan Revolution” broke the contract. Since Reagan the system is working like this:

Tax cuts eat the seed corn of our prosperity. We shouldn’t fall for yet another Republican con, this time from the con-man Trump.

United Incident Shows Why We Need To Re-Regulate Corporations

In a democracy, We the People are in charge. We are the boss of the corporations. At least that’s how it’s supposed to work.

Apparently, that isn’t so much the way it is anymore. The United States used to regulate corporations to protect people from concentrated power. Now concentrated power has taken over our government, which fights the people for the benefit of corporate profits.

Or, to paraphrase John Kenneth Galbraith and a Soviet joke: In democracy, We the People regulate corporation. In deregulated America is other way around.

The Face Of Deregulation

This is literally the face of deregulation of corporations:

This is what can happen to you now in the United States if you get in the way of something a corporation wants:

We’ve all seen the videos. A guy gets beaten and dragged from his paid seat on a United Airlines flight because, in essence, he was interfering with corporate profits just by being in the seat. The airplane was full, the corporation decided it could make more money by moving some employees to another town, and a passenger was in the way.

Airline Deregulation

Airlines used to be regulated in the U.S. as a public utility that served citizens. They competed with each other by offering better service.

Then in 1978, airlines were deregulated and passengers were considered consumers instead of citizens. The airlines argued that more competition would bring benefits. Instead, as time passed, airlines did what corporations tend to do.

They consolidated, reducing competition. They reduced and reduced and reduced service to reduce costs. They cut employee wages and benefits. They changed routes to “hubs” for their convenience, causing passengers to have to wait hours in crowded airports. And they write contracts that said you can’t use their (essential) service without signing away every right you have.

Since deregulation, airlines intentionally overbook many flights. They scrunch as many people into smaller and smaller seats just inches from the next, and sell you more legroom. Instead of serving food, they sell it. They charge you if you travel a suitcase. They charge you to bring a travel bag on the plane.

Soon, they will put a large spike in the seat and charge you to shorten it.

And you can’t do anything about it. You can’t even complain without risking being considered “disruptive” and dragged from the airplane and jailed. And be careful how you dress.

Not Just Airlines

It’s not just airlines. All kinds of corporate deregulation have been harming We the People. There used to be regulations requiring broadcast media to act in the public interest in exchange for use of publicly-owned broadcast frequencies. Now, obviously, there isn’t.

Pollution rules are being deregulated. Pesticides that harm children are being deregulated. The list is long.

“Arbitration clauses” are now used in all kinds of contracts and agreements to keep you from being able to take corporations to court. “Tort reform” laws also restrict access to courts when people are harmed by corporations.

You get the idea.

“Burdensome” Regulations

Corporations complain that regulations are “burdensome.” They complain that regulations cost them money.

Of course, regulations that stop corporations from polluting streams place a “burden” on them to properly dispose of waste. Of course it costs money to require them to not just dump waste into rivers, streams, and the air we breath.

Carmakers used to complain that rules requiring seat belts in cars were a “burden.” Tobacco companies used to complain that stopping them from selling cigarettes to kids “cost money.” So far, government regulation has protected us from these abuses-for-profit. But for how long?

Who Is Our Country FOR?

Americans have lost our understanding of the meaning of democracy and of the powers democracy brings us and duties it places on us. We have become consumers instead of citizens and we think that markets should make decisions for us instead of our votes.

In a democracy, We the People are supposed to be in charge. In a democracy, our government by definition exists to serve us, protect us, and do things for us that make our lives better.

A democracy regulates corporations to protect people from concentrated power. If we let concentrated power make decisions for us, we end up getting dragged off of airplanes because the corporation decided the seat we paid for would make them a bit more profit.

Corporations should be regulated to serve the public interest. Why else would We the People want to allow these things called corporations to exist at all?

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This post originally appeared at Campaign for America’s Future (CAF) at their OurFuture site. I am a Fellow with CAF, a project of People’s Action. Sign up here for the OurFuture daily summary and/or for People’s Action’s Progressive Breakfast.

Tax Cuts Steal Democracy

The Trump administration, as have all Republican administrations, is promoting tax cuts for the rich, saying they will “create growth.” Never mind the destructive history of tax cuts, the destructive history of “trickle-down economics” (and the destructive history of Republican administrations generally) — they’re doing it again.

Getting A Few Bamboozlements Out Of The Way

Any time taxes come up, decades of Republican bamboozlement gets in the way of rational discussion. Republicans say things like “taxes take money out of the economy” and “tax cuts create growth” to trick people into supporting tax cuts for the rich and corporations (which are really just more tax cuts for the rich).

So it is reasonable to look at what has actually happened when taxes on the rich have been cut. History shows that tax cuts have never produced “growth.” (See also, the Congressional Research Service’s non-partisan study, “Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945“: “Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth.” Also, take a look at what happened in Kansas and six other states when they tried to grow their economies through tax cuts.)

Tax Cuts Defund Our Democracy And Concentrate Power At The Top

So tax cuts do not “grow the economy.” They just don’t. But tax cuts and the resulting drop on revenue to our democracy are used to force cuts in the things our government does to make our lives better and help our economy prosper in the longer term.

When people have a say in how their government is run they say they want good schools and colleges, good infrastructure, health care, scientific research, good courts, and all the things that government can do to make our lives better. They also say they want a “flatter” wealth distribution, with people at the bottom having a way to make a living, and people at the top helping pay for our democracy by pitching in more of the gains that democracy brings.

When people don’t have a say in how their government is run, the economy delivers for a few at the top while leaving the rest behind. And this concentration of wealth also concentrates their power over our governmental decision-making.

Tax cuts don’t just force a drop in revenue to our democracy, they push the benefits of our economy to a few at the top. The Congressional Research Service study mentioned above, Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945, found that tax cuts do not bring economic growth. The study also found, “However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.”

Democracies demand high taxes at the top because the revenue is good for the economy in the long term. Taxes bring in revenue to pay for education, scientific research and improvements in infrastructure that cause the economy to grow. Investing in modern transit systems, smart grid, energy efficiency, fast internet and other improvements leads to a huge payoff. Infrastructure improvement and maintenance is the “seed corn” of economic growth. We have been eating that seed corn since Reagan’s tax cuts. Prosperity is the fruit of democracy.

Tax cuts do not “take money out of the economy”; they redistribute it to places where We the People decide it can be better used to help make all of our lives better and grow our economy. But the Reagan tax cuts were used to force cuts in things like education, scientific research and, unfortunately, maintaining and modernizing our infrastructure.

Our economy has been in trouble ever since. From the 2010 post, Reagan Revolution Home To Roost — In Charts:

Working people’s share of the benefits from increased productivity took a sudden turn down:

This resulted in intense concentration of wealth at the top:

And forced working people to spend down savings to get by:

Which forced working people to go into debt: (total household debt as percentage of GDP)

None of which has helped economic growth much: (12-quarter rolling average nominal GDP growth.)*

Tax cuts steal from democracy.

Tax Cuts Force Unsustainable Business Models

The dramatic decrease in top tax rates has also forced unsustainable “sell the farm” business models.

From the 2010 post 14 Ways A 90 Percent Top Tax Rate Fixes Our Economy And Our Country:

A return to Eisenhower-era 90% top tax rates helps fix our economy in several ways:

1) It makes it take longer to end up with a fortune. In fact it makes people build andearn a fortune, instead of shooting for quick windfalls. This forces long-term thinking and planning instead of short-term scheming and scamming. If grabbing everything in sight and running doesn’t pay off anymore, you have to change your strategy.

2) It gets rid of the quick-buck-scheme business model. Making people take a longer-term approach to building rather than grabbing a fortune will help reattach businesses to communities by reinforcing interdependence between businesses and their surrounding communities. When it takes owners and executives years to build up a fortune they need solid companies that are around for a long time. This requires the surrounding public infrastructure of roads, schools, police, fire, courts, etc., to be in good shape to provide long-term support for the enterprise. You also want your company to build a solid reputation for serving its customers rather than cheapening the product, pursuing quick-buck scams, cutting customer service, etc. The current Wall Street/private equity business model of looting companies, leaving behind an empty shell, unemployed workers and a surrounding community in devastation will no longer be a viable business strategy.

3) It will lower the executive crime rate. Today it is possible to run scams that let you pocket huge sums in a single year, and leave behind the mess you make for others to fix. A high top tax rate removes the incentive to lie, cheat and steal to grab every buck you can as fast as you can. This reduces the temptation to be dishonest. If you aren’t going to keep the whole dime, why risk doing the time? When excessive, massive paydays are possible, it opens the door to overwhelming greed and a resulting compromising of principles. Sort of the definition of the decades since Reagan, no?

Who Pays For Tax Cuts?

Conservative economics claims that tax cuts do not have to be “paid for.” (Modern Monetary Theory shows otherwise, but that’s for another post.)

Trump uses the old “tax cuts pay for themselves” bamboozlement to claim that much of the revenue lost from his tax cuts will be made up for by increased growth. They won’t, of course. Trump also throws in a number of things that will actually increase taxes on the non-rich, while hurting homeowners and nonprofit organizations.

One place the Trump tax cuts plan to “pay for” the huge windfall for the rich is by limiting or eliminating the mortgage interest tax deduction.

Another “pay for” is eliminating tax deductions for charitable giving. In “Will Trump’s Tax Plan Hurt Philanthropy?” Ben Paynter explains what this will do to nonprofits.

“In the long run, the Center for Effective Government estimates that the proposed policy could reduce cause organization funding by $9.1 billion annually. And United Way Worldwide has reported that nearly two-thirds of Americans might reduce giving by 25% or more.”

Marques Chavez of The Alliance for Charitable Reform names a few names, in a letter to the editor that appeared in The Hill

“The Tax Policy Center found that a cap on the charitable deduction, as proposed by President Trump, would cost as much as $26 billion in charitable giving in one year. That is more than the combined operating budgets of the American Red Cross, Goodwill Industries International, YMCA of the USA, Habitat for Humanity, Boys and Girls Clubs of America, Catholic Charities USA, the American Cancer Society, United Way Worldwide and Feeding America.”

What tax cuts actually do is steal our democracy out from under us.

The Republican Congress and President Trump are proposing more huge tax cuts for the rich and corporations. Call your member of Congress and your senators, and visit their offices, to let them know how you feel about this. Join #ResistTrumpTuesdays here.

You can find local actions here and a local #Indivisible group here.

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This post originally appeared at Campaign for America’s Future (CAF) at their OurFuture site. I am a Fellow with CAF, a project of People’s Action. Sign up here for the OurFuture daily summary and/or for People’s Action’s Progressive Breakfast.

Trump Declares TPP Still Dead. So Now What?

President Trump formally withdrew the US from the Trans-Pacific Partnership (TPP). Though TPP was killed by a long progressive fight that resulted in it not having the votes to pass Congress, of course, he took credit for killing it himself.

TPP was another “trade” deal written in secret using a process dominated by corporate interests. As David Dayen, writing in The Nation Tuesday, put it,

The public recognized that free-trade deals aren’t about free trade anymore—tariffs are currently so low it would be hard to get them meaningfully lower—but about guaranteeing corporate profits through eliminating regulations and enforcing patents. Another deal written in secret, with lobbyists whispering in negotiators’ ears, gave nobody confidence that this would change. Secret enforcement tribunals were a prime target for criticism, because they protect corporate and investor profits and enable financial speculation. No such platform exists for workers if their rights are violated.

This rigged trade process and its results brought us Trump, and here we are.

So now that that’s over, how should our country trade with the world?

Do We Even Need “Trade Deals”?

“Trade” used to be about countries that grow bananas and “developed” countries exchanging bananas for cars and toasters. The banana regions had a “comparative advantage” because the climate favored banana-growing, the developed countries’ advantage was a completed manufacturing ecosystem. Unfortunately “comparative advantage” today means companies moving their production to places that allow them to pollute and exploit workers to “lower their costs.” (The costs of pollution and exploitation are then instead borne by working people and the planet.)

It is a common misconception that we need to have a trade deal with a country before American companies can export to that country. This is partly due to misleading arguments used to sell corporate-favoring trade agreements, like saying, “Ninety-five percent of America’s potential customers live overseas, so closing ourselves off to trade is not a solution.”

Not having a trade agreement doesn’t “close ourselves off to trade.” American businesses trade with the rest of the world and the rest of the world trades with us regardless of trade deals. But without trade deals countries can set tariffs and barriers according to their own country’s needs and goals.

“Protectionism”

In places where people have a say, people say they want good wages and environmental protections (and public education and health care and infrastructure and parks and science and other things people vote for in democracies). These protections mean that working people and the environment receive a larger share of the economic pie. The economic pie is also larger as a result of that investment in public education and infrastructure and the rest, so the “investor” class does better, too. To pay for these investment those who do better are taxed more.

In non-democracies and other places where people don’t have a say people aren’t paid well, the environment is not protected and a few people at the top end up with a larger share of the smaller economic pie.

So a democracy might want a tariff to remove the price advantage of goods made at “less cost” in countries without those protections. With a balancing tariff those goods won’t undermine democray’s good wages and protections, and undermine the tax base along with them. These tariffs and barriers might be called a “democracy tax,” with the revenues used for investment to make the goods made in the democracy more competitive worldwide.

Business and “investor” interests want to pay lower wages and environmental protection costs, so they encourage countries to pass “free trade” deals that prevent governments from imposing tariffs and barriers in the future. They call the idea of democracy taxes and other decision-making by governments to protect national interests “protectionism.”

“Free trade” deals set aside each country’s political decision-making in favor of “more trade” — thereby placing business interests above national sovereignty. Governments are prevented from acting to “protect” a country’s interests and businesses are free to seek the lowest costs, regardless of what happens to countries and the people in them and the environment.

“Opening New Markets” – To Monopolization

When corporate interests advocate for free trade deals they also claim the deals will “establish new markets.” Again, this falsely implies they can’t already export without establishing a trade deal. This language also makes it seem as though those countries don’t already have companies and industries in those markets. What they really want is a deal that blocks governments from using tariffs and barriers “protecting” their developing or strategic industries from being overtaken and knocked out by established or subsidized competitors from other countries. This “opens markets” to outside competition from giant corporations.

With open trade the largest multinational corporations are able to sweep into other countries — “new markets” — and buy up or knock out existing, smaller businesses. The larger companies use economies of scale, established supply chains, superior access to credit, and other advantages of bigness to become even bigger. The resulting “efficiencies” mean that people are laid off wages and benefits are cut and systems are set up to push profits to the “investors” in the corporation.

People Caught On

So American voters finally caught on to the gimmicks used to sell “free trade.” Or, better put, the damage from from free trade finally caught up to most of us. People rose up and demanded a change, and change is upon us. With TPP out of the way, and “free trade” on hold for the time being it is time to re-evaluate what We the People want from our trade deals and economy.

Stan Sorcher writes, in Restoring Trust After Our “Free Trade” Charade Ends,

Our failed “neoliberal” approach has been to manage globalization through trade deals, written by and for the interests of global companies. The neoliberal vision is a fully integrated global economy, where national identities are blurred, shareholder interests have top priority, public interests are devalued, and gains go almost entirely to investors.

… In this neoliberal vision, markets will solve all our problems, government is bad, and power and influence should favor those who already have plenty of both.

It’s time for a change. But what will the new trade regime look like?

Proposals For A New Trade Regime

Trade doesn’t have to mean a race to the economic bottom resulting in massive worldwide inequality. The benefits of a modern, globalized world are clear. Jared Bernstein, wrote last year that trade deals,

… provide necessary rules of the road by which countries deal with trade logistics, barriers, cross-border investments and conflicts, and, in this sense, they can smooth the path of globalization in useful ways. But they can also be captured by partisan or corporate interests and thereby used to channel the benefits of trade to a favored group. This has certainly been the case in the United States, and it is why many of us who are committed globalists opposed the TPP.

A new approach is needed. The question is how do we manage globalization and trade for the benefit of all of us instead of using it to set all of us against each other?

Plenty of groups and interests are already weighing in. Lori Wallach and Jared Bernstein, writing in The American Prospect last year, in The New Rules of the Road: A Progressive Approach to Globalization, (click through for specifics),

The new rules must prioritize the economic needs of low- and middle-income families while preserving the democratic, accountable policymaking processes that are essential to creating and maintaining the environmental, consumer, labor, and human-rights policies on which we all rely.
[. . .] A more transparent process with opportunities for meaningful engagement, accountability, and oversight by the public and Congress—rather than the current regime that privileges the commercial interests that have long captured these negotiations—is needed.

The AFL-CIO recently posted, 6 Ways We Could Improve NAFTA for Working People, which can be applied more generally to new trade negotiations, (click through for details),

1. Eliminate the private justice system for foreign investors.

2. Strengthen the labor and environment obligations (the North American Agreement on Labor Cooperation and the North American Agreement on Environmental Cooperation), include them in the agreement, and ensure they are enforced.

3. Address currency manipulation by creating binding rules subject to enforcement and possible sanctions.

4. Upgrade NAFTA’s rules of origin, particularly on autos and auto parts, to reinforce auto sector jobs in North America.

5. Delete the procurement chapter that undermines “Buy American” laws (Chapter 10).

6. Upgrade the trade enforcement chapter (Chapter 19).

The Sierra Club has issued a discussion paper, A New Climate-Friendly Approach To Trade, with ideas that

“start from a simple premise that marks a fundamental departure from the status quo: Trade and investment should be treated as tools for advancing public interest objectives—not ends in and of themselves.1 Agreements between countries should encourage trade and investment that support a more stable climate, healthy communities, and good jobs, while discouraging trade and investment that undermine these goals. This means, for example, incentivizing investments in renewable energy but not in fossil fuels,2 lowering barriers to the spread of green technology, and using taxes on highemissions trade to support increased climate protection and climate-friendly job growth.”

The Coalition for a Prosperous America offers 13 21st Century Trade Agreement Principles. Among these: Balanced Trade, reciprocity, stop currency manipulation, allow “Buy America” procurement, enforceable provisions, and more.

Many ideas being discussed seem to involve a “small-ball” approach, reacting to the existing trade regime instead of reimagining the possibilities. Current discussions revolve around things like getting rid of rules favoring investors over governments, or including enforceable labor and environmental standards. And, of course that is all needed. But so is a reimagining.

Obviously the first goal of a new trade policy should be to lift prosperity and improve people’s lives on all sides of trade borders — not just for a few at the expense of the many, but generally. This means the interest of all economic and trade “stakeholders” — labor, consumers, human rights, LGBTQ+, environmental, health, etc. and their governments, along with investors and businesses — need to be involved in the process.

It can be done. For example, imagine a “trade deal” that prohibits companies from threatening workers with having their jobs moved to another country. Hmm… By imagining the unimaginable all kinds of new possibilities begin to open up.

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This post originally appeared at Campaign for America’s Future (CAF) at their OurFuture site. I am a Fellow with CAF, a project of People’s Action. Sign up here for the OurFuture daily summary and/or for People’s Action’s Progressive Breakfast.

Trump’s Absurd Plan To Dismantle Government’s Protections

Donald Trump released a video announcing his agenda for his “first day in office.” One of the things he said is, “I will formulate a rule which says that for every one new regulation, two old regulations must be eliminated.” Can we count the number of ways this is absurd and dangerous?

Under Trump’s 2-for-1 idea, if we want to have a regulation that a company can’t store explosives next to an elementary school, we have to eliminate a regulation that protects us from food poisoning AND a regulation that stops companies from taking money out of your bank account for no reason? (Or how about creating fake accounts and charging them fees?)

Or how about we eliminate the regulations requiring seat belts in cars? Or requiring cars to have headlights? There’s two more! And think of all the money this would save the car companies! (Ignore the pain and suffering and loss this would cause regular Americans — that’s not money.)

Here’s one that can go: eliminate the regulations against defrauding students using high-pressure sales techniques to get them to enroll at scam universities. Or against “financial elder abuse“.

Government Is We The People

In the United States government was once supposed to be about We the People organizing to accomplish things that make our lives better. We vote, our representatives impose taxes and spend and make laws and regulations toward that end.

The ongoing corporate/conservative attack on the legitimacy of government and democracy have eroded public understanding of these concepts. Education. Firefighting. Scientific research. Health care. Parks. Transportation. All are core things a government of, by and FOR the people does to make our lives better — and all are under attack, “privatized” or “eliminated” by representatives who have been “captured” by corporate/conservative money.

Government of, by and for the people by definition stops some people from doing things that hurt others. In particular for this discussion, it stops people who have businesses from defrauding others, harming others, polluting our air and water, selling dangerous products, and other destructive practices. But this means that these people make less money, so they complain, and sometimes they use their money to influence those who would regulate to stop them.

“Burdensome government regulations” all cost companies money: food inspection, clean water, fire codes, zoning rules and drug safety rules. They all “get in the way” of a company scamming, hurting, polluting or whatever makes them more money.

Regulations too often come about as a reaction to something terrible happening. Fire codes came from times when entire towns burned down. Drug-safety rules came from “snake oil” scammers selling poison and leaving town before the damage is done. Seat belt regulations came from terrible traffic injuries and deaths.

Regulations are about “how can We the People do this better?”

The Underlying Assumptions Behind Trump’s Absurd Plan

Underlying Trump’s plan to “eliminate” government regulations is the premise that “government regulation” is itself a bad thing. And underlying that is the premise that government of by and for the people itself is illegitimate. It gets in the way of business. We the People making decisions interferes with efficient decision-making done for the narrow purpose of making money.

Corporate-financed conservatives will always tell you that government and its regulations are always bad. Government just “interferes” in things it knows nothing about. They will say that government regulations hold back businesses from expanding and hiring and generally getting things done that make money. But these are self-interested complaints from people who make their money scamming or hurting or polluting. People like Donald Trump.

We should see Trump’s proposal for what it is. This is not an approach to governing, it is about dismantling what government is for so that an already-wealthy few are free to fleece, scam, harm and and pollute in the name of greed.

The Reality Of This Election Is Trump Or Clinton

The reality of this election is that this year two choices for president, and only two choices. Either Donald Trump or Hillary Clinton will become president.

And this election is entirely about Donald Trump. You are either for him or against him, period. There is just no way around it.

Trump will have the keys to the FBI, NSA and Department of Justice. Imagine Chris Christie as Atty General and Rudolph Giuliani as Director of National Intelligence. Maybe Newt Gingrich running the FBI. Imagine Trump with the NSA surveillance apparatus under his control. All rubber-stamped by a Republican Congress. He’s already talked about firing all the generals, imagine what happens to the rest of government. our government will become entirely a support-Trump operation — not unlike how Putin runs Russia. Do you think you’ll be safe?

Trump promises a “deportation force” that will round up Muslim and Latino families — and do what with them? Black, Jewish and “mixed-race” families obviously are in line to be on that “Skittles” list. What happens to the rights of Gays and political “politically correct” opponents? His crowds chant “lock them up” about the news media. No, if you are someone who is reading this you won’t be safe if Trump wins.

If you think this is a just exaggerated talk or a joke, everyone also thought it was a joke that Trump could win the Republican nomination, or be anywhere close to becoming President. Yet he did and he is.

This is serious shit. Bernie Sanders is traveling around the country right now to spread this message:

“The stakes are much too high. This is not a personality contest. You are not voting for the senior class president at the local high school. You are voting for the most important public official in the world. The differences between Secretary Clinton and Donald Trump are day and night.”

If you do not want Donald Trump to become president you have to vote for Hillary Clinton. If you do not vote FOR Clinton you are voting to allow Trump to become president, period. You might not be able to stand Clinton, but you have to decide if you want Trump to be president, with all the consequences that brings. Because that is what it could mean if you do not show up and vote for Clinton.

My very first blog post ever was this July, 2002 post: Ralph Nader is a Scab,

In the union movement we learned the hard way that the only way to fight the moneyed interests is to stick together. It’s called SOLIDARITY. It’s what “union” MEANS.

When unions are in a fight the members stick together, and those crossing the lines are called “scabs”.

In the 2000 election it was the usual fragile Democratic coalition fighting the usual moneyed interests. Ralph Nader broke the solidarity, divided the coalition, and lost us the election. Ralph Nader is a scab.

Even if you are in a “safe” state you still have to vote for either Trump or Clinton. Not voting for Clinton to “send a message” keeps her “numbers” down nationally which, if things are close elsewhere could leave Trump with more votes nationally but lose the electoral college — like what happened to Gore. If that happens it encourages Trump’s neo-Nazi followers to take up arms.

In 2000 people voted for Ralph Nader to “send a message.” Solidarity was broken and Bush became president. No message was received and nothing was done about climate for 8 years, hundreds of thousands of Iraqis were killed in an illegal war that brought lasting chaos to the Middle East. And our economy was ruined. A Trump win promises far, far worse consequences.

“Underbanked” Report Shows Need For Postal Banking

Millions of Americans can’t get bank accounts, so they can’t even cash a check. Many millions more might have an account but can’t get even a small loan. The numbers (below) are just outrageous.

These millions are forced to turn to predators like the payday loan and check cashing industry. Even those who can get full-service accounts are scammed by the likes of Wells Fargo.

Meanwhile We the people are prevented by our captured-by-Wall-Street Congress from setting up the obvious solution that would solve so many problems: Postal Banking.

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Oregon Locals Take On Corporate Power With ‘Tax Corporations’ Measure 97

Much of Congress is captured by corporate money. So literally nothing gets through Congress if it interferes with the corporate/1% -boosting agenda. Many in the federal regulatory agencies are captured by promises of corporate payoffs after leaving government, so these agencies do almost nothing to crack down on corporate abuses of We the People.

At the state level, the corrupting power of corporate and billionaire money can have an even greater effect. For example, after the Republican-dominated Supreme Court opened up the floodgates of corporate money with the Citizens United decision, that money helped Republicans take over statehouse after statehouse.

In these states, taxes on corporations and the wealthy were cut, and schools, roads, healthcare and the rest of the things government does to make the lives of We the People better were gutted. In other states, corporate money blocks needed taxation and essential government programs.

With corporate and billionaire money determining the outcome of policy decisions at the national and state levels, people in the cities and states are using ballot initiatives to try locally to take back power. Around the country we’ve seen successful efforts to pass measures such as minimum wage increases, fracking bans and anti-tobacco initiatives.

Oregon’s Measure 97

Oregon’s Measure 97 ballot initiative is one example of We the People trying to take back control of government from the 1% and their powerful corporations.

Oregonians will vote soon on taxing larger corporations to protect programs that help Oregon’s people instead of just the wealthy and their corporations. Specifically, Measure 97 would increase the minimum tax for large and out-of-state corporations with more than $25 million in annual Oregon sales.

This is not a tax increase, this is requiring corporations that might otherwise dodge taxes to pay a minimum tax to generate money to cover the state’s budget needs.

The NY Times summed up the effect Measure 97 would have in September’s report, Measure 97, Seeking to Raise Corporate Taxes, Splits Oregon Voters,

If approved by the voters here in November, Measure 97 would create the biggest tide of new tax revenue in any state in the nation this year as a percentage of the budget, economists said — and one of the biggest anywhere in recent history. Oregon’s general fund would grow by almost a third, or about $3 billion a year, through a 2.5 percent tax on corporate gross receipts. The initiative language says the money would augment state spending on education, health care and senior services, but does not bind the Legislature to a specific plan.

Summary:

Make large corporations — many of which take the profits out of the state — pay at least minimal taxes.

With that money Oregon gets to maintain or increase programs like:

● special education,
● hire 7,500 teachers,
● provide PE & Arts classes and make sure there is a nurse at every school,
● add 2 weeks to the school year,
● fund a statewide, modern public health system
● maintain Oregon’s Cover All Kids, a Basic Health Program,
● expand health insurance subsidies for working families
● provide mental health and substance abuse care,
● providing in-home assistance to 15,180 more seniors, and
● fully fund Adult Abuse Prevention to investigate every case of possible abuse or neglect.

Supporters

That’s good trade-off, which brings out lots of supporters. The Vote Yes On 97 website says that, “6,000 volunteers, over 1,250 endorsements from community organizations, economists, parents and teachers, local leaders, and over 435 Oregon businesses.” Click here to see the list of businesses, educators, community groups, labor unions, elected officials, and community leaders

Supporters include People’s Action affiliates Unite Oregon and The Main Street Alliance of Oregon. OurRevolution also supports Measure 97.

Darlene Huntress, associate director of Unite Oregon, says of Measure 97,

“This is about corporations investing in communities. With the budget shortfall that we have this is about taxing corporations, many of which aren’t paying taxes now. what this could do for education, health care and senior services is a real gamechanger.

On top of that Unite Oregon works with communities of color, immigrants and refugees. Many of these corporations are the same corporations that have invested in private prisons and detention centers. We’d prefer this money was invested in our communities instead of invested in separating families.”

Opponents

The Times’ report also lays out who is for and against Measure 97, (hint: the usual suspects)

Labor unions, led by teachers, are leading the fight for passage, arguing that decades of erosion in education funding are the cause of the state’s dismal high school graduation rate, among the lowest in the nation. Opponents have raised about $8 million — four times as much as supporters — through contributions from large companies like Amazon, General Motors and the grocery chain Kroger/Fred Meyer.

Corporations are doing what they always do: pouring millions into the campaign, and extorting citizens by threatening to raise prices, cut jobs, or just leave the state.

CAN Corporation Raise Prices To Cover Taxes?

A short examination of just one of these arguments — can corporations really raise prices to “pass on taxes to customers?” — shows that the corporate arguments against taxation have little credibility.

● Companies try to price ‘optimally,” meaning they already charge as much as they can. If they could raise prices, they already would have.

● Taxes are determined long after a sale takes place and are not a cost to be added into the pricing of a product. There is no way to know what the taxes might be later.

● Companies have competitors. If “Company A” raised prices, competing “Company B” would get more business, which would mean that “Company A” loses sales, which would mean they have lower profits and therefore lower taxes, which would mean they would have to lower prices…

● Suppose a company could raise its prices regardless of competition. That would mean the profits would be even greater, which means the taxes on profits would be greater, which would mean they have to raise prices even more. But that would mean profits would be even greater, which means the taxes on profits would be greater, which would mean they have to raise prices even more. But that would mean profits would be even greater …

People in corporations know they can’t raise prices to “pass on taxes to customers,” yet they are making the argument anyway. Other corporate arguments against raising taxes have similarly low credibility.

If you live in Oregon, take a look at Measure 97. If you don’t live in Oregon, learn from Oregon’s amazing activists and organizers and organizations like the coalition behind Measure 97. You can how power in your state to take on corporate power and restore government of, by and FOR the people.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progressive Breakfast.

Small Businesses Speak Out Against Donald Trump’s Tax Plan

“Tax cuts skewed towards the wealthy elite starve our communities of much-needed resources while further tilting the scales towards large corporations and the rich.”
– Stephen Rouzer at Main Street Alliance

If you cut taxes for the rich and giant corporations, what happens to the rest of us? Tax cuts mean budget cuts, so what suffers is education, infrastructure and all kinds of things government does to make our lives better and our local businesses stronger.

Republicans argue that pushing wealth and income to the top few has a “trickle down” effect. They say wealthy people (like Paris Hilton) are “makers” who “create jobs” and therefore deserve to have heaps of money pushed their way for their benefit. They say that government spending on things that make the lives of We the People better really just makes us into “takers.”

But in reality, policies that push more and more of our country’s resources into the largest hands put our smaller hands at even more of a disadvantage. The giant corporations have huge advantages over small, local businesses just due to their size; huge tax breaks on top of their size-given advantages just make it that much harder for smaller businesses to compete. So the “WalMart business model” of undercutting and bankrupting a community’s small businesses and draining entire regions of wealth gains even more power. After decades of these “trickle down” policies, this is also known as “look around you.”

Trump’s Tax Plan Means Fewer Customers With Money To Spend At Local Businesses

The Main Street Alliance is a “is a national network of small business coalitions” that “works to provide small businesses a voice on the most pressing public policy issues across the nation.” (Donate here.)

A Main Street Alliance blog post by Stephen Rouzer, “Donald Trump’s Revised Tax Plan Won’t Work for Main Street,” begins,

The latest version of Donald Trump’s ever-changing tax plan is facing scrutiny from the Center on Budget and Policy Priorities and Main Street Alliance leaders. The plan, one that features across the board tax cuts, disproportionately benefits the highest-income earners, those grossing more than $1 million annually.

This description of Trump’s plans as a huge benefit to the wealthiest is based on a Center on Budget and Policy Priorities (CBPP) post explaining a Tax Policy Center (TPC) analysis of Donald Trump’s tax proposals. The CBPP post, “Revised Trump Tax Plan Heavily Tilted Toward Wealthiest, Tax Policy Center Analysis Shows” explains how the analysis shows that Trump’s tax cut raise the after-tax income of the already-wealthy by another 14% or more, while hardly benefiting the rest of us – or even cutting the take-home incomes of the poorest.

This would seriously affect small, local businesses. Rouzer explains how passing so much to the top few while starving the rest of us means local businesses have fewer customers with money to spend:

A 2015 report released by the Main Street Alliance, “Voices of Main Street,” surveyed over 1000 small business owners and found that 52 percent of respondents cited “more customers” as the most important key to increasing small business success. Doubling the number of respondents that said “lower taxes” and more than quadrupling the number that responded “fewer regulations.”

Tax cuts skewed towards the wealthy elite starve our communities of much-needed resources while further tilting the scales towards large corporations and the rich.

Rouzer concludes with some great comments from business owners:

“To level the playing field for Main Street businesses our tax code must no longer skew in favor of large corporations and their shareholders,” said Deborah Field, the owner of Paperjam Press in Portland, Oregon, and a former corporate tax accountant. “Without holding multinational corporations accountable to pay what they owe and first providing relief to low and middle-income earners we shouldn’t begin to consider tax cuts for the rich.”

[…]

“The vast majority of small business owners don’t support a tax system that augments their piece of the pie by cheating their fellow citizens out of theirs. When we contribute our fair share of taxes, those dollars get reinvested in our local communities,” said David Borris, the owner of Hel’s Kitchen Catering in Chicago and Main Street Alliance Executive Committee member. “Local communities that support tens of millions of small businesses nationally.”

Amanda Ballantyne, national director of the Main Street Alliance, says that “Mr. Trump’s tax breaks would deprive the government of badly needed funds for investments in infrastructure, transportation, education, and social services. The resulting budget cuts hinder the types of investments that drive local economies and put small businesses in a better position to succeed.”

The kind of tax policy that small businesses need is one that supports their customer base and their communities. “In that regard, Trump’s plan falls flat,” says Ballantyne.

Donald Trump wants to dramatically cut taxes for the already-wealthy and their giant corporations. This would starve local communities of resources like teachers and infrastructure, while stacking the deck further against smaller, local businesses.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progressive Breakfast.

Must Must Must Listen Podcast: Robert Reich On This Election

I listened to this on a walk, and it is a must, must, must listen podcast.

Robert Reich, speaking Tuesday at the Commonwealth Club in San Francisco: “The Oddest Presidential Election in Living Memory

From the website:

Tue, Sep 27 2016 – 6:30pm
Robert Reich, Chancellor’s Professor of Public Policy, University of California, Berkeley; Former Secretary of Labor; Author, Saving Capitalism

Holly Kernan, Executive Editor for News, KQED—Moderator

In the midst of an unpredictable presidential election, get insight from a veteran political figure who knows Washington inside and out. Time magazine named Reich one of the 10 most effective cabinet secretaries of the 20th century. He is a founding editor of the American Prospect magazine and chairman of Common Cause. Come hear his provocative thoughts on the presidential election and the future of America.