Killing The American Dream One Corporate Tax Cut At A Time

Jun 13 2011 Published by under Uncategorized

The 112TH Congress has been dominated by two issues for five months and despite Republican promises to create jobs and help grow the economy, the GOP controlled House has concentrated on attacking women’s rights at the behest of the Religious Right, and making severe spending cuts to programs that benefit every American, but primarily the elderly and the poor. The Republican spending cuts and the Heritage Foundation’s budget that Paul Ryan proposed will not help the economy but are necessary to give Americans’ taxpayer funded Medicare benefits to private insurance companies, fund oil subsidies, and provide tax cuts for the wealthy and corporations. The Republicans have not proposed any legislation to help Americans, create jobs, or increase revenue for deficit reduction because their philosophy is that revenue belongs to corporations and the wealthy.

In recent months, the U.S. Chamber of Commerce and Republicans have proffered the notion that American corporations are burdened with an unfair corporate tax rate that makes it impossible for them to compete in a global economy, but reports of record corporate profits belie their assertions. Republicans have begun calling for a drastic reduction in the corporate tax rate to help business and create jobs even though businesses continue reaping obscene profits and moving jobs overseas.

Apparently, Republicans will not be satisfied until corporations pay no taxes and finally move every American job overseas where labor is nearly free and regulations are non-existent. Conservative industrialists have directed Republicans to pass legislation that guarantees free American labor, no environmental or safety regulations, and tax exempt status for corporations, and they are achieving that goal in small increments. There was talk among Republicans earlier in the year suggesting that the federal minimum wage is unconstitutional, and state’s efforts at eliminating collective bargaining will create an atmosphere where industry can pay employees survival wages and nothing more. Corporations are spending hundreds of millions of dollars to eliminate environmental regulations and the Republican’s budget drastically reduced funding for the EPA and other regulatory agencies. With such an enthusiastically ambitious schedule to make corporations more profitable and provide them with what little is left of American workers’ tax dollars and resources, it is surprising that conservatives have come up with another means of helping corporations rape Americans of their remaining assets.

There is a move to grant a tax holiday for multi-national corporations that hold their earnings in foreign countries to avoid paying tax on global profits. Win In America (WIA), the organization promoting the tax holiday acts as if their profits are being held hostage to an “unfair, broken tax system that penalizes U.S. businesses” because they want to bring their profits “home to America.” According to WIA, American businesses want the freedom to bring $1.43 trillion in profits without paying their fair share in taxes. The mission statement of WIA says they are left with a choice; “provide businesses with incentives to invest their global earnings here at home, or preserve the status quo and keep the money overseas.” However, as with all things, there are more than two choices; but corporations and their advocates in the Republican Party will never reveal the third choice is to bring the money home to America and pay the tax rate in effect when they earned the money like the average American taxpayer.

Win In America makes numerous claims that corporations are being discriminated against by requiring them to pay the taxes on their earnings, and go so far as to use the “trickle-down” argument that if the $1.43 trillion is brought home tax free, some money will eventually make it to main street America. The group advocates for corporate tax reform (zero corporate tax), but claims the process is too slow and cumbersome so they need “immediate reduction of taxation on income earned overseas” because it is “essential to keep them competitive.” It would seem to an average American that sitting on $1.43 trillion in earnings remotely resembles success and competitiveness.

Corporations at home and abroad are posting record profits and yet they have the audacity to claim they are not competitive when they are paying slave labor wages in China, India, and Korea with no regulations whatsoever. Republicans in Congress are pushing to grant corporations a tax holiday and there are some Democrats who are showing signs of succumbing to corporate pressure to join Republicans and give more American tax dollars to the wealthy corporations. There is more to the story that should infuriate Americans who do not have the luxury of being able to hold money overseas.

The corporations do not dispute that they owe taxes on their overseas earnings, but the allegedly “broken, unfair” tax code allows the American corporations to use “foreign tax havens as the ultimate repository for the firms’ overseas profits.” House Speaker John Boehner has proposed an idea that profits of American corporations would not be taxed in the U.S. and will encourage American companies to outsource all their operations further killing jobs and withholding revenue from the economy. Boehner is not alone in his attempt at eliminating revenue.

Michele Bachmann and other Republicans propose eliminating capital gains tax, estate tax, and the alternative minimum tax that benefits only the top 1% of wealthiest Americans. Eliminating the estate tax will benefit less than one quarter of one percent of the richest people in America, and ending capital gains tax benefits the richest 1%. To make up for the lost revenue, Bachmann will raise taxes on the working poor in America whom she claims pay no taxes whatsoever, and it is another display of her stupidity because all Americans pay sales tax, fuel tax, and payroll taxes. Bachmann, like all Republicans understands that some tax revenue is necessary to pay for oil subsidies, tax cuts for the rich, and a bloated defense budget to protect corporate interests overseas.

Corporations are posting record profits and many are paying no taxes on their earnings at home or abroad, and yet it is not enough for Republicans. Corporations that relocate to China, Korea, and India receive incentives and tax breaks for expanding their operations even though the expansion is on foreign soil. Many tech companies like Google developed intellectual property with early research funding from American taxpayers through the National Science Foundation, and then moved their technology off-shore to avoid paying taxes on profits. Republicans are using taxpayer dollars to enrich corporations who pay no taxes on their profits, and they are shipping American jobs overseas.

It doesn’t seem there is much more Republicans can do to help corporations and the wealthy at the expense of American taxpayers, but they will certainly find a way. It is getting to the point that the American people exist to fund the military and tax cuts for corporations and the wealthy who own them. However, regardless how much Republicans raise taxes on the working class and the poor, it will not be sufficient to maintain the level of defense spending or oil subsidies Republicans demand. Corporations follow Republicans’ example and are holding tax revenue hostage by refusing to bring their profits home unless they are given exemptions on their earnings with a tax holiday. When the “holiday” ends, they will once again keep their profits offshore until they convince a new batch of Republicans to offer them another holiday and the cycle will continue ad infinitum. The last corporate tax holiday was in 2004 and it did nothing to help the economy or create jobs. There is a limit though to how much longer the population can exist in survival mode and although Republicans are making the population irrelevant, they will need some form of revenue to fund their corporate entitlements and defense budget.

There is evidence that Republicans’ goal is transforming the government into a private enterprise but they will still need customers to buy access to roads, schools, police and fire protection regardless if Republicans privatize the government or not. Republicans are providing the means for corporations to suck the life out of America, and in the near future, the life will be gone. Republicans are making Americans irrelevant except to enrich corporate wealth for the richest 1% of Americans and their goal of raising taxes on the working class will come up empty when there is no middle class. However, there will still be wealthy corporations who will not pay taxes and at least then, there will be no American government for Republicans to control. It sounds bleak, but at this point, anything to deprive Republicans control of the government looks very appealing. It is too sad that it is going to take eradicating 98% of the American people to deny Republicans another day of destructive policies, but at least they will be destroyed as well.

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