CORPORATOCRACY

By: BATR

Record US corporate profits are the beneficiary of easy money, near zero interest rates and monopolist aided government tax policies. The upward surge in earnings since the depths of the financial collapse proves one incontrovertible fact; namely, tax regulations, implemented to aid favorite companies, is the operational model of the corporatist economy. Americans for tax fairness for 2013 report on 10 Companies and Their Tax Loopholes. Included in this examination on Bank of America, Citigroup, ExxonMobil, FedEx, General Electric, Honeywell, Merck, Microsoft, Pfizer and Verizon, indicated "corporations have stepped into the fray with some of the most aggressive lobbying we’ve seen in years – calling for cuts to corporate tax rates, a widening of offshore tax loopholes." "In making their case, corporate executives decry the U.S.’s 35% corporate tax rate claiming it is the highest in the world and makes their businesses uncompetitive globally. The evidence suggests otherwise. Corporate profits are at a 60-year high, while corporate taxes are near a 60-year low. U.S. stock markets are at record levels, and American CEOs are paid far more than executives who run firms of similar size in other nations. Many U.S. corporations pay a higher tax rate to foreign governments than they do here at home." This economic fact, regularly ignored in the business press, clearly represented in the New York Times article, Abolish the Corporate Income Tax by Laurence J. Kotlikoff, speaks for itself. "Eliminating the United States’ corporate income tax produces rapid and dramatic increases in American investment, output and real wages, making the tax cut self-financing to a significant extent. Somewhat smaller gains arise from revenue-neutral corporate tax base broadening, specifically cutting the corporate tax rate to 9 percent and eliminating all corporate tax loopholes." Sentiment such as this snubs the fundamental harm done, to the domestic economy and the middle class, from the offshore transplant of good paying American jobs. At the heart of this deception, two key details, demonstrated by the Center for Effective Government, reflects actual employment outcomes. One of the most enduring myths in Washington D.C. is that if we cut taxes on corporate profits, job creation will follow. U.S. corporations have been reporting record profits, even as they pay the lowest levels of federal income taxes in half a century. Large corporations pay, onaverage, just 12.6 percent of their profits in federal income taxes, yet we continue to have nearly 11 million Americans unemployed half of them for more than sixmonths. When corporations don’t pay their fair share of taxes, others must pick up their share of the cost of government. In the 1950s, corporate income taxes paid nearly a third of the federal government’s bills; in 2012, corporate income taxes accounted for less than a tenth of federal government receipts. As corporate taxes as a share of government tax receipts has shrunk, individual income and payroll taxes have risen steadily. So has the budget deficit. Applying this historical comparison, the easiest implication to draw is that corporations have excelled at evading paying taxes, by utilizing legions of tax attorneys, CPA accountants, political lobbyists and campaign donation operatives. However, the federal government has continued to function with outrageous tax deficits as a matter of course within modern memory. Consequently, tax policy does not operate as a means to secure revenue to balance out government expenditures. The Negotium essay, U.S. Corporate Tax Rate Consequences, documents the adverse consequence of the "Free Trade" paradigm and the implication of corporations holding profits in oversea subsidies as part of their tax reduction strategies. Again, this segment is part of the equation, but does not provide the entire solution. The most basic core obstruction is that the courts grant corporations personhood under the law. "Corporations are not people and should not enjoy the protections of constitutional personhood. However, the corporate tax rates needs to reflect the commitment to rebuild America. In the end, the consumer pays the tax." This erroneous legal cover facilitates the great race among corporate titans that avoids public responsibilities as they acquire their lesser competitors and consolidate into "Too Big to Fail" operations. The most aggressive managements create the tax loopholes, which tailor regulations, specifically designed and legally framed to apply to their own businesses, while often marginalizing rivals within their own industry or service enterprises. So what do you get from such interlocking directorships between mega business endeavors and the merger of state regulatory compliance agencies? The perfect business climate to stamp out any contender that dares threaten market share or revenue margins, that comes out of this formula effectively guarantees profits and the shifting of tax burdens onto the public or continued deficit financing of the national debt. As long as the tax code incorporates incentives and costs that seek changes or unnatural advantages in the marketplace, the invisible hand of Adam Smith is shackled to the governmental bribery culture of the political class. Even a proponent of a Living Democracy Movement, David Korten makes this point in, When Corporations Rule the World, "Proponents of corporate libertarianism regularly pay homage to Adam Smith as their intellectual patron saint... Smith had a strong dislike for both governments and corporations." Loopholes are not oversights in legislation or regulatory rules. Most are intended paybacks to the governance plutocracy. The net result of such an alliance, summed up in the Totalitarian Collectivism series, Part 8 – CORPORATIONS and LAW, denotes that more than setting a fair tax rate is at stake. "The craze to legislate, regulate and codify every facet of human conduct, while exempting corporations from public sanctions for the most egregious conduct, is only possible because the law officiates as a silent partner in the boardroom of a criminal syndicate. Admiralty Law functions as the corporate arbitrator for rigged exchanges, destructive trade treaties and capitalist dictators. Citizens are sacrificial lambs on the altar of "TC" conformity and compliance. As practiced in America, the corporation reigns supreme and the law protects State Capitalism at the expense of ordinary people."

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