Monday, August 12, 2013

Lower Tax Rates for Corporations Than People

For those on the right reading this, please don't latch onto the fact that it is Democrat Barack Obama who is presently proposing to reduce the maximum income tax rate on corporations to 28% while leaving the maximum income tax rate for individuals at nearly 40%.   It was not originally his idea.   The same thing has been proposed by people from both sides of the aisle, which just goes to show you how, when you follow the money, the aisle really doesn't mean much.

Why would a money-hungry big tax and spender like Obama want to cut the tax rates for corporations below that of individual persons (and many small businesses)?    Because he has decided that 28% of something is better than 40% of nothing.  You see the big guys have options to escape taxation, so whatever their rhetoric, looters loot whoever they can loot.  It is the upper middle class and barely rich, those with enough wealth to be an attractive target to prey upon but not enough mobility, options, and resources to escape predation, which will be victimized the worst in our current system.  Of course that practice throws up an effective barrier to entry for those of us below the upper middle class who would hope someday to enter it.

As it presently stands, U.S. corporations with assets and earnings overseas are not taxed in the United States for money they make elsewhere unless and until they bring that money back home.    As a consequence, they have not been bringing the money home.  They have been leaving it overseas and expanding overseas facilities with the money.    Ironically, this tax policy results in subsidizing the practice of American corporations investing in infrastructure, and thus jobs, overseas in preference to domestically.

One of the seven "lessons of history" from "Localism, A Philosophy of Government" concerns "corporate persons" and the limits which must be placed on them in order to prevent government and political power from becoming centralized to the death of a Republic.   While some might think the changes proposed are so big as to be unrealistic, what is more unrealistic is to expect a Republic to endure without these changes.   Unless our laws change to align much closer to the ideas espoused in localism, we will see continued crazy policies like the one Obama proposed being put forth.

In fact, we have already seen worse policies.   We have for a long time.  General Smedley Butler, two-time winner of the Congressional Medal of Honor described a wicked process in his book "War is a Racket".   In that book, he said that the corporate giants in this nation discovered they could either invest their earnings at home and get a six cent on the dollar return, or send it overseas and get a twelve or fifteen cent per dollar return.    They chose to send the capital overseas for the higher return.  And they then used their influence with the U.S. government to send our military overseas in order to protect their property.

Do you want to end most of these foreign interventions which are bankrupting the treasury, costing us the very life-blood of our young soldiers, and earning us enemies around the globe?  Then implement Localism's precept which bans both corporations chartered here from also operating overseas and bans corporations which are chartered overseas from operating here.  Insist that corporations only be owned by natural persons, not other corporations.  

There is no other way to maintain national sovereignty.    There is no other way to retain a Republic.   When corporations which are global have more access to our elected officials than we do, it will be they which determine the policies of our government rather than us.   We have seen this already.  When corporations are "trans-national" so too will be the economies which they dominate.     Let them instead form "sister companies" in each nation either owned by the same persons, or not as the case may be.  

In that way, no corporation could be come bigger than the nation in which it operates.     At some point, more size is of no advantage in serving the consumer through increased economies of scale, but rather the size is only useful in lobbying government to use the force of law to advance some policy in their favor.   The only way to stop this from happening is to implement the precepts of localism, under which corporations are not too small to serve, nor may they get "too big to fail."

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