Anyone who knows me and who reads my stuff knows I am not a Donald Trump fan, but I do want him to be successful. I particularly want him to succeed in stopping the exodus of jobs from America but I have little hope. It is unlikely to happen because he belongs to the club he says he can control and because the tariff’s he has suggested have been tried before and only resulted in a rise in consumer prices.
As a billionaire, Trump simply cannot relate to the real world the rest of us live in. He seems oblivious to the fact that World War lll may have begun a long time ago but in an unconventional manner. When there are no bombs or bullets it is easy to miss or ignore the effects, but the war is there nonetheless. It is an economic battle waged by nations on behalf of their corporate sponsors. It is the ultimate clash of capitalist titans seeking to find more profitable ways of separating you from your personal treasure. You see — the entire world has turned to some form of capitalism which means corporate profitability is now the engine that drives not only the corporate world, but governments as well.
These companies sometimes hide behind facades of benevolent service and patriotism, but the purpose never changes. The quest for greater profitability knows no national loyalty and they only pay lip service to human health and safety. They will set up shop wherever the requirements are minimal and the return is maximized. It is always easier and cheaper for them to comply than it is to do what is right.
The Bloomberg Magazine says that American companies are stashing well over $ 2 trillion overseas to avoid taxes and that’s just the tip of the iceberg.
According to Manufacturing and Technology News, America’s biggest companies are continuing to expand offshore, costing thousands and thousands of American jobs.
You might ask, “Why the exodus?” The answer is quite simple, fewer regulations, cheap labor and very high profits. Many of these companies will tell you that they move because of the American 35% Corporate tax rate, but that is a gross exaggeration. Here are the facts from Americans for tax Fairness.
- General Electric, Boeing, Verizon and 23 other profitable Fortune 500 firms paid no federal income taxes from 2008 to 2012.
- 288 big and profitable Fortune 500 corporations paid an average effective federal tax rate of just 19.3% from 2008 to 2012.
- Profitable corporations paid U.S. income taxes amounting to just 12.6% of worldwide income in 2010.
- U.S. corporations dodge $90 billion a year in income taxes by shifting profits to subsidiaries — often no more than post office boxes — in tax havens.
- U.S. corporations officially hold well over $2 trillion in profits offshore — much of it in tax havens — that have not yet been taxed here.
- Several studies have found that U.S. corporations pay a similar or a lower effective tax rate — the rate actually paid — than corporations in other countries. For example: Our average effective tax rate is 27.1% compared with 27.7% for the other 30 OECD countries, according to CRS.
- Citizens for Tax Justice’s survey of 288 corporations, which included most of the Fortune 500 corporations that were profitable each year from 2008 through 2012, found that they paid an average effective federal tax rate of just 19.4 percent over that period.
- Of 125 corporations in that study that had significant foreign profits, 82 (two-thirds) paid a higher effective rate to foreign governments than they paid to the U.S.
Those numbers are not fantasy. The fantasy lies with those who spread the myth that American corporations are over taxed and over regulated. The data I provide here are supported by a number of sources including Financial Sense which offers its own proof that the, “We are overtaxed” lie is simply a convenient excuse for companies to move to countries where labor is cheaper, regulations are minimal and profits are enormous. In some cases, these companies are even subsidized by the host country.
No company in their right mind would dare say, “The U.S. has too many public health and safety regulations, too many employee safety rules, and we should be able to pay employees what we want for as many hours as we can get them to work.” Most of them believe the minimum wage should either be lowered or abolished. They wouldn’t dare say that, so instead they say, “Taxes are and we are so constricted by regulations that we cannot compete.” and all the elected officials whose campaigns they financed bow down and agree, even though many of the complainers don’t pay taxes at all.
What is particularly galling is the fact that the companies are lying and because they provide campaign funding for elected officials, they get those same officials to repeat the lie. Those same officials who are elected by us and whose salaries and perks are paid by us, turn around and lie to us on behalf of their corporate masters. That, my friends, is what you call corrupt government. It is government of, for and by the corporations, not the people.
We have governments because of the need to protect workers and consumers from any number of threats. Government was not established to protect corporations, it was established to ensure the “General Welfare” of the people. Without government regulation, how can we know if food, water, medicine, everything we use in our daily lives is safe? How can we have any assurance that upon returning from our jobs each day we’ll have properly functioning organs and that all limbs and digits are intact?
The entire deregulation movement is aimed at reducing costs rather than restrictions. It costs extra dollars to make sure that both employee and consumer health and safety are protected in the manufacturing process, but these industrial giants care not about human factors. Pofitability and investor return is what drives them.
While industries of all stripes participate in this activity, none is more prominent or blatant than the giant pharmaceutical companies who hold our lives in their hands. Names like Roche, Smith Kline Glaxo, Johnson and Johnson, Pfizer, Novartis, Merk, Sanofi and Bayer. They are among the very biggest but they are joined by hundreds if not thousands of other smaller and growing companies all seeking to make themselves indispensable in our lives because they make the drugs our doctors tell us we need if we want to stay alive. Man – that’s leverage. We are as dependent on the pharma companies as addicts are on drugs.
Need further proof of all of this. Well, we should not be shocked by the following information, but I was. Were you aware that many if not the majority of the meds we take are manufactured overseas and many of them come from China? We all should be well aware of how China totally ignores international treaties, copyright law, patents and other such things. So why should we believe that they follow our guidelines for the purity of our drugs and vitamins?
Read these two stories and then think. You don’t have to comment, you don’t have to “like” this posting, you don’t have to do anything but read these stories and think. First, this story:
“Most New Vitamins Come From China.”
Then, this one.
“Why the FDA is Worried About Chinese Drugs in your Medicine Cabinet.”
Now we can get back to President-Elect Trump. He says he can keep companies here. On the surface, that claim sounds wonderful, but as usual, the devil is in the details. There are only two ways he can keep companies here — by lowering corporate taxes and by eliminating costly regulations. Well, if you haven’t studied the issues, you might think those proposals sound reasonable. They are not. Earlier I offered compelling evidence that corporate over-taxation is a lie. As to regulations, we need most of them. It is government regulation that keeps you safe at work and ensures that the air you breathe, the food you eat and the medicine you take won’t kill you.
Mr. Trump has also suggested raising tariffs on imported goods. In common English that means he would tax imported goods, but does that hurt the exporting company? No. Tariffs increase the prices of imported goods. Because of this, domestic producers are not forced to reduce their prices from increased competition, and domestic consumers are left paying higher prices as a result. Tariffs also reduce efficiencies by allowing companies that would not exist in a more competitive market to remain open.
If we levy a tariff, what’s to stop countries who import from the U.S. from levying tariffs of their own? Then we are in a trade war. For every tariff we levy we’ll likely have a similar tariff levied against us. But…in case you don’t believe me because I’m a liberal, here’s the proof. President Obama did what Trump is suggesting and it blew up in his face. In 2009, President Obama tried to put a tariff on Chinese auto and truck tires. It was Obama who said he wanted to encourage China to “play by the rules,” exactly the same language used by Trump during the campaign. Obama’s effort was a huge failure. A 2012 study by the Peterson Institute for International Economics found that the Obama tariff saved a maximum of 1,200 jobs but resulted in higher prices to consumers to the tune of $1.1 billion in 2011. The added cost to consumers per job saved, amounted to nearly $1 million in that year alone.
So the question remains; what do you do about companies exporting jobs to foreign countries. Some suggest that there’s not much that can be done and that maybe the U.S. has to change the way it looks at itself on the world stage. Maybe we are the creators, the inventors, the people who dream up wonderful new products and get paid handsomely for our efforts while the actual production gets done elsewhere. I’m not advocating it…it’s just a thought. I’d suggest that Mr. Trump revisit his plan because it’s old thinking, it does nothing to help the average citizen. He needs to come up with something new, something revolutionary instead of falling back on old tactics that have been proven to result in negative effects on American citizens.
There is another move that he could take. It is bold and decisive and would certainly return government to the people. It would eliminate those huge campaign contributions that cause our elected representatives to lie to us for their corporate masters. All Mr. Trump has to do is throw the weight of the Presidency behind overturning Citizen’s United. That would show the corporations who is boss.
And that, my friends is the truth.