Archive for May 31st, 2013

Out of nowhere this song began playing in my head yesterday. It is a tune I hadn’t heard in many years. Bruce Cockburn is one of the few folk or rock singers whose lyrics stand alone as poetry, and this mystical song is what he does best, from 1976’s album of the same name.

Read Full Post »

Back Asswards

That is the term my grandfather used for people who get something precisely backwards.

Take, for example, Ayn Rand’s model of the “makers” and the “takers”, a model widely accepted by contemporary “conservatives”; ie, economic liberals.

The “makers” are those brilliant entrepreneurs and businessmen, the “wealth makers” and “job creators”. In this schema, these elites create wealth for everyone. The rest of us, the workers and the poor especially, are the “takers”, the leaches who exist parasitically on the abundance created by the “makers”.

This is back asswards.

The most brilliant idea and the most generous start-up cash will not turn a dime without workers to create the goods or provide the services the entrepreneur envisions. It is the worker who is the maker of wealth, a truth attested to by Karl Marx, Abraham Lincoln, and Catholic social teaching. The capitalists and speculators, the real takers, take the abundance created by the workers, give them back a pittance, and keep the rest for themselves. This is perhaps starkest in the case of Walmart, where Sam Walton’s heirs, among the richest people in the world, preside over a workforce living on such low wages that many of them receive public assistance.

But there are other ways in which it is the rich who are the takers; this, from Truthout:

Corporations Stopped Paying

In the past twenty years, corporate profits have quadrupled while the corporate tax percent has dropped by half. The payroll tax, paid by workers, has doubled.

In effect, corporations have decided to let middle-class workers pay for national investments that have largely benefited businesses over the years. The greater part of basic research, especially for technology and health care, has been conducted with government money. Even today 60% of university research is government-supported. Corporations use highways and shipping lanes and airports to ship their products, the FAA and TSA and Coast Guard and Department of Transportation to safeguard them, a nationwide energy grid to power their factories, and communications towers and satellites to conduct online business.

Yet as corporate profits surge and taxes plummet, our infrastructure is deteriorating. TheAmerican Society of Civil Engineers estimates that $3.63 trillion is needed over the next seven years to make the necessary repairs.
Turning Taxes Into Thin Air

Corporations have used numerous and creative means to avoid their tax responsibilities. They have about a year’s worth of profits stashed untaxed overseas. According to the Wall Street Journal, about 60% of their cash is offshore. Yet these corporate ‘persons’ enjoy a foreign earned income exclusion that real U.S. persons don’t get.

Corporate tax haven ploys are legendary, with almost 19,000 companies claiming home office space in one building in the low-tax Cayman Islands. But they don’t want to give up their U.S. benefits. Tech companies in 19 tax haven jurisdictions received $18.7 billion in 2011 federal contracts. A lot of smaller companies are legally exempt from taxes. As of 2008, according to IRS data, fully 69% of U.S. corporations were organized as nontaxablebusinesses.

There’s much more. Companies call their CEO bonuses “performance pay” to get a lower rate. Private equity firms call fees “capital gains” to get a lower rate. Fast food companies call their lunch menus “intellectual property” to get a lower rate.

Prisons and casinos have stooped to the level of calling themselves “real estate investment trusts” (REITs) to gain tax exemptions. Stooping lower yet, Disney and others have added cows and sheep to their greenspace to get a farmland exemption.
The Richest Individuals Stopped Paying

The IRS estimated that 17 percent of taxes owed were not paid in 2006, leaving an underpayment of $450 billion. The revenue loss from tax havens approaches $450 billion. Subsidies from special deductions, exemptions, exclusions, credits, capital gains, and loopholes are estimated at over $1 trillion. Expenditures overwhelmingly benefit the richesttaxpayers.

In keeping with Ayn Rand’s assurance that “Money is the barometer of a society’s virtue,” the super-rich are relentless in their quest to make more money by eliminating taxes. Instead of calling their income ‘income,’ they call it “carried interest” or “performance-based earnings” or“deferred pay.” And when they cash in their stock options, they might look up last year’s lowest price, write that in as a purchase date, cash in the concocted profits, and take advantage of the lower capital gains tax rate.

You can read the whole thing here.

It is clear that the real makers must become the “take backers”; that it is high time for radical action for economic democracy. How this can occur, given the widespread complacency among the working class, is not clear. The Occupy movement certainly made great strides in raising awareness  about economic disparity and corporate power, but there is much work to be done before reform can occur. Not least, the reelection of a phony populist tends to lull many; Obama’s policies, if he were named Bush or Romney, would have inspired outrage.

All we can do is whatever small part that is within our power to do, and to hope and pray for justice.

Read Full Post »