Washington elites are "optimistic" about another "reform." That's never good.
According to an article in The Hill this week, "WH adviser 'optimistic' for corporate tax reform":
A top economic official in the White House on Tuesday expressed confidence that the next Congress can pass corporate tax reform.
... Obama has proposed lowering the corporate statutory rate from 35 percent to the high-20s while eliminating many deductions. Camp also proposed to lower the rate, but down to the mid-20s.
Camp has proposed shielding most of the profits corporations make offshore from U.S. taxation, while Obama has called for a minimum tax on global earnings.
Why is it that any time you hear the word "reform" coming out of Washington, it always ends badly for about 99 percent of us? They talk about entitlement "reform" – meaning cutting Social Security and Medicare. They talk about regulation "reform" – meaning our food and workplaces are going to be less safe. They talk about spending "reform" – meaning doing less of the things that make We the People's lives better. (They never "reform" the military budget. It is more than double what it was when 'W' Bush took office. Because we have to defend against the Soviet Union.)
"Reform" is lobbyist-speak for opening up the floodgates, hanging the flags out, lighting the savings accounts on fire, letting dozens of blackbirds fly out of the pie, letting the horses out of the barn and generally fleecing the citizenry.
"Reform" is politician-speak for "time to start the money flowing our way because the favors are going to be flowing your way."
- Corporate profits are the highest ever.
- The corporate tax portion of federal revenue dropped from around 32 percent in 1952 to around 8.9 percent now.
- Corporate taxes have fallen from about 6 percent of GDP then to less than 2 percent now.
- Corporate taxes used to be 52.8 percent, then 48 percent then 46 percent. Then we did "tax reform" and lowered that to 35 percent.
- Corporations are holding around $2 trillion "outside of the country" to dodge taxes. That represents up to $700 trillion in taxes owed.
- Corporations "strip income" by having a non-U.S. affiliate "loan" money to a U.S.-based affiliate. The interest is deductible from US income so taxes are lower.
- As of 2007, the top 1 percent owned 50.9 percent of all stocks, bonds, and mutual fund assets. The top 10 percent owned 90.3 percent. The bottom 50 percent owned 0.5 percent. Things have concentrated upward since then, with all economic gains from the recovery going to the top few.
And now they're trying to "reform" the corporate tax system once again.
There are some actual reforms that are actually needed.
- Current tax laws actually give a tax break to companies to help them move jobs and facilities out of the country! In July Senate Republicans filibustered to kill a bill that would stop this.
- Current tax laws give huge tax subsidies to oil companies. Senate Republicans filibustered to kill a bill that would stop this. (and did it again)
- Current tax laws let companies "defer" taxes on profits made outside the U.S. A simple 5 percent-per-year surtax on this deferred income would stop this and raise literally hundreds of billions of dollars for our schools, courts, roads, and other public assets.
- Corporate taxes have fallen from about 6 percent of GDP to less than 2 percent. It's time to reverse that and restore funding for infrastructure, courts, schools, etc., boost Social Security and other programs that make OUR lives better.
What do you think the odds are that we will get actual "reform" that will actually make things better?
It's The Money
Everyone know why things are this way. It's the money. The money is allowed to buy influence in our system, and those with the most money are able to buy the most influence. Giant multinational corporations (and the billionaires behind them) have the most money, so they can buy even more tax breaks which means they have even more money so they can buy even more influence.
Politicians get the money to run all of those nasty, lying, smear-ads that trick people – or if they don't trick people they convince people to stay home and not vote. And when they do get voted out of office they go to their reward: a big-money job with the corporations (and the billionaires behind them) who they were helping while in office.
The Nation explains, in "When a Congressman Becomes a Lobbyist, He Gets a 1,452 Percent Raise (On Average).". CBS' "60 Minutes" explains in "Under the Influence."
Here's an idea. How about a new rule: People involved in making national policy can't be getting money or planning on future money from the beneficiaries of that policy. In other words, if you are involved in setting corporate tax rates, you're not allowed to be getting money from corporations now, or hoping to leave government and get money from corporations and/or billionaires. Period.
We should ban people in government from taking jobs (or "speaking fees" or stock or jobs at "institutes" funded by corporations or any other payoffs) that pay significantly more than they make now for a period of maybe seven years.
We should call "campaign donations" from interested parties what they are: bribery. If a company is giving shareholder money to a campaign, an "independent" campaign, even a "think tank" that is actually helping a politician or political party, that is an attempt to purchase influence. Companies don't "speak," they engage in transactions. Companies do not give out their money expecting nothing in return. If companies – or people – are giving money to politicians and expecting something back, by law that is the definition of bribery.
Get the money out first. Then maybe we can get some actual reform that actually helps actual people.