Opinion
Big Business Gets Something for Nothing
I
n early June, as a prelude to an
expansive study of the Fortune
500 due later this summer,
Citizens for Tax Justice (CTJ)
published an analysis of “the cur-
rent corporate tax debate.”
Anarchists oppose taxes on princi-
ple as an exalted form of theft, but
the fact that the most profitable
firms in the country aren’t paying
up raises other important ques-
tions.
Arguing that the “tax code has ...
become overburdened with loop-
holes, shelters and special tax
breaks,” CTJ’s study demonstrates
that twelve of America’s largest
companies currently pay, in effect,
a tax rate of negative 1.5 percent.
That means that some corpora-
tions — among them, Boeing —
are in fact making money through
the tax system as it is currently
operating.
Even apart from its tax bill
sleights of hand, corporate
America is the beneficiary of fed-
eral spending that amounts to a
gratuitous handout. While none of
us working folk pay negative tax
rates, the state has, for decades,
channeled our greenbacks to
favored Big Business players.
C4SS
David D’Amato
It’s no exaggeration at all to sin-
gle out corporate welfare as the
defining feature of the American
political system, to see the federal
government itself as just a slimy
culvert for giveaways to the rich.
In the United States, though,
champions of
our system of
“free
enter-
prise”
keep
themselves per-
petually up in
arms only at
“illegals” and
the inner city
poor “getting
something for
nothing.”
The American Right is quick to
denounce cradle-to-grave welfare
statism, carping that people on
public assistance ought to “pull
themselves up by their boot-
straps.” But if we really, sincerely
oppose people living off of the
hard work of others, then perhaps
it is time we undertook an honest
inquiry into who benefits most
from the welfare state.
As Stephen Slivinski observes,
companies like “Boeing, Xerox,
IBM, Motorola, Dow Chemical,
General Electric, and others have
received millions in taxpayer-
funded benefits through programs
like the Advanced Technology
Program and the Export-Import
Bank.”
Through policies ranging from
market” to mean “field day for
moneyed bigwigs.”
Since all we ever hear from the
corporate establishment are claims
that we presently enjoy a free mar-
ket system, such confusion is a
matter of course.
Contrary to the scores of corpo-
rate press releases dominating the
media, however, freedom and
competition don’t translate to fun-
neling billions of dollars from
struggling tax-
payers to suits at
the largest com-
panies in the
world. Whatever
anyone thinks of
the free market in
theory, the statist
“public/private
partnerships” we
have today just
aren’t it.
Market anarchists — who regard
free markets as a means of liberat-
ing working people from corpo-
rate mastery — have no interest in
identifying with today’s collusive
economic framework. As philoso-
pher Roderick Long explains,
market anarchists regard the pres-
ent economy as one in which “cor-
If we really, sincerely oppose people
living off of the hard work of others,
then perhaps it is time we undertook
an honest inquiry into who benefits
most from the welfare state
direct subsidies and grants for
research and development to the
Foreign Military Financing
Program, the federal government
is a goose laying golden eggs for
the rich. Although none of these
policies are properly part of a free
market, it’s understandable that
conscientious,
left-leaning
Americans look understand “free
poratism [is] systematic and all-
pervasive” rather than “mere fric-
tion in an essentially free-market
mechanism.”
The state provides an exceeding-
ly valuable service to the rich.
Unlike ordinary working people,
however, who have to pay for the
“services”that the state ostensibly
provides us, Big Business just has
to kick back and guzzle down our
dollars. Comparing public assis-
tance for the poor with corporate
welfare, do we really have to won-
der whom the state intends to
serve?
A market anarchist society, free
of the state’s upward redistribu-
tion, would break the elite’s coer-
cive monopolization of societal
wealth.
Absent the state, there are plenty
of seats at the table of economic
plenitude. Today, on the other
hand, those seats are stolen as
footrests for the idle rich.
David S. D’Amato is a market
anarchist and a lawyer with an
LL.M. in International Law and
Business
Bush Tax Cuts: 10 Years of Economic Disaster
This month marks the tenth
anniversary of the first of the two
tax cuts sought by the President
George Bush. The Economic
Growth
and
Tax
Relief
Reconciliation Act was enacted in
2001 to be followed, in 2003, by
the Jobs and Growth Tax Relief
Reconciliation Act. Ten years
later, it is time we assess the actu-
al results of these tax cuts, looking
at economic performance rather
than political promises. The
results have been a disaster for the
US economy and for almost all of
the American people. We have
experienced very slow income and
employment growth for the vast
majority of families, an extremely
unequal distribution of the direct
financial benefits from these
measures, and, very slow growth
in the economy as a whole.
As someone who has personally
A MERICAN F ORUM
Dr. William Barclay
2.3% from the end of the 2000 –
01 recession to the onset of the
Great Recession. This is unique in
the post WWII period. Further,
the recovery from the 2000 – 01
recession was the slowest of any
post WWII recession to date,
requiring 39 months before the
number of employed Americans
reached the pre-recession level.
Where is even a scintilla of evi-
dence that tax cuts such as those
passed in 2001 and 2003 generate
income and employment growth
for the vast majority of the popu-
lation?
A significant part of the failure
of the Bush tax cuts to generate
jobs and income growth flows
from the top-
heavy distribu-
tion of the bene-
fits conveyed by
t h e s e
measures. The
vast bulk of the
reduced taxes
were reaped by
a very small number of families.
In 2011, the average tax reduction
to families receiving an income of
$1 million or more (about 321,000
families) will be $139,199. For
this less than 0.5% of all families
this is a reduction in taxes of $860
million/week. Compare these tax
benefits to the yearly savings pro-
posed by cutting the WIC pro-
gram: $833 million. An obvious
question is, why can’t this very
small group of extremely high
income families give up just one
week of their tax cut to provide
nutrition for the tens of thousands
of women and children that bene-
fit from the WIC program? More
significantly, in light of the deficit
... the combined impact of
the Bush tax cuts has been
the addition of more than
$2.6 trillion to the debt ...
received these tax cuts during the
past 10 years, I feel it is my
responsibility to speak out.
Supporters of tax cuts for high
income households, such as House
majority leader John Boehner,
argue that wealthy people are the
“job creators” and that tax cuts
will encourage them to create jobs
and that these new jobs will, in
turn, increase employment oppor-
tunities and improve the wages of
the remainder of the population.
Did any of these benefits occur
after the Bush tax cuts? The quick
and accurate answer is, no, they
did not. Adjusted for inflation, the
median weekly earnings of work-
ing Americans actually fell by
hysteria gripping Washington
D.C., the combined impact of the
2001 and 2003 Bush tax cuts has
been the addition of more than
$2.6 trillion to the federal debt.
This included more than $400 bil-
lion in interest payments on the
debt necessary to pay for the cuts.
Of course, one might forgive
these policy failures if the promise
of economic growth had been ful-
filled. On this measure, however,
the record is even worse. The
2000 – 01 recession ended in the
fourth quarter of 2001, just in time
for the first Bush tax cut to take
effect. From the end of the reces-
sion until the onset of the Great
Recession, the economy grew at a
slower rate than in any other post
recession period since WWII.
Thus, despite promises from the
advocates of the tax cuts, the real-
ity was slower growth rather than
faster growth. The additional tax
cut in 2003 did nothing to increase
the pace of economic growth.
In sum, the Bush tax cuts were a
bad idea at the time and are an
even worse idea today. Ending
these cuts for incomes over
$250,000 would generate over
$100 billion/year in additional
revenue. If we also created addi-
tional tax rates for very high-
income families (e.g. at $500,000,
$1,000,000, $5,000,000 and
$10,000,000) we could increase
federal revenue by more than dou-
ble that amount and put us on the
road to reducing deficits and
debts.
Barclay worked for 22 years in
financial service before retiring in
2004.
He instructs at the
University of Illinois at Chicago
Liautaud Graduate School of
Business and is a member of
Wealth for the Common Good.
Week on the Web
Sen. Ron Wyden has
introduced
legislation
cracking down on GPS
spying ... in “Breaking
News”
Steve
Wonder
was
inducted into the Apollo
Theater’s Legends Hall of
Fame this week ... in
“Music Reviews”
A Congressional report
criticizes the ATF for their
role in a gun smuggling
operation to Mexico ... in “National
News”
Kam Williams interviews
HawthoRNe’s
Jada
Pinkett Smith, who talks
about her career and taking care of her
children Willow and Jaden ... in
“Movie Reviews”
www.
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The Portland and Seattle Skanner June 15, 2011 Page 5