Category Archives: Corporations

Teapublican Lie #7.

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“Raising taxes on millionaires will hurt small business.”

After all, most small businesses are owned by millionaires, right? Rrrrright!

This whopper seems to stem from the Teapublican definition of small business. You see, they define small business by ownership rather than brands, offices, employees or income. In other words, since Cargill is a closely held, privately-owned company, Teapublicans define it as a “small” business. Similarly, they define Koch Industries as a “small” business. In case you don’t already know, these are the two largest privately-held corporations in the world! Both measure their profits by the billions. Yet Teapublicans lump them into the same category as the owners of the small clothing store on Main Street or the corner café!

In the interest of full disclosure, I’ve been a small business owner since 1987. Moreover, I’ve served hundreds of small businesses as clients. As it happens, I have also completed projects for Cargill and Koch Industries. I can tell you beyond the shadow of a doubt that those companies have absolutely nothing in common with small businesses. And I can tell you that 99 percent of the other clients are not owned by millionaires, let alone billionaires.

So, President Obama and Congress, go ahead, raise taxes on millionaires and billionaires. Most small business owners will thank you for it.

Teapublican Lie #5.

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“Regulations are bad for business.”

Teapublicans have been slinging this bovine excrement around for years. “Businesses face mountains of government red tape that make it impossible for them to operate,” they say. I admit it sounds plausible, but it’s just not true.

Certainly, every industry faces government regulations. But those regulations are not necessarily bad. For example, food growers must meet food safety regulations. They must maintain sanitary conditions and monitor the use of pesticides and chemicals. Not exactly onerous regulations, unless you don’t mind getting food borne illnesses. Similarly, restaurants must pass inspections for cleanliness and food preparation. Hotels must meet standards for safety and cleanliness…the list of such examples is long.

Contrary to the Teapublican talking point, a recent study by McClatchy Newspapers found that small business owners don’t feel that regulations and taxes are strangling their businesses at all. As a matter of fact, many of the business owners surveyed felt that the regulations actually create consumer confidence which is good for business.

So, if small business owners don’t oppose government regulations, who does?

One can conclude that the businesses most harmed by government regulation are those that don’t care about consumer safety. Companies that want to trash our environment without repercussions. Companies that want to cut corners to save money. Companies like BP, which apparently cut corners on a blowout preventer resulting in the worst environmental tragedy in history. Companies that buy toys painted with lead because they’re cheaper. Companies that purchase ingredients for pet food without testing them.

These aren’t small businesses. They’re huge, multi-national conglomerates that are more concerned about their bottom lines than their customers. If they don’t care about us, why on Earth should we care about them?

Teapublican Lie #2.

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“US corporate taxes are the highest in the world.”

You’ve heard it over and over during the past 2-1/2 years. Not only from Teapublicans. But from supposedly authoritative sources such as the US Chamber of Commerce. So let’s examine this myth more closely.

While it is true that the corporate income tax rate for the US is 34.2% (which includes a state tax rate of 6%), that is not significantly higher than the corporate tax rate for many other developed nations, and it’s less than Japan’s. Brazil has a rate of 32.5%; France and Germany have tax rates of more than 31%; Australia 30.8%; Canada 28% and the UK has a rate of 25.4%.

More to the point, this is not the rate that most large US corporations actually pay. In fact, the effective tax rate for large US corporations (after deductions and subsidies) is less than 18%!

For example, 12 major corporations made $171 billion in profits from 2008 to 2010, yet had a negative income tax rate of 1.5 percent! And the most egregious example is GE. Last year the global conglomerate generated $10.3 billion in pretax income, but ended up owing nothing in US federal income taxes. In fact, it recorded a tax benefit of $1.1 billion!

Moreover, employer payroll taxes in the US are just 7.7% – less than Korea, India, Mexico, Poland and most of the developed world. And since the 1940s, the corporate share of all federal income taxes has dropped dramatically. In 1940, corporations paid 43 percent of all the federal income taxes collected in the US. But, in 2010, that percentage was only 8.9 percent! Indeed, the US raises less corporate tax revenue than most developed countries.

So though the US has the world’s 2nd highest corporate income tax rate, the rate actually paid by US corporations is much lower. In fact, our effective tax rate is less than that of even Mexico, India, Vietnam, Korea, China and Russia. And that’s the truth!

The “I’ve Got Mine, You Don’t Deserve Yours” Crowd.

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According to a recent MSNBC.com article by Brian Alexander, lower class people are more likely to have empathy and compassion while the rich are more likely to think of themselves.  

The article confirmed my own observations. 

As an advertising executive, I’ve often listened to wealthy and powerful clients talk about how their success is the result of their own hard work, determination and risk-taking. They rarely give credit to the many other factors that have played a role in their success. 

They tend to forget that their educations were subsidized by local, state and federal governments. They forget the scholarships and low interest government loans that helped them pay for college. They forget about the Small Business Administration loans that provided the seed money for their companies.  They forget about the Tax Increment Financing that resulted in a no-interest, no-property tax loan for their company headquarters.  They forget about the contributions of their employees and suppliers. And they tend to forget about the contributions of their family, teachers, coaches and mentors who helped shape their lives.

One of my former clients, who received more than $50 million/year in compensation, once demanded that his managers fire 10 percent of their workforce after a year of record profits and then hire new replacements.  His reasoning?  He wanted to make certain that his employees would not “rest on their laurels” so he could make even more money the next year.

Fortunately, he was an exception. But an uncomfortable number of people are similarly driven. And because they are so firm in their belief that they “made it on their own,” they are often unwilling to help others reach for success.

It is this mindset that is at the very heart of the Tea Party movement. Their anti-tax, anti-deficit, anti-government, anti-Obama rants are driven by a philosophy best expressed by a quote from their hero, Ayn Rand, “It is the morality of altruism that men have to reject.”

That philosophy clearly explains their opposition to social safety nets such as Social Security, Medicare and Medicaid. It explains their opposition to the extension of unemployment benefits and any government spending to stimulate our moribund economy.  It explains why are they so opposed to the very government institutions that made their success possible.

But according to the MSNBC.com article, “Rich people may not be selfish as much as willfully clueless.  Research at Duke and Harvard universities showed that regardless of political affiliation or income, Americans tended to think wealth distribution ought to be more equal. The problem? Rich people wrongly believed it already was.”

World’s Greatest Nation? Really?

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Although many Americans are fond of calling the US the greatest nation on Earth, that hasn’t been true for many years. Certainly we have the world’s most powerful military, but that’s no criteria for greatness. Neither is the fact that we are still the world’s richest nation, despite the downgrade in our credit rating by Standard & Poors.

But greatest?

Does a great nation tolerate an ever-widening gap between billionaires and the working poor? Does a great nation leave tens of millions of its citizens without access to health care? Does a great nation allow millions of its children to be homeless? Does a great nation allow its education system to become third-rate? Does a great nation allow its infrastructure to decay and collapse merely to give another tax cut to large corporations and the wealthy?

Does a great nation use its financial and military power to prop up brutal dictatorships around the world? Does a great nation bankrupt the small farmers of neighboring countries by subsidizing corporate farms then demonize those farmers when they cross the border looking for jobs? Does a great nation demean those who labor to build things with their hands, to put out fires, or to teach its youth? Does a great nation begrudge a comfortable retirement to its elderly? Does a great nation allow large corporations and the wealthy to elect its politicians?

How can a nation be called great when it rewards greed and corruption? When its judicial system rules that corporations have rights superior to those of its citizens? When its financial institutions are allowed to grow so large they are immune to failure from their own mistakes? When its corporate lawyers are tasked with seeking out financial and legal loopholes that allow their clients to game the system? When its politicians are more concerned with scoring political points than the welfare of its voters? When its citizens are more interested in the antics of its celebrities than those of its government? When it allows its previous leader to run up a huge debt, and then blames the leader who inherited it?

We didn’t need Standard & Poors to tell us that our nation is on the verge of bankruptcy. When it comes to fairness, ideas and ethics, the US has been on the verge of bankruptcy for many years.

Republicans In Denial (As In Denial Of Any Democrat Proposal)

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Today, Congressional Republicans pulled out of negotiations to resolve the deficit.  And (here’s a shocker) they blamed Democrats.  Their reasoning is that Democrats insist on tax increases rather than merely relying on more than $1 trillion in cuts to Medicare and other programs. 

“Let me be clear.  Tax hikes are off the table,” said House Speaker John Boehner. 

So, according to Republicans, even though the major cause of the deficit is the Bush era tax cuts (primarily for the wealthy), the only way to cut the deficit is by cutting spending for Medicare, Medicaid, Social Security, Planned Parenthood, Public Broadcasting, the Environmental Protection Agency, the Consumer Protection Agency, the Department of Education, etc.  At the same time, Republicans refuse to consider cuts to subsidies for Big Oil and corporate agriculture which they say would be tax hikes.  Of course, they also want to repeal the Affordable Care Act and repeal regulations on the financial industry.

So according to Republicans, when it comes to deficit negotiations, everything is on the table.  Except anything that Democrats want.

I guess that’s what passes for “bipartisan negotiations” these days.

Warring States, Part Two

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Recently, I posted a list of wars fought by the US military.  What I didn’t include were the many more military threats intended to force trade with US corporations or to protect our corporate interests overseas.  That list would be many times longer.

In search of resources and markets for our corporate products, we have forced our way into nations all over the world – from Aregentina to Zaire.  And now that we have created the so-called global marketplace, we use the threat of military action to protect our corporate investments anywhere in the world.

That being the case, next time you hear the media refer to a foreign policy or a military deployment as necessary to protect American interests, ask yourself the following questions: 

When did we amend the US Constitution to require our military to protect greedy corporations?  What is the real reason behind the Teapublican push to replace government agencies with for-profit corporations under the label of “privatization”?  Who is really running our government?

Warring States

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The current debate about withdrawing troops from Afghanistan and Iraq, and the anniversary of Daniel Ellsburg’s release of Pentagon papers started me thinking about our history of wars. When I looked it up, I was stunned!

Since our Declaration of Independence, the United States of America has been almost constantly at war. In fact, not counting the Cold War and relatively minor deployments intended to protect American “interests” abroad, the US has been at war all but 33 years of its 236 year history!

Now you may try to justify those wars (as I used to) by assuming they were the result of our desire to spread democracy around the world and to defend human rights.

You could use that argument. But you’d be wrong.

After wresting the continent away from Native Americans, Great Britain, France, Spain, Russia, and Mexico, our military has spanned the globe. Few of our enemies actually attacked us. More often, wars resulted from a perceived threat to our future and security, especially that of our large corporations. Following is a partial list of military actions involving the US:

1775-83 – Revolutionary War
1776-1915 – Indian Wars
1798-1800 – Quasi-War (undeclared naval war with France)
1801-05 – First Barbary War
1806-10 – Mexico
1810-18 – War with Spanish Florida
1812-15 – War of 1812
1815 – Second Barbary War
1824 – Puerto Rico
1838-39 – Indonesia
1840 – Fiji Islands
1841 – Samoa
1843 – China
1844-48 – Mexican-American War
1853-54 – Japan
1854 – Nicaragua
1857-58 – Utah War (dispute with Mormons)
1859 – Mexico
1861-65 – Civil War
1863-64 – Japan
1866 – Mexico
1866 – China
1867 – Nicaragua
1868 – Japan
1871 – Korea
1873-96 – Mexico
1889 – Kingdom of Hawaii
1893 – Kingdom of Hawaii
1898 – Spanish-American War
1899-1913 – Phillipine-American War
1900 – China (Boxer Rebellion)
1914-17 – Mexico
1915-34 – Haiti
1917-18 – World War I
1918-19 – Mexico
1918-20 – Soviet Union
1941-45 – World War II
1945 – China (vs. Japanese)
1950-53 – Korean War
1955-75 – Vietnam
1957-75 – Laos
1965 – Dominican Republic
1968 – Laos & Cambodia
1975 – Angola
1983 – Grenada
1989 – Panama
1991 – Gulf War
1992-96 – Bosnia and Herzegovina
2001-present – Afghanistan
2003-present – War in Iraq

Moreover, since the end of World War II our military, led by the Central “Intelligence” Agency, has overthrown numerous democratically-elected leaders throughout the world. As a result of this incessant meddling, millions have been imprisoned, tortured and killed. For example:

1953 – In Iran, the CIA overthrew democratically-elected Mohammed Mossadegh and replaced him with a brutal dictator, the Shah of Iran.
1954 – In Guatemala, the CIA overthrew democratically-elected Jacob Arbenz after he threatened to nationalize the United Fruit Company, in which CIA Director Allen Dulles owned stock. The right-wing dictators who replaced Arbenz killed more than 100,000 Guatemalans.
1957-73 – In Laos, the CIA carried out approximately one coup a year trying to nullify Laos’ democratic elections.
1959 – In Haiti, the U.S. military helped “Papa Doc” Duvalier become dictator.
1961 – In Dominican Republic, the CIA assassinated Rafael Trujillo, a brutal dictator supported by Washington. But only after his business interests began competing with our own.
1961 – In Ecuador, CIA-backed military forced democratically-elected President Jose Velasco to resign.
1961 – In Congo (Zaire), the CIA assassinated democratically-elected Patrice Lumumba.
1963 – In Dominican Republic, the CIA overthrew democratically-elected Juan Bosch and installed a repressive, right-wing junta.
1963 – In Ecuador, CIA-backed military overthrew President Arosemana. A military junta assumed command and began abusing human rights.
1964 – In Brazil, a CIA-backed military coup overthrew democratically-elected Joao Goulart and replaced him with a brutal junta.
1965 – In Dominican Republic, a popular rebellion tried to reinstall Juan Bosch. The revolution was crushed by CIA-led U.S. Marines.
1965 – In Indonesia, the CIA overthrew democratically-elected Sukarno. His successor, General Suharto, massacred 500,000 to 1 million civilians.
1965 – In Greece, with CIA backing, the king removed George Papandreous as prime minister for failing to support U.S. interests in Greece.
1965 – In Congo (Zaire), CIA-backed military installed Mobutu Sese Seko who exploited his country for billions.
1967 – In Greece, CIA-backed military overthrew the government two days before elections. The ensuing “reign of colonels,” backed by the CIA, tortured and murdered political opponents.
1967 – In South Vietnam, the CIA helped identify and murder 20,000 alleged Viet Cong leaders.
1969 – In Uruguay, notorious CIA torturer Dan Mitrione ascended to power becoming so feared that revolutionaries kidnapped and murdered him a year later.
1970 – In Cambodia, the CIA overthrew popular Prince Sahounek and replaced him with Lon Nol. The move strengthened the Khmer Rouge, which rose to power and massacred millions.
1971 – In Bolivia, CIA-backed military overthrew leftist President Juan Torres. He was replaced by Hugo Banzer who had more than 2,000 political opponents arrested, tortured, raped and executed.
1973 – In Chile, the CIA assassinated democratically-elected Salvador Allende. He was replaced by General Augusto Pinochet, who tortured and murdered thousands of his own countrymen.
1975 – In Angola, the CIA helped launch a war killing more than 300,000 Angolans.
1979 – In Nicaragua, following the fall of CIA-backed Anastasios Samoza II, the remnants of his personal National Guard became the Contras, who fought a CIA-backed guerilla war against the Sandinista government.
1980 – In El Salvador, following the murder of Catholic Archbishop Oscar Romero, the country dissolved into civil war. CIA-trained death squads roamed the countryside, committing atrocities and killing 63,000 Salvadorans.
1983-89 – In Honduras, the CIA taught Honduran military officers how to torture people. The notorious “Battalion 316” used the techniques on thousands of leftist dissidents.
1986 – In Haiti, following the exile of “Baby Doc” Duvalier, the CIA rigged elections in favor of another right-wing military strongman. The CIA-created National Intelligence Service (SIN) suppressed popular revolt through torture and assassination.
1990 – In Haiti, after leftist priest Jean-Bertrand Aristide captured 68 percent of the vote he was deposed by CIA-backed military which brutalized the country.
1993 – In Haiti, as chaos grew, military dictator, Raoul Cedras, is removed on threat of U.S. invasion. Aristide is returned to power only after being forced to accept an agenda favorable to the country’s ruling class.

Here’s an idea. If Americans are as serious about wanting peace as most claim, maybe we could stop meddling in the internal politics of other nations. Then we could take half of our massive defense budget to solve real problems like poverty, climate change, diminishing energy resources, air and water pollution, and health care.

But given our propensity for war, that will probably be viewed as unpatriotic.

The Corporate Takeover Of America

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It’s really nothing new.  For many years, large corporations have been given special privileges by our governments.  After all, it’s believed that they expand the tax base and fuel our economy.

But do they really?

The vast majority of jobs in the U.S. are created by small businesses.  And, while it is true that large corporations are responsible for large contributions to local, state and federal taxes, the contributions are largely the result of their employees’ tax payments.  Fact is, given the resources they consume, the pollution they create, and the expensive infrastructure they require, large corporations pay relatively little in taxes.

What large coporations and their executives do contribute are donations to the political campaigns of those who will give them what they want – government access, influence and power.  And those donations have paid off handsomely in recent years.

Despite the fact that government deficits have increased dramatically over the past 30 years, corporate taxes have routinely diminished.  Indeed, city, county, state and federal governments have bent over backwards to attract and appease large corporations.  For example, cities have provided Tax-Increment Financing (TIF) to large corporations, allowing them to avoid paying property taxes on large buildings.  And when the TIF expires, another large corporation purchases the building with the help of (you guessed it) Tax-Increment Financing.

Counties and states often provide no-interest loans and exemptions from regulations to attract large corporations.  And the federal government often creates tax loopholes to the benefit of corporations.  Many have been given tax breaks for setting up a P.O. box offshore to create a new “headquarters.”  And many have been given tax breaks for exporting manufacturing and tech-support jobs to other countries.

So how have large corporations repaid these favors?

They routinely pull up stakes at the first hint of increased taxes or regulations.  And they fund political campaigns against any elected official who has the temerity to oppose them.  Of course, corporate meddling in our political process will only increase now that the Republican-controlled Supreme Court has ruled that corporations enjoy the Constitutional rights of individuals (a startling decision given the fact that a corporation is little more than a piece of paper that creates a corporate “veil” protecting its founders from creditors in the event of failure).

The Corporate Takeover Of Political Funding.

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Quick.  Tell me which political contributions are most scruitnized by our government:  Individual contributions of $20 or less to candidates?  Or multi-million dollar gifts from corporations to political action committees?

If you guessed the latter, you’re wrong.

Political parties, local clubs and individual candidates are required to account for every political donation to the penny.  On the other hand, political action committees such as those created by Karl Rove to attack Democratic candidates don’t even have to disclose the sources of tens of millions in contributions.

What’s wrong with that picture? 

In the Citizens United case, the Republican appointees to the Supreme Court of the United States overturned decades of legal precedent to rule that corporations have the same rights as individuals.  Yet, in the political arena, corporations now enjoy the privilege of spending as much as they want to influence elections without disclosing their contributions.  And how many large corporations are run by Democrat-leaning CEOs?

Unless you’re an executive of a large corporation or a Republican running for office, you have reason to be concerned.  Very concerned!