The Daily Grasshopper

Only in America. There’s a headline on the front of the New York Times “Business Day” section from Friday, January 10 that reads: “Bush Offers a Break if Companies Pay Taxes.” You can read the whole article (it’s pretty short) right here:

What kind of “break” will these companies get if they pay their taxes? You guessed it – a tax break. For corporations that declare taxable income, the shareholders will receive a nice exemption. I’ve recently been accused of being a little too cynical, and I can see where people might get that impression. But when I read a story about the government offering tax breaks to people on the condition that they pay their taxes, I begin to wonder who the real cynics are.

The story is accompanied in the print version of the Times by a bar chart that shows “Corporate income tax receipts as a percentage of gross domestic product.” It starts in 1960 and goes through to today. For those of you without access to the chart, the line suggests, albeit on a slightly different timeline, the popularity of TV actor Gary Coleman – an early high, followed by a dramatic plunge, with a slight uptick in recent years, and clear indications of another plunge to far exceed the first. I think you know damn well what I’m talking about, Arnold. The website for Citizens for Tax Justice has a similar chart:

http://www.ctj.org/images/oecd1.gif

I’m sure the humorous portions of this column by Floyd Norris are unintentional. Take, for example, the opening paragraph:

“Once upon a time, the corporate income tax produced nearly a quarter of the federal government’s revenue. Over the years it was whittled away. Rates came down and companies found a host of ways, some authorized by Congress and some involving clever ways around the law, to avoid the tax.”

Earth to Floyd: The ways “authorized by Congress” WERE the “clever ways around the law.” You’re talking about six of one, half a dozen of the other. Apples and apples, Floyd. Big business has spent the last 30 years lobbying our elected officials to eliminate their “tax burden” so they can be more “competitive.” It’s been incredibly successful, as the chart in the New York Times indicates (to say nothing of corporate earnings reports). Another unintended knee-slapper from Norris: “For this to work, it needs to be loophole free.” Only in America.

For a good look at how corporations have succeeded in alleviating their tax burden (and creating loopholes in the tax code big enough to drive a battleship through), visit the Institute on Taxation and Economic Policy’s website:

http://www.ctj.org/itep/corp00pr.htm

A good summary article of the above report can be found here:

http://www.globalexchange.org/democracy/nyt102000.html

So, we see that we need to lessen the tax burden on our corporate friends. But when you turn to page C3 of the same section of the Times, there's another headline: “2 Airline Executives Say Industry Needs More U.S. Aid.” You see, competition is all well and good when you’re demanding tax breaks from Congress, but when you’re on the skids, as the airline industry seems to be, you need more “aid.” The full story is here:

http://www.nytimes.com/2003/01/10/business/10AIR.html

All right, then, is everyone clear? When poor people want a roof to put over their heads or food to put in their bellies, that’s called “welfare.” When corporations want a $4 billion (BILLION!!) handout to keep from going under, that’s called “additional financial assistance.” The word “additional” is there because the airlines were given $15 billion of federal money in the wake of the attacks on September 11th. You know, to keep them competitive. So, poor people have to fight for scarce resources like food and warm blankets, and airlines compete only to the extent that it’s profitable. When dark clouds loom for big businesses, they can always go to Congress with your hand out.

There’s a similar inconsistency that revolves around our trade policy. We insist, through a series of trade agreements, that other countries (by definition smaller and with less well-developed economies) should construct no barriers to trade. No tariffs, no preferential treatment for domestic producers, nothing. This is the fundamental principle behind “free trade.” Every country has to compete with every other country, without interference from local governments.

Like the idea of “competition” among U.S. corporations, the doctrine of “free trade” works well in theory, but is honored quite frequently in the breach. Right now, the North American Free Trade Agreement (NAFTA) is preparing to pry Mexico’s agricultural sector open, flooding that country with cheap American corn. For details, you can go to:

http://www.globalpolicy.org/globaliz/special/2002/0226corn.htm

Some of you may not be hitting the links I provide (just a guess), so I’ll give you the relevant paragraph:

“The facts are stark. Since NAFTA took effect eight years ago, imports of corn to Mexico from the United States have increased nearly eighteenfold, according to the United States Department of Agriculture. The imports will probably keep growing for the next six years as the final phases of NAFTA take effect. In the United States, corn growers receive billions of dollars a year in subsidies from Congress, much of it going to huge agribusiness operations. That policy fuels huge surpluses and pushes corn prices down.”

But when Brazil starts to produce really cheap steel, what does the U.S. do? Any guesses? That’s right. The U.S. cranks up tariffs to protect the local industry. What’s even more cynical is that this is a recent move, and most political observers think that Bush abandoned his dedication to “free trade” principles because the steel-producing states of Ohio, Pennsylvania, and West Virginia might be winnable for the GOP in 2004.

OK – to recap: corporations don’t have to pay taxes, but you do. If corporations DO pay taxes (forgoing the very attractive option of keeping a P.O. Box and a fax machine in some offshore tax haven in the Bahamas), then the shareholders get to write their dividends off. Foreign subsistence farmers have to abandon their crops to make way for the same crops coming from U.S. agribusiness (heavily subsidized). And if you’re a third world country with the resources to make cheap steel, but think you can get away with undercutting the U.S. market, you’ve got another thing coming.

As I said in a recent post, I have a low tolerance for bullshit. Can you see how some of these things might aggravate someone like me? There were those, in the wake of 9/11, who scratched their heads in earnest, wrung their hands in doubt, and asked “Why do they hate us?” I wasn’t among them. This country has great potential. The ideals that it was founded upon continue to inspire people around the globe. But our work is far from done, and the “leaders” we’ve elected continue to make me cynical. What can I say? I’m trying to be patriotic.