Mitchell’s laws: The more budgets are cut and taxes inceased, the weaker an economy becomes. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity = poverty and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
Somehow, I can’t bring myself to become accustomed to ignorance by the New York Times. I continue to expect more of them — or at least expect them to do a modicum of research, before writing editorials.
But again and again, they lazily repeat the same old myths, a few of which may have been only partially true before our move to Monetary Sovereignty on August 15, 1971.
Here they talk about corporate taxes.
New York Times editorial
Reform and Corporate Taxes
Published: February 22, 2012
The corporate tax system is a mess. The United States has one of the highest corporate tax rates in the world, but too many businesses still don’t contribute their fair share of revenue, in large part because of numerous loopholes, subsidies and other opportunities for tax avoidance.
What is a corporation’s “fair share” of taxes? How would one measure “fair share”? Let’s begin with the absolute fact that no tax system is “fair.”
Continue with the absolute fact that a so-called “loophole” is nothing more than a reduction in taxes. Business support of medical insurance is a “loophole.” All business expenses, which reduce profits, are “loopholes.” Medicare benefits are “loopholes.” Mortgage interest deductions are loopholes. Property tax reductions are “loopholes.” Do you really want to eliminate all “loopholes”? Or do you want to eliminate just the “loopholes” you personally don’t like?
Anyone who talks about eliminating “loopholes” is a liar and/or a fool. Keep that in mind.
Then let’s continue with the absolute fact that taxing the lifeblood of our economy – business – is as counter-productive as you can get. It’s like hobbling your horse in a race.
And finally end with the absolute fact that all federal taxes are unnecessary (They are not needed by the government) and harmful (They take money out of consumers’ pockets).
Add these absolute facts together and you get, “What the heck is the NY Times talking about”?
There is no doubt that a system that is more competitive, more efficient — the current mind-numbing complexity makes planning far too difficult — and more fair would be a plus for the economy.
Right, and there is no doubt a gun that actually doesn’t hurt the anybody, would be a plus for average lifespan. So?
President Obama’s framework for business tax reform, released on Wednesday, is a welcome start for a much-needed debate on comprehensive tax reform. But we already have two big concerns.
While the administration insists that business tax reform should not add to the deficit, the country needs to raise more revenue to care for an aging population, rebuild infrastructure, improve education and tackle the deficit. Corporations, which benefit from all of those, should, as a matter of necessity and fairness, pay more.
The administration is ignorant for not wanting to add to the “deficit” (i.e. the federally created money supply.) And the NY Times is ignorant for thinking taxes pay for Medicare, Social Security, infrastructure and education. When the ignorant comment about the actions of the ignorant, what do you get? Ignorance squared?
And as for “fairness,” is it fair for a corporation to pay taxes, then pay salaries and dividends with what is left over after taxes – and have those leftovers taxed, too?
Our other concern is that like all tax reform, the potential for gaming the process is ever present and unless it is vigilantly managed could actually reduce revenue and add to the deficit.
The NY Times understands that taking money from businesses and consumers could reduce profits and reduce future incomes, which (0h woe) would reduce future taxes. Better they should worry about what will happen to the economy, than to worry about “gaming the system” and the deficit.
Even if they made it past the lobbyists, the specific loophole closers in Mr. Obama’s new framework — including ending subsidies for oil and gas exploration, corporate jets and private equity partners — are far too small to make up for dropping the top (tax) rate.
So not only will closing loopholes hurt the economy, and be politically impossible, but they won’t even accomplish the stated goal of cutting taxes without increasing the deficit.
The framework’s call for a minimum corporate tax on the foreign earnings of American companies is a step in the right direction. Under current law, various tax provisions and tactics allow companies to reduce or defer taxes by shifting ever more production and profits overseas. But the idea is blunted by the framework’s failure to say what the minimum tax rate should be.
Surprise: All taxes have a bad effect on business. Bigger surprise: Businesses try to reduce this bad effect.
Last year, Dave Camp, the chairman of the House Ways and Means Committee, proposed a top corporate rate of 25 percent without saying how he would pay for the tax cut. Mitt Romney has done somewhat better, calling for a 25 percent rate to be coupled with “broadening” the corporate tax base, which generally means closing loopholes. But he has yet to say which tax breaks he would end.
Excuse me, but people pay for taxes; no one “pays for” a tax cut. And here’s the sneaky part. “Broadening” any tax base, corporate or personal, always means the same thing: Make the less wealthy, less profitable; small businesses and “small” people pay more. It’s another right wing, 1% attack on the 99%.
Serious reform requires specific proposals, tough trade-offs and hard numbers attached. Without all of those, this effort could too easily be hijacked by powerful corporations and their high-paid lobbyists.
The NY Times pretends not to want any government plans to be hijacked by the rich and powerful. Let’s face it. Corporations do not pay for anything. They simply transfer money from customers to employees, suppliers, shareholders and the government.
There is no magic to this transfer. The more money that goes to the government, the less will go to employees, suppliers and shareholders.
So what is our preference: Send more money to the government, which has no use for it, or send more money to shareholders and employees, who will spend and invest the money, thereby growing the economy?
Take your choice.
Rodger Malcolm Mitchell
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports