●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which leads to civil disorder.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The penalty for ignorance is slavery.
●Everything in economics devolves to motive.
The Citizens for Tax Justice, published an article titled, Ten (of Many) Reasons Why We Need Corporate Tax Reform, in which they list ten large coporations that paid no, or almost no, federal taxes 2008-2012.
The article dated April 12th, 2013, by Jason Sattler, related this shocking story:
You may not believe this, but once upon a time even big corporations paid taxes.
Citizens for Tax Justice (CTJ) has a new study of Fortune 500 companies that illuminates how the nation’s largest corporations are able to corrupt our broken tax system to pay nothing — sometimes literally less than nothing — in taxes.
Facebook, for instance, used one simple tax break — writing off executive stock options — to pay no taxes in 2012 and offset its future taxes.
The article lists other companies such as Fed Ex, Pepco, Ryder, Apache and Interpublic, all of which paid zero income taxes in the past five years. Less, than zero, really, because they all have tax credits going forward, so probably will continue to pay zero taxes.
Shocking. But, that’s not the myth. That’s probably real. Here’s the myth:
CTJ cites U.S. senator Carl Levin (D-MI), who estimates that this tax break costs taxpayers between $12 billion and $61 billion a year.
Like every other senator, every representative, the President, the Chairman of the Fed, the Secretary of the Treasury and the Counsel of Economic Advisers, Senator Levin claims that federal tax breaks cost us taxpayers money.
And that Big Lie, that taxpayer myth, is at the heart of the austerity poison we are being force-fed.
You, Mr., Mrs. and Ms. Taxpayer do not pay for federal spending, and tax breaks for your neighbor or General Electric do not cost you one penny. In actual fact, these tax breaks put dollars into your pocket.
Here is how the experts fool you: Your city, county and state governments are what’s called,“monetarily non-sovereign.” They don’t use their own sovereign currency. They use the U.S. dollar.
They can’t arbitrarily create dollars. In fact, they can and often do, run short of dollars. So they need to collect dollars from you, to pay their bills. The collected dollars are called “taxes,” and if your neighbor doesn’t pay taxes, you’ll have to pay more, to make up the difference.
By contrast, the U.S. government is what’s called “Monetarily Sovereign.” It not only uses its own currency, but it arbitrarily creates all the dollars it wants, whenever it wants. The U.S. never can run short of dollars.
That’s why the U.S. government never needs to ask anyone for dollars. It doesn’t need to borrow (though it borrows) and it doesn’t need to tax (though it taxes). Why?
You’ll repeatedly hear and read several platitudes relative to the taxpayer myth. They explain why it persists in the face of overwhelming evidence to the contrary. Here are a few, with their counter comment:
1. Taxpayers pay for federal spending. (Nope. Taxepayers pay for state and local spending, but the federal government creates the dollars it spends. That is the difference between Monetary Sovereignty and monetary non-sovereignty.)
2. We just can’t keep printing money forever.
3. Everyone says the federal debt and deficit are “unsustainable,” so it must be true.
(“Unsustainable” would mean we’d run out of dollars, which we cannot.)
4. Being in “debt” is bad for me, so it must be bad for the government.
(Debt is no problem for a government that has the unlimited ability to create dollars. But “taxes” are bad for you who doesn’t have this ability.)
5. We have to live within our means.
(We do live within our means. Our “means” is the government’s unlimited ability to create the dollars to pay its debts.)
6. Our grandchildren will have to pay the federal debt.
(Our grandchildren don’t owe the debt, although they do own most of it. Being creditors, not debtors, they receive interest payments on the debt.)
7. I am the government; if the government is in debt, I am in debt.
(You are not the government. You pay taxes; the government collects taxes. You can run short of dollars; the government cannot.)
8. If we print too much money we’ll have inflation, like the Weimar Republic
(The Weimar Republic was forced into hyperinflation by post-WWI reparations, which had to be paid in gold or product — nothing like the U.S. situation. U.S. inflation has not been caused by federal spending, but rather by oil prices. Because the U.S. government is sovereign over the dollar, it can set the value of the dollar at any level it wishes.)
The CTJ continues with its taxpayer myth:
Corporate Tax Reform Should Repeal Tax Loopholes and Restore Overall Corporate Tax Revenues to a More Reasonable Level
The tax breaks that have allowed these companies to be so successful in their tax avoidance are, by and large, perfectly legal, and often have been on the books for decades.
Actually, the tax “breaks” have helped these companies to be successful. Successful companies hire people, pay salaries and are more competitive with foreign companies. Successful companies buy goods and services, helping other companies. Why, in heaven’s name, would we want business to be less successful?
As Congress focuses on strategies for revamping the U.S. corporate income tax, a sensible starting point should be to critically assess the costs of each of these tax breaks, and to take steps to ensure that profitable corporations pay their fair share of the U.S. taxes.
“Assess costs” to whom? Not to you; not to me. If GE doesn’t pay taxes, it doesn’t take one dollar out of our pockets. In fact, GE’s spending on goods, services and payroll puts dollars into our pockets.
The next step is as, if not more, important. The revenues raised from eliminating corporate tax subsidies should not be given right back to corporations in the form of tax-rate reductions, as corporate lobbyists and their allies inside the Washington Beltway preposterously argue.
Apparently, the Citizens for Tax Justice consider business to be the enemy of the economy, so money should be taken from business and given to the govnerment. Talk about “preposterous”!
Instead, as the vast majority of Americans understand, these desperately needed revenues should be used to address our nation’s fiscal problems and to make critically needed public investments in our nation’s future.
In one sentence, the taxpayer myth is repeated five times — perhaps a new world’s record:
“. . . vast majority of Americans understand . . . ” is a version of “everyone says” (#3)
“. . . desperately needed revenues. . . ” is part of “live within our means” (#5)
” . . . should be used . . .” is part of “taxepayers pay for federal spending” (#1)
” . . . our nation’s fiscal problems . . .” probably is part of “Weimar Republic” (#8)
and ” . . . critically needed public investments . . . also is part of “taxepayers pay for federal spending” (#1)
In short, the Citizens for Tax Justice is clueless about the difference between Monetary Sovereignty and monetary non-sovereignty. What they say about taxes applies only to state, county and city taxes (and to euro-nation taxes), but not to federal taxes.
How could a group that claims to “fulfill its mission primarily by producing research on tax issues and analyses of legislative proposals” get it so wrong?
Maybe you should ask them:
Email to CTJ: email@example.com
Annie Singer, Communications Director
Phone: (202) 299-1066 ext. 27
Email to Anne: firstname.lastname@example.org
Citizens for Tax Justice
1616 P Street NW
Washington, DC 20036
Fax: (202) 299-1065
Rodger Malcolm Mitchell
Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America’s 99%
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 Imports