Ten Steps to Prosperity: Step 6. Eliminate federal taxes on business

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

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It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders.

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This is the sixth in the series of posts describing each of the Ten Steps to Prosperity, the previously described Steps being:

Eliminate Fica (1)
Federally funded Medicare and long-term care for everyone (2)
Monthly economic bonus for everyone (3)
Free education for everyone (4)
Salary for attending school (5)

Are these the words you would use to describe a “healthy economy”?

1. Business profits are high
2. Sales of goods and services are strong
3. Goods and services are plentiful and easily available
4. Unemployment is low
5. Salaries are high
6. Poverty is low
7. Homelessness is low
8. Everyone has access to good health care
9. The elderly and disabled are well cared for
10. The gap between the rich and the rest is narrow
11. Inflation is controlled
12. The stock market is rising
13. The infrastructure is well-maintained
14. Taxes are low
15. ________________________________

There may be other words you would use. If so, feel free to add them.

Now scroll down the list and tell me which items are positively affected by federal taxes on business.

Do federal business taxes help increase profits, sales, or the availability of goods and services? Of course not.

Do federal business taxes help reduce unemployment, increase salaries, or reduce poverty and homelessness? No way.

Do federal business taxes provide you with health care, protect the elderly, close the gap between the rich and the rest, control inflation or boost the stock market? Not in this world.

Do federal business taxes maintain the infrastructure or reduce other taxes? Certainly not.

So what the heck do federal business taxes accomplish?

The U.S. is Monetarily Sovereign.  It never runs short of its own sovereign currency. It neither needs nor uses tax dollars. Even if all federal tax collections fell to $0, the federal government could continue to spend, forever.

And surely, taking tax dollars from our businesses does not help them to be more competitive against foreign companies.

Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars).

Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce your personal income.

So again, what the heck do federal business taxes accomplish?

Clearly, federal business taxes act as a drag on economic growth.

We discussed the elimination of federal business taxes at New York Times parrots the same old myths about corporate taxes.  If you click the link you will see:

New York Times
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.

The Times speaks of a “fair share” of taxes. Does the Times want you to believe that taking more dollars from businesses somehow would be “fair” — that if only businesses had fewer dollars to spend, the economy would thrive?

Or does the Times want you to believe that if you had fewer dollars to spend, that would help the economy to grow? Either point would be ridiculous.

Because federal business taxes pay for nothing and negatively affect the economy, eliminating them should be a no-brainer. But there are two problems:

Problem I. What is a business?

A business is not a “thing.” A business is a system of laws. Businesses already have been given substantial tax benefits, and if taxes on businesses were completely eliminated, most Americans would declare themselves a business as a tax-saving device.

Of course, the federal government could tweak its tax laws to require businesses to have real business purposes, or use other devices to prevent everyone from converting to business status.

But, why?  The federal government has no need for federal tax income. The federal government creates dollars ad hoc, every time it pays a bill. And when you pay your federal taxes, those dollars instantly disappear from the money supply. They effectively are destroyed.

The elimination or dramatic reduction of all federal taxes would be a very good thing for the U.S. economy. You would retain more money to spend and save, and businesses would retain more money to invest and to pay in salaries and dividends to shareholders. It would be a “win, win, win, win, win” for you and for the entire economy.

So why not? Here’s why:

Problem II. The Public Has Been Brainwashed by the Rich

The primary goal of the rich is to widen the Gap between them and the rest of us. The Gap is what makes them rich. Without the Gap, no one would be rich (We all would be the same), and the wider the Gap, the richer they are.

And the rich run America.

Most federal deficit spending benefits the non-rich. It narrows the Gap, so the rich promulgate the myth that federal finances are like personal finances, with income being necessary to pay for spending.

But, the federal government neither needs nor uses income. It is a money machine.

Nevertheless, the rich opt for taxes, but not any taxes. The rich want regressive taxes like income taxes, sales taxes and FICA, all of which punish the non-rich and so, widen the Gap.

One innocently might think that business taxes have more effect on the rich, but in fact, businesses provide the rich with many opportunities for tax deductions. (You can’t deduct for your meals, travel expenses, living expenses, educational expenses, etc., but business owners and executives can.)

Most importantly,  collecting business taxes supports the myth that federal taxes actually pay for something.  

They don’t.

The rich are concerned that if businesses didn’t pay taxes, you would complain that this isn’t “fair,” or worse yet, begin to realize that federal taxes are unnecessary. Then, you might demand that personal taxes be eliminated, too.

That would narrow the Gap, making the rich less rich, and depriving them of their large supply of underpaid servants. (Yes, sorry. That’s you.)

The rich pay propaganda organizations like the Committee for a Responsible Federal Budget (CRFB), pay the politicians, pay the media, and pay the university economists to promulgate such nonsense as “There is no such thing as a free lunch,” and federal deficits are “unsustainable,” and the federal debt is “a ticking time bomb,” and “money printing” will cause a hyperinflation like Zimbabwe” — none of which is true.

The idea is to convince you that federal taxes are necessary, in short, “the Big Lie,” so you will believe there isn’t enough money available for the social spending that benefits you. (That is why you will see fake scare articles telling you that Social Security and Medicare are insolvent.)

The rich want you to struggle day-to-day, worrying about how you will pay for your children and for your own old age, desperate and begging for any handouts from the rich. Meanwhile, the rich who own you, laugh all the way to the bank.

So yes, business taxes should be eliminated, and yes, it would greatly benefit you.

But the rich are afraid that will wake you up to the fact that all federal taxes could be eliminated, which would narrow the Gap — something the rich loathe.

Rodger Malcolm Mitchell
Monetary Sovereignty

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The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Guaranteed Income)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE Five reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and corporate taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.

MONETARY SOVEREIGNTY