Posted on December 6, 2013 by dsalaborblogmoderator
by Dr. Jack Rasmus
In parts 1 and 2 of this series on how US corporations have succeeded in avoiding paying taxes, the focus has been on how corporations have avoided paying taxes at the US federal level and on their corporate income earned abroad. The US federal corporate tax has been in freefall for decades. Elsewhere globally, there has also been a ‘race to the bottom’ between countries to see who can cut corporate taxes the most and fastest. In addition to the US federal corporate tax freefall and the global corporate tax ‘race to the bottom’ between countries, there has been a freefall and ‘race to the bottom’ between the 50 states in the US as well that’s been going on for decades.
The following Part 3 therefore briefly examines this within the US corporate tax ‘race to the bottom’, as state legislatures have in recent decades between competing to offer more tax cuts to corporations (and even ‘reverse taxation’–i.e. direct subsidies, awards, and payments to corporations), in an increasing state level desperate effort to lure business headquarters from another state to their own. The outcome is that US Corporations now pay on average a mere 2% or so in effective taxes to the US states as a group.
This Part 3 concludes with a short list of priority proposals for reversing the ‘Great Corporate Tax Shift’, at the federal level in the US, between the US and other countries, and between the US states. (more…)
Filed under: Economy | Tagged: corporate tax shift, taxes | Leave a Comment »
Posted on December 2, 2013 by dsalaborblogmoderator
by Jack Rasmus
Corporate taxes in America have been in decline now for more than three decades. Contrary to the drumbeat of corporate media throughout this year, and their false claims that US corporations are paying far more than their foreign capitalist cousins, US corporations pay an effective (i.e. actual) tax rate of only about 16-17%. That’s a combined US federal, foreign states, and US states ‘effective’ tax rate, only 2.2% of which represents the ‘effective rate’ paid on offshore earnings today.
The rising crescendo of demands for still more tax cuts for corporations by virtually all Republicans in Congress, and a good number of Democrats as well, is being whipped up in a joint effort to push through an overhaul of the US tax code. The timing is apropos. Midterm 2014 Congressional elections are approaching, and politicians once again begun to solicit campaign spending ‘indulgences’ (aka campaign spending contributions) from their corporate friends.
The tax code overhaul idea is also timely, this writer has previously argued, given the still unresolved budget-debt ceiling debates. Those debates were kicked down the road this past October 2013 and are due to come to a head January-February 2014 once again. Should the Republicans decide to agree to any of Obama’s current ‘smoke & mirror’ proposals to reduce some showcase corporate tax loopholes, that token reduction will almost certainly be accompanied by lowering the corporate tax rate in exchange. Obama has already proposed to do just that, reducing the top corporate tax rate from 35% to 28%. So the political stage is well set to ‘slip in’ the corporate tax and tax code overhaul discussions into the upcoming debates. The tax code overhaul discussions need not necessarily reflect the entire code. It could prove a ‘tax code light’, focusing primarily on the corporate income tax. (more…)
Filed under: Economy | Tagged: Max Baucus, Taxation in the United States | 2 Comments »
Posted on November 29, 2013 by dsalaborblogmoderator
Down the Up Escalator: How the 99% Live in the Great Recession, by Barbara Garson. Random House, 2013. $26.95
Hundreds of “put a human face on the economic toll” stories appeared during the Great Recession. Many reporters chose middle-class protagonists—by which I mean, not working-class. They wrote about managers, professionals shocked by the notion that they could ever be let go, disoriented by their descent, stunned that no one wanted them.
That was the news: that not just working stiffs could get laid off. People like you, middle-class magazine reader, were not safe.
Some of Barbara Garson’s subjects are middle-class, too; a few are even rich; others are workers. They all had something before the 2008 recession—a job, a house, or savings—and they all lost that something. Down the Up Escalator is the story of how they coped—with their human faces, yes, and loss of face, and loss of nerve and unwarranted optimism.
But Garson also explains the whole securitized, derivatized implosion of the economy in a way that’s easy to follow and puts the blame where it belongs.
To publish in 2013 is a little late—others have done this explanation already—but if you were too shell-shocked to pay attention at the time, and if you want your economics leavened with an entertaining dose of humanity, Garson is your guide. (more…)
Filed under: Book Reviews, Economy | Tagged: 99 percent, Down the Up Escalator, Great Recession, How the 99% Live in the Great Recession | 2 Comments »
Posted on November 29, 2013 by dsalaborblogmoderator
by Dr. Jack Rasmus
The great corporate myth-making machine has been hard at work of late, attempting to create the false impression that US corporations are increasingly uncompetitive with their foreign rivals due to the fact they pay much higher corporate taxes in the US and abroad than their capitalist counterparts. But that is one of the great myths perpetrated by corporate apologists, pundits and their politician friends. The myth is high in the pantheon of conscious falsifications their marketing machines feed the American public, right up there along with such other false notions that ‘business tax cuts create jobs’, ‘free trade benefits everyone’, ‘income inequality is due to a worker’s own low productivity contribution’, ‘overpaid public workers are the cause of states’ budget deficits’, or that ‘social security and medicare are going broke’.
If corporate America can create and sell the idea that they pay more taxes than their offshore capitalist cousins, then they are half way home to getting their paid politicians to provide them still more corporate tax cuts—a proposal by the way that both Republicans and Obama are on record for, in their joint proposal to reduce the top corporate tax rate from 35% to 28% (Obama) or 25% (Republicans).
The message of too high corporate taxes is appearing more frequently nowadays, since actual legislation for big corporate tax cuts is now working its way through Congress. Driving the legislation are Teaparty favorites in the House of Representatives, like David Camp, head of the Ways & Means Committee, and Max Baucus, Democrat in the Senate, who is set to retire in 2014 and wants to give his business buddies yet another big cash freebie (you know Max, the guy who rode herd on that Health Insurance Corporation subsidy bill called Obamacare?). (more…)
Filed under: Economy | Tagged: Corporate tax, Multinational corporation | Leave a Comment »
Posted on November 22, 2013 by dsalaborblogmoderator
By Bruce Vail
Fracking operation in ND. Photo wikipedia creative commons
BALTIMORE—The continuing drama of organized labor’s conflict with the environmental movement, especially notable in the controversy surrounding the Keystone XL pipeline project, is readying for another round as a coalition of green groups launches a campaign to stop the proposed construction of a Maryland natural gas export terminal linked to increased fracking in the region.
The fight in Maryland was put into motion last year, when Richmond, Va.-based energy giant Dominion Resources Inc. suggested converting its existing liquefied natural gas (LNG) import terminal at Cove Point in Lusby, Md., to a much larger export terminal. According to Dominion, the rapid expansion of natural gas production inside the United States in recent years has all but eliminated the need to import LNG—by contrast, market demand to export the gas to places like India and Japan is expected to rise dramatically.
Dominion therefore proposed spending some $3.8 billion to modify the Cove Point terminal with construction of a new liquefaction plant, electricity-generating station and related facilities to handle the LNG exports. The U.S. Department of Energy gave its qualified approval for the project last month. (more…)
Filed under: Economy, Green Jobs/Green Economy | Tagged: AFL-CIO’s Building and Construction Trades Department, Chesapeake Climate Action Network, Communications Workers of America, D.C. Building and Construction Trades Council, Dominion Resources, Liquefied natural gas, Sierra Club, United Steelworkers, Washington | Leave a Comment »
Posted on November 19, 2013 by dsalaborblogmoderator
Members of the Aerospace Machinists union rejected a collective bargaining proposal, full of historic takeaways, by a margin of 2-1.
The employer is Boeing, a premier aerospace employer. Boeing, like many other large employers, uses its impressive political and economic power to extract gains from all of its stakeholders.
In 2003, Boeing extracted over $3.2 billion in tax incentives from the state legislature to “win” production of the new 787 airplane. Within a few years, the incentives were expanded, and modest accountability conditions disappeared from the incentive package. The win turned sour in 2007. Boeing opened a second 787 production line in South Carolina, sending a clear message that $3.2 billion buys less love than anyone thought.
In November 2013, Washington state tax incentive extended the tax incentive, reducing Boeing’s taxes by $8.7 Billion, out to 2040. This is far and away the biggest state tax incentive in American history. (more…)
Filed under: Economy, Strikes and work action | Tagged: 777x, 787, Aerospace Machinists, Boeing. New Normal, inequality, Lesser America, manufacturing, Tax Incentives | 1 Comment »
Posted on November 13, 2013 by dsalaborblogmoderator
We also recommend “The October Lesser Depression Jobs Picture: Grim No Matter How You Look at It” by Ron Baiman on DSA’s Democratic Left blog.
by Jack Rasmus
A first look at US third quarter 2013 GDP and October Jobs Reports gives the impression that the US economy is mending and might soon begin to recover. But a closer inspection shows that the reports indicate an economy still mired in a ‘stop-go’ trajectory at best and a jobs market able to produce low pay, often contingent service jobs. Moreover, trends within the reports suggest even the already tepid results in the reports will likely wane, once again, in the coming quarter and months. Here’s why. (more…)
Filed under: Economy | Tagged: jobs report, jobs reports, October 2013 jobs report | Leave a Comment »
Posted on November 6, 2013 by dsalaborblogmoderator
by Michael Hirsch
Review of The Unwinding: An Inner History of the New America by George Packer Farrar, Straus and Giroux, 2013
This American life is a mess, argues George Packer in The Unwinding: An Inner History of the New America. It’s a nation fraying, with core institutions from government and finance to housing, jobs and education dysfunctional or “unwound.”
Packer, as befits a New Yorker staff writer, is a sharp stylist with a keen eye. While he does pay homage to the American ideal of self-reinvention and upward mobility that existed imperfectly at best in the past, he focuses his seemingly infinite capacity for listening on bringing to life the stark inequalities of a society that is experiencing contrasts in wealth and poverty not seen since the late 19th century. It’s one in which billionaires and the homeless multiply while the proportion of middle-income families shrinks and where six of Sam Walton’s heirs have as much accumulated wealth as the United States’ bottom 30 percent.
His vision of an anomic, atomized America unfolds like a well-produced slideshow. Highlights include an insider’s view of K Street swinishness, its manufacturing of “grasstop” coalitions and how lobbyists on Capitol Hill not only grease politician’s palms but write legislation in the interest of no one but their own clients.
There’s also great reporting on the epidemic of robo-signing, mortgage and security fraud, bank failure, securities fraud and bankruptcy. His pointing to the collapse of federal regulations on bankers and traders that allowed for the Wall Street feeding frenzy is on target and a good introduction to the 2007-2008 collapse and its devastating consequences nationwide.
Taken singly, many of the chapters are brilliant, as is his coverage of the 2012 GOP convention and the ghost subdivisions and foreclosure wipeouts in Tampa, Florida. There’s Youngstown, Ohio’s shedding of 50,000 jobs (with a population of 150,000) and the vacating of 40 percent of its housing parcels in just 10 years. There’s also devastating takedowns of the gremlin-like Newt Gingrich, the preposterous Oprah Winfrey and the weaselly Robert Rubin matched with fitting portraits of new Massachusetts Senator Elizabeth Warren and writer Raymond Carver, named “the chronicler of blue-collar despair.” (more…)
Filed under: Book Reviews, Economy, Politics | Tagged: George Packer, The Unwinding | 1 Comment »
Posted on November 4, 2013 by dsalaborblogmoderator
by Gregory N. Heires
Nearly 70 years after President Franklin D. Roosevelt proposed that everyone has the right to a job with decent wage, his message continues to ring true as evidenced by a recent conference at Columbia University on full employment.
The economy of the 21st century remains mired in what seems to be an inescapable funk of unemployment and poorly paying jobs.
The Bush years flew by with a net jobs growth of virtually zero.
Our current employment outlook remains ugly:
• In September, unemployment was 7.3 percent, historically high for a period of recovery,
• Job growth was just 140,000 that month, significantly below what’s needed for a strong recovery,
• Wages have been flat for five years,
• A recent Wells Fargo survey found more than a third of Americans say they will have to work into their 80s because they won’t be able to afford to retire, and
• The labor participation rate—the percentage of people over 16 who either have a job or are seriously looking for one—fell to its lowest rate in 35 years in August. (more…)
Filed under: Economy | Tagged: Economy, full employment, jobs programs | Leave a Comment »
Posted on November 1, 2013 by dsalaborblogmoderator
by Stan Sorscher
The U.S. is negotiating two huge problematic trade agreements — one with Europe (TTIP), and another with countries around the Pacific (TTP). Both dramatically extend the NAFTA model.
First, I am 100 percent in favor of trade. Everyone I know wants good trade policies that raise living standards around the world. Equally, I oppose bad trade policies that weaken civil society and harm communities.
In simple terms, trade agreements are about trade — exports and imports. However, these trade agreements also serve as political, social, cultural and moral documents, which set political and social standards for countries and communities.
These trade agreements regulate countries in the same way that our Constitution regulates Congress, our courts, the president, and our state governments. However, the substance — the values — in our Constitution are very different from values expressed in trade agreements.
Our Constitution grants extensive political rights and social protections to people and communities. Our Constitution never mentions corporations — not once. (more…)
Filed under: Economy, Fair Trade, Politics | Tagged: TIPP, TPP | 1 Comment »