Why Corporations Need Permanent Tax Cuts (Spoiler Alert:They Don’t)
By Jane Edwards
Corporations are people. This is so, because Chief Justice John Roberts, in 2010, hijacked a case that the court was hearing so that he could eliminate any law that prevented money from being used to influence legislation. Chief Justice Roberts, in his divine wisdom, joined by four other elitists on his court, conspired to breathe the breath of life into Corporation’s nostrils, and Corporation became a living person. OK. So, Corporations don’t actually have nostrils. Devil’s in the details.
Anyway, so, these – I’ll call them “Corpeople”- are now protected under the US Constitution. Just like you and me. Well, not exactly like you or me. Corpeople are not like you and me in the sense that they can fall in love, or have children. And, not in the sense that they need to feed their families and educate their children. Nor pay for housing. Nor do they worry about catastrophic disease or debilitation; or getting old and feeble. But, in every other essential way, they are persons with all the constitutional protections of any people.
People do have one advantage over Corpeople: Corpeople cannot cast ballots to send to congress a representative that will champion its interests. But Corpeople do not need to cast ballots. Corpeople have enough money to buy their very own representatives who will do the bidding of the Corpeople. That cancels out people’s vote. Instead of “One Person/One Vote”, we have “Mega-Dollar/One Legislator.”
Corpeople need a permanent tax cut because they need more money! That’s right. The CEOs of Corpeople may have to reduce their estimated $14 million in executive annual compensations they have come to know and love unless they get tax cuts.
Asheville’s biggest, most conspicuous Corpersons are embodied in the Walmart Supercenter and McDonalds. So, they have the dubious honor of serving as my case illustration in this post.
Corpeople need a permanent tax cut so they can raise the wages of workers! In the US, Corperson Walmart receives an estimated $6.2 billion in subsidies every year, primarily from the Federal Government, because Walmart pays its workers so little that thousands of Walmart employees are forced to rely on public assistance programs like food stamps, Medicaid and subsidized housing – programs funded by taxpayers.
Corperson Walmart, in FY 2016 reported a net income of $14.694 billion (Walmart actually generates almost $500 billion in revenue every year.) America’s biggest executive pay package in 2016 went to Marc Lore, the CEO of Walmart’s e-commerce division- an astounding $236.9 million dollar pay check. That’s about $4.5 million per week. But would Mr. Lore give some of that money back to the struggling, cash-strapped Corperson Walmart so the workers could get a raise in pay? Seriously.
Corperson McDonald’s, of fast food burgers, reported a net income of approximately $4.69 billion in 2016, while generating $24.62 billion in revenue. The CEO of McDonalds, Steve Easterbrook, received $7.91 million in salary in 2016. Plus, he’s given the use of the company’s corporate aircraft, an allowance for a company car, free financial planning services and other unspecified personal items totaling $224,235. Will giving McDonalds more money inspire them to raise their workers’ pay to $15 dollars an hour? Seriously?
Corpeople need a permanent tax cut, so the rest of us people will benefit in the long run! That’s right. The Corpeople windfall tax cuts will generate so much growth that they will pay for themselves. Even though the Corpeople tax cuts will add more than $1.5 trillion dollars to the federal debt in a decade, the rest of us won’t even notice it! Of course, when our tax cuts expire after ten years, we will be paying off the federal deficit.
Corpeople need a permanent tax cut so they can invest their profits in our country and hire more of us regular people! The Congressional Budget Office has recently released its analysis of the implications of the proposed tax cut. We already know it would increase our deficit by 1.5 trillion over a ten-year window. The supporters of the bill (Corpeople representatives) claim the tax cut will increase the economy’s output, and the increased taxes from that output would compensate for the reduced taxes of the pending bill. Not quite. Analysis of past tax cuts show that the economy does pick up, but the length and amount of growth are not guaranteed. In fact, George W’s 1986 tax cut produced little sustained growth. No previous tax cuts have increased the output to levels that Corpeople representatives are selling for this year’s bill. What’s worse, if the economy does not grow as predicted, the PAYGO law kicks in, and programs like Medicare, student loans, as well as those programs people other than Corpeople rely upon, will virtually disappear. Also, historically speaking, don’t be holding your breath for either that job or that raise.
Corpeople need tax cuts so they can invest in America! Not so much. Corpeople are far more engaged in so-called “tax efficiency.” We people call it “tax avoidance.” Corpeople have found that vigilantly shifting their extra cash around among foreign subsidiaries is a great way to pare down what they will have to pay the United States in taxes. There are no laws that force Corpeople to invest their extra revenue in America.
The fact is, Corpeople horde their wealth, and they invest it in the assets that will earn them even more money they can sock away. If they want to boost Corpeople revenues, they could invest in developing a new product or service, advertising, etc. However, most of their money is invested in other countries. They build factories in China, India, where people have minimal to no workers’ rights and are paid a fraction of poor-to-modest pay Americans receive.
Corpeople need tax cuts because lowering taxes increase the Gross Domestic Product (GDP)! OK. Sure. But it’s like this: Say you have 99 people and one Corperson in a room where the average income is $7,000.00. The government gives each person $100.00, and gives the Corperson $1,000,000.00. Now, the average income of the room is up by $10,999, reflecting in an increased GDP. However, only the Corperson, and nobody else, benefits in any substantial measure. That’s what tax cuts for the wealthy accomplish.
People like you and me also get tax cuts, but ours are not permanent, because, eventually, somebody has to pay for the additional 1.5 trillion dollars to the federal deficit the Corpeople tax cut will create. That would be us.
The Republicans are clever though. They anticipate that Americans are too dim-witted to understand that this tax cut for the Corpeople is a scam. So, they use statistics and suppositions without any basis to convince people if the wealthy have more money, then everyone is doing better. It’s just not true.
Bottom line: Giving tax cuts, subsidies, incentives, loopholes – whatever- to Corpeople is about as productive as tossing coins in a wishing well. You will never see those coins again, and they buy you nothing.
 PAYGO, stands for “pay-as-you-go” It is a budget rule requiring that tax cuts as well as increases in entitlement and other mandatory spending must be covered by tax increases or cuts in mandatory spending (using current law as the baseline).