Tax Cuts for the Wealthy

       Supply siders will have us believe that tax cuts for the wealthy act as an economic stimulus. They do not. The reason for this is simple: unlike water, money flows uphill. No matter where money is injected into the economic system, it flows upward to the top.
       The purported theory behind giving tax breaks to the wealthy is that they will use the money to create jobs. President Bush has even called his tax cuts a jobs package. But that's mere sloganeering to hide the reality. Let me ask: who ramps up production in the absence of increased demand? No one. This is so obvious it's amazing that anyone falls for the jobs-package line of bull. Who hires extra help, especially in the absence of increased demand? Obviously, no one.
       What is one to do with such a windfall - assuming one is wealthy ewnough to receive one? Invest in something that pays dividends, perhaps, since taxes have been reduced or eliminated on such investments. But all the exchanges of stock by traders and investors do nothing to boost the kind of economic activity on which people's livelihoods depend. Demand-side stimulus is the only way to achieve the necessary momentum. I know I wouldn't hire extra help until demand picked up significantly and forecasts were for more increased demand.
       What does it take to boost demand? Simple, put the money in the hands of the working class. They will spend it! The $300 crumb Bush grudgingly tossed to the contemptible masses is a huge insult and is not a real tax cut. Bush adds injury to the insult by scooping out huge rebates for the wealthy.
       Everyone who got that $300 tax rebate immediately spent it, so whatever economic stimulus ensued was very short lived, perhaps a week or two - probably less than the margin of error of any system that could measure it. What if the majority of the tax cut dollars went to the working class? Imagine an extra hundred or two in every paycheck. Week after week, month after month. Now that that would be a stimulus.
       Here's a radical idea. Why not exempt the first, say, $20,000 or $25,000 of wages and salaries from tax. What do you suppose would happen with that money. It would be spent! It would be injected into the economy at the consumer level, greatly stimulating demand for goods and services. Companies would have to ramp up production and begin hiring additional workers. The economy would buzz. And all that money would trickle uphill as it always does, making the rich even richer. And that's the point, really. No matter where you inject the money, the rich get richer. Why not inject it at the bottom so that everyone benefits, not just the wealthy folks at the top?

Corporate Power

       Corporate power is getting out of hand and part of the problem is this thing called media consolidation. [The Fresh Toad will go on about lobbyists another day.] We’ve got a handful of individuals and corporations with right-wing agendas buying up media properties and slanting the reportage and editorialization such that there remain fewer and fewer unbiased sources of news and opinion for an ever more jaded populace to pick from.
       Now, bad reportage, slanted news and the like is nothing new. What is new is the ownership consolidation that has been allowed to take place. This directly threatens the American way of life because it invests way too much power in the hands of way too few. Witness how people have (apparently) completely forgotten the difficult times that America has endured, times that led to legal and societal reforms that protect people.
       Reforms like clean water, breathable air, insured bank deposits, worker safety. Each of those societal advances was opposed by conservatives of the time, yet consolidation of media power by conservatives is what people are expected to accept now even though it reduces the diversity of information available and threatens further advances in living quality for all people, not just the rich. It makes no sense, unless you favor investing more political power in the corporation.
       I’m not saying we should be all liberal all the time. Conservatism makes a good balance for liberalism because in its true form it keeps a lid on government, discourages squandering, does not reward idleness, encourages economic risk-taking for gain, and provides incentives for creativity. But being all conservative all the time is extremely dangerous to society. And when conservatism is used to make either government or corporations more powerful, everyone needs to be concerned.
       What will it take to free the media from the bondage it suffers from? How will people come to realize, for example, that the claim of “compassionate conservatism” is purely a slogan and not based in fact? It won’t happen if the media won’t call anyone on it. The press is one of only two businesses enshrined with specific protection in the U.S. Constitution (the other being religion). But unless the media actually use that power to inform rather than dupe the public, we will be in danger, as a society, of going down the tubes. The American experiment can fail if we allow it to.
       Why is this so? It is so because of the nature of the corporation and the lack of oversight corporations enjoy. To whom is the corporate board responsible? To the community? No. To the society? No. To the shareholder? Yes. Only to the shareholder. The corporate raison d’être is the enrichment the shareholder. Period. When a decision has to be made, it is made in light of the bottom line, not in light of what’s best for the ecology or the community or the workers. This is understandable based on for whom the corporate bells ring: They ring for the shareholder – the investor.
       However, when it comes to environmental quality or worker safety, to name just two areas of corporate impact, the bottom-line mentality discounts these because paying attention to them adversely affects profitability. Therefore, regulation by the government is necessary. It is right and just and proper and here’s why: corporations are artificial, privileged entities that exist only through government franchise. They are therefore properly the object of regulation and subject to taxation. Corporations should, sensibly, not enjoy the same rights as natural persons.
       At the founding of the United States, the American people, acting through their elected representatives, created the federal government, delegating to the government certain limited powers, reserving to themselves all powers not delegated. Is it reasonable to imagine that the government could then create an artificial person with the same rights as, or greater rights than, a natural-born citizen? It would be logically impossible: A thing cannot create another thing equal to or more powerful than the thing that created itself. That would be like humans designing a robot more powerful than God. Ludicrous idea. But this is what has been allowed to happen in the corporate world.
       The Supreme Court, making use of the 14th Amendment late in the 19th Century, rendered the opinion that for legal purposes the corporation is a person, albeit an artificial one. This was convenient and solved a legal problem that was getting troublesome, but the court did not delineate any limitations to the concept of the corporation as a person. This left people with the idea that corporations have rights, just like natural persons do. That notion opened the door to the ever widening corporate abuse of power, which now threatens our way of life.
       By definition, the corporation is a privileged entity. Its officers and directors enjoy immunity from prosecution for their mistakes and immunity from personal liability for losses suffered by the company and it shareholders. This amounts to considerable privilege. Such an entity is rightly taxed for the exercise of such privilege. This principle is well established legally. Rights, on the other hand, are not taxable, else they would not be rights since, as the Supreme Court has stated, the power to tax is the power to regulate.
       Therefore, it is the duty of government to regulate and to tax corporate activity. Yet the Congress seen fit to give hundreds of billions in tax breaks to corporations even as the EPA rolls back environmental restrictions on them, even as the tax burden of working citizens is not relieved.
       Because corporations, especially large corporations, are able to amass huge monetary resources, they are able to wield extraordinary power. When that power is used to coerce government, society suffers. As long as corporate money can be used to grease the wheels of government, the notion of government of, by, and for the people is an illusion. Instead, we have government of, by, and for the corporation, which is really nothing less than fascism - with a small f, but fascism nonetheless.
       Harsh words, perhaps, but true. If political power is allowed to reside in entities that have no other driving force than their own bottom lines, there is no hope whatsoever for the citizenry or the environment, since government protection will devolve to the corporation, government’s benefactor. This situation must be redressed.
       How can that be accomplished? Not easily, unless and until that 19th-Century mistake on the part of our Supreme Court is reversed. Even that may not be enough. A constitutional amendment to prohibit corporate lobbying would be a step in the right direction. As the system works now, corporate lobbyists write legislation, something akin to putting the foxes in charge of the henhouse. How could anyone imagine that the product of such an arrangement could be beneficial for any but the corporations themselves and their bought-and-paid-for government toadies?
       A careful look at the drug reimportation issue should provide all the proof anyone needs to recognize the perversion of corporate power that is taking over America: Government wants to prevent granny from buying the identical drugs at half the cost in Canada for no reason other than the protection of corporate profits. When the government cites consumer safety as the overriding concern, such nonsense insults Canadians and Americans both, as if Canadians were suffering from bad pharmaceuticals that were manufactured in the US!
       So, where is a statesman when we need one? Who will sound the alarm? Has everyone gone deaf and dumb? America is only in its adolescence as the oldest constitutional democracy on the planet, but already it is at the crossroads, while the dumbing down of our once-resourceful population of rugged individualists has made it almost a certainty that no one will notice if we take the wrong turn.
       All for greed. Another hundred billion in the pockets of the already-rich. Screw the working stiff. Tax the wage earners! A free ride for those who don’t need one! What a legacy!
       Shhh, shhh, shhh, there’s a new “reality” show coming on!
       No wonder the rest of the world thinks we’re mad. We are.