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The Tax and Spend Spectator
The Left Surrenders!
Liberals finally recognize the need to slash corporate taxes. This is a moral victory for conservatives everywhere.
Liberals’ agreement on the need to cut corporate taxes represents a major conservative victory. They are finally confessing to the negative impact of taxes. The need to create new jobs in this country is actually taking precedent over their age-old ideology. Even more importantly, it will be hard for the Left to get their ideology back on its feet again for the next tax fight.
The Left’s rehabilitation of corporations is entirely new. For decades, corporations were the Left’s ultimate villains. Just as corporations are constructs of the legal code, so they became fantasy constructs of liberals.
Corporations served the Left’s goal of putting an evil face on American capitalism. That’s a tough task in America, where virtually everyone is a capitalist. Farmers, small businessmen and women, the middle class, even the working class — Marxists’ beloved “proletariat” — in America are all imbued with the capitalist spirit. Those who aren’t rich want to get rich — and what’s worse, they have the audacity to believe they can.
So rather than find an icon they could hallow, the Left found one they could hate. The Corporation fit the bill. In the liberal caricature, The Corporation took America into wars — profiting on the conflict and then redoubling it in the aftermath. The Corporation was apolitical and “anational,” with no loyalty except to profit. It was pure evil.
It was also pure fiction. But it was the Left’s reality and, like anyone’s reality, it was real to them. So altering it now — even if to merely rejoin everyone else’s — is still a dramatic change.
What happened? Most importantly, the Great Recession. Just as the 1970s’ stagflation destroyed Keynesianism, today’s slow and jobless growth has necessitated liberals’ return to non-ideological basics. For the Left, necessity is not only the mother of invention, but of revision as well.
Most of our competitors have lower corporate tax rates and greater economic growth, so America’s leading growth export — jobs — was bound to attract attention. If U.S. jobs were going to be retained, much less increased, the Left had no choice but to begrudgingly confess that America had to compete. Even if that meant accepting a lower corporate tax rate.
Today, no one is talking about raising corporate taxes. Even those who abhor what they see as “tax flight” abroad, recognize that a lower domestic rate is needed to reduce the incentive to leave. This is especially true when virtually every other nation’s tax rate makes them look like a tax haven in comparison to the U.S.
It is an axiomatic truth: the surest way to get less of something is to tax it. While liberals may not have gone so far as to embrace the obvious, at least they have had to admit the reverse: if you want more of something, reduce the taxes on it.
So now liberals have finally admitted that heavily taxing corporations bears negative economic consequences. Where do they go from here? How do they engage in their next tax fight. They will still have to push for tax hikes to bankroll their spending, but now they will be pushing from a compromised position.
They can seek to play the “good cop” — saying that they do not really want higher taxes, but that necessity demands them.
Or they can argue that higher taxes are a necessary means to an end — that they are needed to reduce income inequality. But that means implicitly admitting that having fewer wealthy people around would be a good thing, and the Left — let’s face it — needs as many rich people as possible to bankroll its spending.
Liberals will have to devise some explanation. Because taxes can’t be a negative on business and a positive somewhere else.
In boxing vernacular, the Left finds the ring being “cut down” — they have less room to run. And to paraphrase the great Joe Louis, increasingly they are discovering that they can’t hide either. As much as they deplore it, they are coming close to acknowledging that reducing spending is the only viable strategy for fiscal success.
Until liberals actually agree to cut those taxes,
conservatives’ and America’s victory is only a moral one. But in
today’s Washington, you take what you can get.
About the Author
J.T. Young served in the Department of Treasury and the Office of Management and Budget from 2001 to 2004 and as a Congressional staff member from 1987 to 2000.
Letter to the Editor View all comments (38) | Leave a comment
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Bill Hussein O'Stalin| 7.25.11 @ 7:26AM
Taxes are only a small portion of the problem anymore.
Each person you hire has a myriad of rights concerning health care, gender and race. Each one of those issues contains dozens of trip wires which could blow up in the face of a small business at anytime.
There is an army of attorneys just sitting around cooking up new ways to attack the business class. The Wal-Mart women who claimed they weren't making enough in minimum skill jobs is but one example.
There's very little reason to create a job in the USA at this point.
The government controlled schools churn out the equivalent of defective product. The government controlled banks won't lend money. The government controlled auto makers are churning out defective products. And so on and so forth.
The only thing that will bring jobs back to America is real tort reform followed by regulatory reform. Taxes are only a small part of the equation.
In the meantime, central economic planning will continue to destroy one of the best economies in the world.
Occam's Tool| 7.25.11 @ 10:48AM
Co0rrect as usual, Bill. Beautifully put.
Occtapussy's Tool| 7.25.11 @ 2:10PM
You da man, Bill ! Beautiful putt.
Fore !
Cosmo| 7.25.11 @ 5:55PM
In your dreams....It's the Republicans who have surrendered time and again...With the 2010 CR they passed the Democrat budget for another year. Now they are about to raise the debt ceiling with no real spending cuts....The country will never get any place until we have a new speaker
and Senate Republican leader...
skip| 7.25.11 @ 7:53PM
The House is Republican.
The Senate is Democrat.
The White House is Democrat.
Bills pass the House. Then the Senate. Then the White House.
Do you concede Boehner and McConnell might be a tad more effective if 'the country' pulls its collective head out of its anal orifice and gives them some help next election?
They are both performing as well as can be expected to date.
Quartermaster| 7.26.11 @ 6:31PM
Boehner and McConnell are actually in the driver's seat, and both of them are acting squishy, as though they have to play nice with the Dems.
Alas, both are looking for ways to surrender because, in reality, they are as much part of the ruling class that has been taxing, spending and electing since FDR started cheating the country in 1933.
If the voters were to pull their heads from the 4th point of contact, they'd send both of those squishes home to stay.
skip| 7.26.11 @ 7:46PM
I reserve judgment on that until after a resolution on this debt ceiling circus at least.
Their talking points seem to be aimed at the idiots polled who blame republicans more than the petulant dithering fecal idiot liar in chief, and with an eye toward next year's election.
I still expect them to force the petulant dithering fecal idiot liar in chief's hand, to call his pathetic bluff.
I want a shut down. For the remainder of the calendar year at a minimum.
Government spending 57% of what they are now, which is what will happen since they will no longer be able to spend the 43% they currently borrow, is just what the doctor ordered.
Gary B| 7.25.11 @ 7:46AM
It's a little too early for a victory dance, isn't it? I'm wondering what world the author is living in.
He said, "Just as the 1970s' stagflation destroyed Keynesianism, today's slow and jobless growth has necessitated liberals' return to non-ideological basics."
You could have fooled me. This is the most ideological administration in recent history. Their religion is tax and spend our way to prosperity.
And, just as Clinton downgraded morality in our society by telegraphing to our youth that oral sex was cool, so Obama has cleared the way for the MSM to come out of their ideological closet with blatant bias.
There is still a long battle ahead with the 45% of our country that is still drinking the free-lunch Kool Aid.
Ken (Old Texican)| 7.25.11 @ 7:56AM
JT,
You better chuck those rose colored glasses, oaf.
We have a war on our hands, and traitors for governors.
Occam's Tool| 7.25.11 @ 10:47AM
Ken,
you are too optimistic. Stay awesome.
Ken (Old Texican)| 7.25.11 @ 1:02PM
Doctor,
this guy, Young, has a terminal case of "Pollyanna".
The sharks are circling, folks. Get prepared. Please. I would like to visit with you "on the other side".
POST American| 7.25.11 @ 8:02AM
-----'90's Show' complacency op ALERT!----
NOW, back to that unmentioned 1.5 QUADRILLION in FAKE derivatives debt
-and the scandalous TAX FREE status of the
agenda making, funding and directing,
ultra-rich, frankly and openly TREASONOUS,
'benny violent' Rockefeller et al foundations.
JimP| 7.25.11 @ 8:37AM
"...1970s' stagflation destroyed Keynesianism,..."
Well not quite since Obama and the Dems with their stimulus etc. But I agree with your point overall.
Pecos Pete| 7.25.11 @ 8:59AM
Most readers of TAS know that corporations don't pay taxes, they simply act as a tax collector for government. Only people actually pay taxes. The problem is that most people in the USA believe that corporations do and should/must pay taxes.
I know it can't be done, but eliminate the income tax on corporations ... which is nothing more than a tariff ... and then the USA automatically becomes the world's low cost producer of goods and services. The simple act of eliminating income taxes on corporations would cause an economic revolution benefiting all levels of personal income in the USA.
Call it the industrial revolution of the 21st century.
Frekki| 7.25.11 @ 11:03AM
Nice idea, but the left would hang their children before they would allow it.
Kevin Compton| 7.25.11 @ 1:15PM
The "left" are already hanging their children, grand-children, great grand-children etc. and everyone else's as well.
TrueBlue| 7.25.11 @ 1:26PM
There's a reason that there is nothing in the Constitution that mentions the government collecting taxes on income, only on imports/exports. The Founders realized taxes only made things worse so they specifically listed things that would prevent the federal government from getting too big by keeping its tax-generated income low. The 16th Amendment screwed that one all up, it's no wonder the Great Depression occured less than 20 years later.
John| 7.25.11 @ 9:58AM
It's a little too early for a victory dance, isn't it? I'm wondering what world the author is living in.
http://www.summer-products.com
http://www.honey-gifts.com
George True| 7.25.11 @ 11:24PM
Gee John, if that's your real name, I couldn't help but notice that your "comment" was actually a comment from a previous post followed by links to some website selling cheap junk that even if someone were dumb enough to order something off of it, the stuff would probably never be delivered.
Maybe you are some huckster from Nigeria or Malaysia. In any case it is obvious that you are too much of a moron to realize that nobody here is stupid enough to actually bite. By the way, are you related the the sexy, young female doctor who comes here posting an ad saying she is looking for an older guy? Because your ad is stupid beyond belief in exactly the same way that hers is.
Jessie| 7.25.11 @ 9:59AM
http://www.jerseys-hats-store.com
http://www.ainibag.com
The only thing that will bring jobs back to America is real tort reform followed by regulatory reform.
George True| 7.25.11 @ 11:26PM
Hi, Jessie (if that's your real name). You must be the moron sister of John from the previous comment.
Chef Schnauzer| 7.25.11 @ 10:02AM
Geez, I make every effort to wipe that pathetic psudo-conservative Dubbya Bush out of my mind - seems to me his spend every nickle like a drunken Kennedy and TARP approach to the banksters negate your whole ill though premise, '1970s' stagflation destroyed Keynesianism'
axbucxdu| 7.25.11 @ 1:06PM
Tasty cuisine there, Chef. So Keynes was destroyed when demo Retread Nixon closed the gold window. Hell, he improved its fuel injection so successfully that it took the wrecklessness of the current Keynesian-in-chief's foot on the pedal to blow it up, only, like, forty years later.
Frekki| 7.25.11 @ 11:04AM
I thought only Congress had the power of the purse.
Al Adab| 7.25.11 @ 11:04AM
All taxes, especially those on business (who as Pecos notes only collect them) are dangerously regressive. The more a government extracts from the economy, the more damge is done. It is only a strong and growing economy which can support heavy tax rates. It is a good sign that even this "moral victory" is ours. Time to move to the next level and make it a real one. Freedom marches on.
Margie| 7.25.11 @ 2:40PM
It is encouraging, isn't it?!
Praise God for our Republican leaders. They didn't back down this time.
I know things are bleak in this World, but there is yet still a glimmer of hope.
It's the Left who believes that it's OK to steal other people's money, and even try and claim the Words of Christ in doing so.
Prayer and hard work and continuing to let our party know what we want is coming to fruition.
I suggest we all send Speaker Boehner a letter of encouragement to continue taking a stand for us.
I know how personal encouragement works!
Al Adab| 7.25.11 @ 3:57PM
"If my people who are called by my name..."
Yes Margie we have a small victory, one small step for Liberty. It is a waystation on the road to restoring our national economic strength.
Mike 3/505| 7.25.11 @ 12:01PM
Pecos,
You are correct. The way the tax system is set up now, corporations just collect for the government. The consumers actually pay. While I am not a fan of taxes, they are necessary and everyone should pay their share.
There is a way to collect tax on corporate taxes with what I believe less negative impact on the corporations. We need to tax corporate profits where/when they are actually realized...when dividends are paid. And tax those dividends as income. That way, corporations can wit old a portion of their profits to fund expansion, hiring, R&D or whatever. Whatever is left that they distribute to the shareholders is what gets taxed.
Another advantage of this is that the army of IRS auditors can be severely diminished as they won't be required to go over corporate books.
TrueBlue| 7.25.11 @ 1:29PM
Yea, let's do that... then the government can get even more income by taxing those dividends when the shareholders receive it as income... oh wait, they already DO. That's why the corporations keep raising prices on their goods, to increase the amount paid to shareholders in order to make up what the government takes away in taxes.
The entire 16th Amendment needs to go.
Mike 3/505| 7.25.11 @ 1:34PM
True,
I agree...the only place the profits should be taxed is at the dividend point. Else it's double taxation on the same profit...
Regards,
Mike
Ken (Old Texican)| 7.25.11 @ 1:07PM
Mike,
obviously you own no stocks...particularly stocks in young growing, (high risk-hi gain), companies.
Knothead, under this administration NOBODY makes a decent profit, or if they do, the admin wants to take it from their investors.
Very very stupid...or evil...pick your descriptor.
Mike 3/505| 7.25.11 @ 1:30PM
Ken,
I owns some...not a lot of stocks.... I get some dividends...pretty small.
Help me understand why my proposal wouldn't work. I've been reading your work...here and just recently your book and I would have thought you'd be the first to jump on this. My proposal would necessarily include a flat tax and no gimmicks such as bringing forward expenses such as depreciation. Help me out here partner. From what I see it would be a win, win and bring the hidden tax on the consumer out in the open.
Regards,
Mike
Mike 3/505| 7.25.11 @ 1:49PM
Ken & True,
Thisnis to clarify....my proposal assumes that income tax continues, but it is modified to be a flat tax. I'm personally OK with an income tax, as long as everyone pays and everyone pays the same rate. No deductions, no gimmicks.
If folks wish to include a "floor" beneath which those folks don't pay tax...I could live with that....if those folks had NO say in how tax revenues get spent. When 47 percent of the population pays no tax but get to help decide how the revenues get spent....well that is fundamentally wrong.
Quartermaster| 7.26.11 @ 6:37PM
Everyone should pay taxes. People that don't pay taxes stand at Government's door with their hand out and, because they vote, they get attention. Either you have to withdraw the franchise from those who are not tax payers, or you require everyone to pay taxes. That way when taxes are raised they feel the sting as well and react against it.
Exempting people from taxes based on income is counterproductive and got us to where we are now.
Ken (Old Texican)| 7.25.11 @ 6:45PM
Mike,
sorry. You didn't clarify with flat-tax in your original post. Since you read my book you are familiar with my "Freeholds" efforts.
The cool thing about "Freeholds" is that profits are NEVER taxed, but the individuals who work there are taxed on income on an equitable basis.
That way, there is NEVER a shortage of working capital...risk capital...
The incentives for the employed are their own "profits" (untaxed) if their Freehold does well, since they are all "stockholders".
Johnny| 7.26.11 @ 6:55AM
Finally, I see someone with the explanation of why taxing the rich doesn't work, that they simply charge more to the consumer to make it up! Why can't the liberals see this or do they see it and just think the real people don't???
POST American| 7.27.11 @ 12:38AM
-------------------FURTHER-----------------------
In light of this latest Freemasonic 'benny violent'
Norway horror ---anyone STILL not convinced
of the hideousness and resolution of the capstone?
USURY, and their 'fave' God mocking front op
'The Doctrine of Works', and
'So--shall' Darwinism (ie EUGENICS) is on the move kiddies.
---Time to clean the Masons and Rockefeller
'Council of Churhces' subversion and degradation ops out of your churches
---Time to throw out your mind control TVs
and surveillance grid, mind mapping PCs
----because 'benny violence' is on the move.
And always remember, EUGENICS is about
their genes.
In short, EUGENICS implies YOU-genocide.
REALLY
TRULY
alan moon | 9.6.11 @ 2:45AM
great article.we are being governed by oafs.
The sequence is 'recession-war-recession-war and
it has to stop.Mp's banks legals,utilities,news barons,and others,all need sorting.
I agree that less tax is the way forward,but the oafs can't see it.The People must govern.