Time to Bust Big Business

Right In the Mouth

 

 

 

SAVING AMERICA

Parts III & IV

The Third and Fourth in a Series of Ten Things We Must Do in the

Next Eight Years to Restore Our Nation

 

Exxon-Mobil, Bank of America, AstraZeneca, Chevron and Johnson & Johnson, among many other giant corporations think that eyewash can wipe away their public sins.The eyewash is TV commercials—P.R. fakery—intended to distract us from their deplorable anti-social behavior while they drone on about what warm and fuzzy companies they are.Corporate moguls want us to believe that they’re really a bunch of good guys at heart,all for the American family, the redwood forest, the New York island and the Gulf Stream waters.

 

 Amusingly, Chevron is pushing this chestnut: “Finding a newer and cleaner way to power the world.” BP hired Kenneth Feinberg, notorious fixer for Monsanto (maker of Agent Orange)and A.H. Robins (maker of the Dalkon Shield IUD),at $1 million a month to  administer its claims compensation fund. A federal judge recently ordered Feinberg to stop representing himself as an independent contractor of BP and tell the truth, i.e. he's a corporate lackey. Payments due suffering Gulf Coast businesses and residents  have slowed to a trickle akin to maple tree sap in January.

 

Feel like your early evening TV viewing is chopped up by idiotic commercials for ED, “restless leg syndrome,” weakened urine flow, sinus headache, etc.? That junk is on your tube because pharmaceutical companies don’t want to be pioneers—they prefer pushing meds that are quick and easy to make. In 2004 the industry spent $57.5 billion on marketing and $31.5 billion for R&D. Eighty percent of the marketing budget was devoted to pandering to the nation’s 770,000 practicing physicians, an average $61,000 per doctor at a time when the median household income was $43,318.

 III

 Too Big to Be American. As unscrupulous as these companies are, they aren’t the absolute worst of the lot—the manufacturers are.  Beginning in the 1980’s American manufacturing companies began relocating overseas to boost profits by cashing in on  lower wages and production costs. It was an  almost unnoticeable trickle. Then the 90s gave way to a deluge. 

By 2008 the U.S., according to the Bureau of Labor Statistics, lost 2.2 million manufacturing jobs. These were the good-paying jobs that grew our top earning workers of the middle class, jobs in electronics, aerospace and auto industries.

With globalization and since passage of the North American Free Trade Agreement (NAFTA) in 1994, the country has lost 4.9 million jobs altogether.  Americans are quick to blame NAFTA for our economic problems, but “free trade” alone isn't responsible for the Great Recession we’re in, Wall Street is.

The other culprits responsible for our trade deficit and jobs lost, however, are the manufacturers who’ve shown no sense of loyalty or duty to the country and the people whose taxes and brand loyalty, made them successful.

Rather than prepare and strategize for the challenges of free trade  that the country faced, they dumped loyal workers and relocated. There was a ton of money to be made in doing so but there were also great opportunities here. The overseas cash was quick and easy money while revamping their overall marketing and redeployment strategies here would have involved too much time and innovation.

So, the corporations effectively abandoned America like an old farm that was no longer profitable to run.

 

Ridding the Country of the Abuses of Big Business

 These companies have been banking on making their products cheaply “over there” and selling them at a good mark up in the U.S. while developing new overseas markets. They forget that no matter how ingenious they think their strategy is, the United States is and will  remain their biggest market for a long time. And that's why we have them cornered if Congress acts with some courage.The actions of  these turncoat companies can be countered by slapping tariffs on all products they manufacture abroad but bring back for sale here.

When the breast beating CEO’s of  mega corporations boast that they run “multinational” companies, not national ones and as they relocate their headquarters to the Caribbean to  dodge paying corporate income taxes, we have  justification for treating their businesses as foreign ventures and applying the laws regulating imports to their products and taxing them accordingly.

Next, federal and state governments should offer tax and other incentives to foreign manufacturers willing to establish new plants here and create jobs to replace those lost to outsourcing by U.S. firms. Especially attractive propositions could be extended to businesses who are creating new, innovative products, run on clean energy and make quality goods that compete with inferior ones whether made here or imported.

There’s no reason to be protective of corporations that fly the red, white and blue when it’s convenient but have no real commitment to this country. Even when called upon to accept  social responsibility for manufacturing disasters or for deaths and injuries caused by defective products, they resist. They hide behind their corporate personas arguing they are not “citizens” but legal “entities” whose first obligation is to their stockholders. It’s a bogus argument, one that big business has had mixed success with in the courts.

 It’s also a protestation that blithely ignores this fact: pick almost any corporation and you’ll find that the majority stockholders are its company executives,   members of its board of directors, banks and other corporations that own stock in the subject company and the heirs of probably hundreds of deceased shareholders from the nation’s richest families.

 It’s time to treat these corporations for what they are: mere legal entities that are not  American companies, but international corporate islands that don’t use American workers, do their manufacturing overseas, maintain their headquarters offshore to avoid paying taxes and are always motivated by profit and never the common good.

 

 IV

 

Seal Loopholes That Allow Big Business to Weasel Out

of  Paying it’s Fair Share of Income Taxes

 Bring up the issue of corporate taxation and the Captains of Industry begin sobbing. They blubber about being forced to cut jobs, whimper about being unable compete with imported   goods and ultimately sniffle that they may have to move some operations overseas.

 To begin with, recognize that they aren’t whining, they’re threatening. And many of the most profitable companies have all ready acted on their threats.

 So why are they still operating here? Because not only does America remain the biggest market they have, it is the best place in the to world to live, it is also the safest place to do business, protect personal wealth and raise and educate a family. What’s more, corporate executives recognize (to the detriment of the rest of us) that here is where they can control the government, make the laws and regulate themselves by means of their money, influence and lobbying. 

 Now, here is a fact their corporate majesties would prefer you didn’t know: The highest level of corporate taxation is 35%, which is 15% lower than the top rate you’d pay on personal income. And no corporation ever has and never will come close to paying anything near 35%.

As previously remarked, many corporations have expatriated themselves by moving their headquarters offshore to avoid taxation. They call this practice “corporate inversion” which sounds like a high breed of business administration when  it's actually a euphemisim for “tax evasion.” *

Imagine you own a small business—a pizza shop. You'd be using the same public services and facilities a large manufacturer does: police and fire services, water and sewage plants, waste and trash removal and street maintenance and cleaning. Then there would be human resources: the roads and highway maintenance crews, the highway patrol, emergency and ambulance people and hundreds  of public  employees who provide social services and care for parks, woodlands, lakes and rivers.

Large corporations rely on our shipping harbors and the Coast Guard, airports with their runways, hangars, security personnel and air traffic controllers. They use the postal service, railroads and   public  facilities built to accommodate rail service and truck inspection and weigh stations. They  depend on an army of  state workers who are in public administration or maintain roads, bridges, dams and dozens of other state-owned buildings and facilities that business needs access to daily.

The money necessary to operate and repair all this “infrastructure” comes from taxes, the primary source being state and federal income taxes paid, for the most part, by small businesses and the citizenry. 

If we continue letting mega corporations making hundreds of millions or billions of dollars a year to avoid taxes, then the remaining businesses, big and small, and you and I will  be giving  the likes of General Electric and Exxon Mobil a free ride into some distant time. And, no matter how much the rest of us pay, it won’t be enough, because our public buildings, roads, bridges, harbors, etc. are going to continue to crumble. Then our glamorous multinational corporations won’t have to move to a third world country because we’ll have one right here.

 

 *At the end of 2009, ten big businesses had moved their headquarters abroad for tax purposes. They are:

Halliburton (Dick Cheney’s former Houston-based company); Accenture (Bermuda-based arm of Arthur Andersen LLP, accounting firm involved in Enron Corp scandal.); Foster Wheeler Ltd. (headquartered in Bermuda with most of its main offices in New Jersey.); Ingersoll-Rand Co. Ltd. (Also in Bermuda, but a New Jersey-based company that makes Thermo King refrigerated trucks.); Tyco International Ltd. (New York operation reincorporated in Bermuda and into everything from healthcare services to telecommunications and electronics.); Cooper Industries Inc. (Moved from Houston to Bermuda. Maker of electrical products and tools that had $3.6 million in government contracts in 2002.); Noble Drilling Services Inc. (The fourth-largest U.S. offshore oil and natural gas drillers. Claims Cayman Islands as home but operates out of Sugarland, Texas.); Global Crossing (Is based in Bermuda where it provides telecommunications services to the world and has its administrative offices headquartered in New Jersey); Seagate Technology LLC (California designer/maker of popular Barracuda 750GB hard drive, headquartered in Caymans.); Nabors Industries Ltd (World’s largest onshore oil and gas-drilling contractor, moved from Texas to Bermuda and Barbados.)