America Unmade

NewsMax ^ | May 22, 2003 | Diane Alden

[Remedy]

 

"I didn’t mention the flow of Chinese [industrial] spies who were in and out of our booths.

• Vladimir Ilyich Lenin - The Capitalists will sell us the rope with which we will hang them.

Smith was also smart enough to know that businessmen and government working together can be a dangerous mix. That is why in the U.S. today we don't really have capitalism but rather corporatism; that is where government and business corrupt the market in unison.

• Benito Mussolini - Fascism should rightly be called Corporatism as it is a merge of state and corporate power.

We are still faced with the importation of cheap labor, through legal and illegal immigration. That has had a devastating impact on the social infrastructure in states like California, Texas, Florida, New York, North Carolina, Illinois, Arizona, New Mexico and Nevada. Even many northern states have budget deficits in the billions due to lower revenues and having to absorb higher costs in social, educational, and medical costs partly due to tremendous increases in immigration.

• CULTURE : SYMPOSIUM Q: Is Multiculturalism a Threat to the National Security of the United States?

If the WTO agrees to accept the case and the Indian group wins, that means that the U.S. will have to change its immigration laws to suit the WTO, Indian economic interests and foreign guest workers.

• CULTURE : Liberal Democracy vs. Transnational Progressivism: The Ideological Civil War

[independentmind]

It is close to impossible to get Americans today to understand that an economy based on manufacturing and an economy based on finance are not equivalent. Manufacturing provides jobs for the largest number of citizens; finance is the non value-adding but crisis-provoking segment of modern society.

Not all Americans have the skill-sets to successfully participate in an economy primarily centered around finance and information technology, either. I've read reports that state that a high school graduate in the U.S. has far less choice in terms of occupations than do his counterparts in most other developed countries.

[Chi-townChief]

This is the same BS that we've been hearing since the 80s when the trade deficit was used as a political bludgeon against Presidents Reagan and Bush I. I've been in manufacturing in one form or another for 30 years now and barely a day has gone by where I haven't been concerned about job loss (very bad choice of career on my part.)

And the reality is that American manufacturing has been exported for at least the last 45 years. When we were kids in the 60s, it was sold to us as a good thing because it would help rid us of the "baddddd" air and water pollution and, besides, we had better things to do with our time.

A lot of these "experts" such as the author of this piece (who does make quite a few excellent points) are looking for a quick fix to shut the barn door years after the horses have run out.

I could go on and on about this but time doesn't permit right now.

[betty boop]

p.s.: These trends may account (at least in some part) for President Bush's concentration on small businesses -- both as the engines of job creation, and as the "cradles" of future large corporations. This would be the rationale for the tax cuts he's trying to get (and which he won't get in the size he wants).

As noted, most small business owners pay taxes at the personal rate. Cut their taxes, and they have more money to plow back into their businesses, as capital investment and as new-hire employee salaries. Thus job expansion and technological innovation are both benefited by cuts in marginal tax rates.

Of course, the Dims either don't get this -- or they do get it, and just don't want to see Bush economic policies succeed. They keep intoning the tired ol' mantra: "He's trying to get tax cuts for his rich friends and corporations!!!" What dunces they are. They would be completely irrelevant -- except for the fact that we can't seem to get them out of our faces and out of the way of needed economic reform. :^)

[independentmind]

As noted, most small business owners pay taxes at the personal rate. Cut their taxes, and they have more money to plow back into their businesses, as capital investment and as new-hire employee salaries. Thus job expansion and technological innovation are both benefited by cuts in marginal tax rates.

Most small businesses don't have the clout to lobby for special tax loopholes either. Nor do they have the ability to shift income to foreign subsidiaries and avoid taxes altogether. And then we get to the expensing of stock options for tax purposes, which one could argue gives an edge to publicly traded companies, which are generally larger in size. And the list goes on and on...

[Alamo-Girl]

Thank you so much for the heads up to the great article! I agree with your views at post #1. Hugs!

[Chi-townChief]

I'm sure that the Demo-rats "get it." The worst nightmare for these guys want right now is for the economy to start percolating.

[1rudeboy]

We're a service economy now.

Seein that we're the largest exporter in the world, that's pretty darn good for a service economy.

[Modernman]

What I mean is that the service sector is the biggest part of our economy.

[betty boop]

Most small businesses don't have the clout to lobby for special tax loopholes either. Nor do they have the ability to shift income to foreign subsidiaries and avoid taxes altogether.... And the list goes on and on....

It sure does, independentmind. Plus there's no ability to shelter personal wealth from current taxation inside the business. If you're a small business owner, all profits are currently taxable in the year they're earned.

A recent Wall Street Journal editorial gave a telling example of this. If you're a Warren Buffett -- the majority stockholder in Berkshire-Hathaway -- you can shelter your profits inside the business. Sure, taxes will be paid on profits, but at the corporate, not the personal rate. Berkshire-Hathaway retains earnings -- i.e., it does not distribute dividends to stockholders. I thought this was an interesting fact; for Mr. Buffett has been loudly editorializing against the Bush proposal to eliminate taxation of dividends. If such a provision were to be enacted, there would be considerable pressure on corporations to distribute dividends -- meaning that there would be reduced incentives to accumulating personal wealth inside a majority-owned business. Sure, Mr. Buffett would receive his dividends tax-free, just like the little guy. But in the case of Berkshire-Hathaway -- which has a history of expanding by means of acquisitions -- there would be less retained earnings to fund such a "growth strategy." Instead, shareholders would receive business profits to which they are entitled.

I read recently that Microsoft has something like a $400-$500 million cash position due to retained earnings. Sure, to some extent this is reflected in the share price. Yet still I wonder whether another purpose of following this strategy is simply to have sufficient means to defend the firm against hostile take-overs. Meanwhile, under current law, the "little guy" shareholder doesn't get paid -- though the managerial class gets to effectively defend its own positions, and large shareholders get to shelter their pro-rata profits from current taxes.

[betty boop]

The worst nightmare for these guys want right now is for the economy to start percolating.

Yeah, Chi-townChief. But if the economy doesn't start "percolating" pretty soon, it's going down the tubes. If the Dims know this, do you suppose they care -- or is scoring points against the president, and winning the next election, more important to them than the prosperity of their fellow citizens?

[independentmind]

such a provision were to be enacted, there would be considerable pressure on corporations to distribute dividends -- meaning that there would be reduced incentives to accumulating personal wealth inside a majority-owned business

Dividends are also paid in cash, which are a lot harder to fudge in financial statements. Any incentives to encourage the regular payment of dividends would be a good thing.

[independentmind]

Correction:
Dividends are also paid in cash, and as a benchmark of performance, are a lot harder to fudge in financial statements.

[Chi-townChief]

"If the Dims know this, do you suppose they care -- or is scoring points against the president, and winning the next election, more important to them than the prosperity of their fellow citizens?"

Well, the Rats always tell us that theirs is the "party of hope" and right now they're hoping for another terrorist attack in the U.S. or for the economy to tank or for things to turn sour in Iraq or all of the above.

[hedgetrimmer]

My kids! Heck _I'm_ paying right now! We all are!

[unspun]

See Boro Reljic's article in the Leader a few weeks ago -- about more govenment jobs existing now in Illinois than in manufacturing?

http://illinoisleader.com/opinion/opinionview.asp?c=4642

[TheRightGuy]

Hate to say it, but The China Fund (CHN) has been the best performer in portfolio since first of the year.

[Phaedrus]

Beyond the $2.0+ trillion taken in by the Feds are the several hundred billion dollar Tax Code and regulatory burden and the immnese costs to society of rampant unchecked litigation. The Republicans may be willing to give us a relatively small tax cut but both the Dems and the Repubs are a Party of Big Government. Actual shrinkage is never mentioned. I would agree, however, that the Repubs are the clear lesser of two evils. I join Sobran in being The Reluctant Anarchist.

[m18436572]

I don't think I'll be offered a realistic choice on election day. Better of two evils mabey, but hardly a choice IMO. I'm still waiting for someone to represent me. Funny thing, most people I know feel the same way, and have for many years.

[Cacique]

ping