Monthly Archives: March 2015

The Pursuit of Truthiness

 

  It’s not easy to find the truth.  Even when you do research by looking for unbiased views to form a clearer perspective, the information available, although vast, can be based on conflicting analysis, points of view and political influence.

The other day someone mentioned to me as we talked about the financial situation in America,  “Corporate taxes in America are the highest in the world.”  I was a little puzzled because I had read recently that “Corporate Welfare” (the tax breaks afforded mega-corporations) totaled over 100 billion dollars annually.

I didn’t confront the contradiction on the spot and decided to look into the matter.  But, this is where the challenge began…

I actually enjoy doing research and I am skeptical by nature of talking points and zealots on either side of the political fence; I was raised to look for the contradictions that can exist.  I started Googling various phrases.

What do American corporations pay in taxes? – What do corporations really pay? – What is corporate welfare? – Why do corporations pay 35% in taxes?

Most of what I found played into my preconceived notion that mega-corporations (GE, Exxon, Carnival Cruise Lines) pay a pittance because of loopholes and breaks and nowhere near the percentage of 35% (less, most said, than what you or I pay).

Then I came across an article in an online magazine called Real Clear Markets:http://www.realclearmarkets.com/articles/2008/08/do_corporations_really_pay_no.html and found some interesting information.  The article articulately pointed out some mistakes that many anti-corporate writers make regarding their analysis of corporate taxes.

One mistake is that many critics assume that what a company “makes” is their profit, when of course, it isn’t and it is the net earnings that are taxed.  The author of the article, Steven Malanga, writes, The impression one gets from corporate critics is that many are prospering by exploiting loopholes in the tax code and leaving the rest of us to pick up the tab.  But that criticism is based on the mistaken notion that in robust years, such as 2005, virtually all businesses do well. Nothing could be further from the truth.”

American businesses produced 31 million new jobs in 2005 because 1.5 million firms every quarter were expanding and another 370,000 new businesses were starting up. “On the other hand,” Malanga writes of contraction even in a growing economy, “Firms also eliminated nearly 29 million jobs…and another 325,000 going out of business.”

He concludes with a compelling statement: “Taxes on corporate profits that year increased 34 percent…Growing firms, you see, do pay more in taxes.  Just don’t imagine that every business is growing whenever the American economy is.”

I wasn’t about to rest, however, thinking that I had found the only answer to the Corporate Tax Equation.  I searched on…

Edward Kleinbard, an economics professor from USC (who headed a Congressional joint committee on taxes) writes, “The paradox of the United States tax code — high rates with a bounty of subsidies, shelters and special breaks — has made American multinationals ‘world leaders in tax avoidance.’”

And David Kocieniewski of the NY Times points out that by taking advantage of the myriad of tax breaks and loopholes that other countries do not offer, US corporations pay only slightly more (on average) than other industrial countries, and often far less.  The United States is virtually alone in trying to tax its multinational corporations on their foreign earnings, but it allows companies to avoid those taxes indefinitely by keeping profits overseas. That encourages companies to use accounting maneuvers to shift profits to low-tax countries and to invest profits offshore.  Some business owners complain that our system unfairly rewards shady bookkeeping more than innovation.

Liberal groups I found suggest that by ending the tax breaks, loopholes, subsidies and shelters afforded to corporations, we would create enough revenue to lower the tax rate significantly.  The irony is (much like the Buffett Rule toward our individual progressive tax system) that corporations will be paying the same, but we can all say that we “lowered taxes.”

Companies compete “based not on product quality and services, but on accounting gymnastics,” said Paul Egerman, former chairman and chief executive of eScription, a medical transcription service in Boston.

Finally, Clint Stretch, a former counsel to the Congressional Joint Committee on Taxation summed it up thusly, “The only way tax reform makes everyone happy is if everyone wins.  And with the federal budget where it is today, that’s not possible.”

So…what have I learned?  Would it be okay if I answered, “Very little”?  Things are, as I suspected, according to which perspective you take.  Either, A) Corporations need to be incentivized because tax breaks and lower rates enhance growth and that creates jobs or B) Corporations are not expanding commensurate to the windfall of shelters, subsidies and breaks that they are getting, therefore, eliminating “corporate welfare” will balance the burden and budget.

Stalemate?  Not exactly.  The person that initiated my inquiry also mentioned the huge national debt and was quick to point out that “Obama is mostly responsible for it.”  I sent him a Congressional Budget Office chart of spending under the last two Presidents outlining the costs (and projected costs through 2017) of new policies initiated (including Iraq and Afghanistan) by Bush and Obama.  President Bush outpaces Obama over 5 trillion to just under 1.5 trillion.

He replied, “Interesting information.  I didn’t look at it that way before.”

I’m not so naïve as to think that he is going to suddenly register as a Democrat, or even change his anti-Obama opinion, but it illustrates how little actual information can determine our opinions and that just a little bit of research, can shed a glimmer of truthiness onto pre-conceived ideas…and maybe influence them…a little.

Now…let’s look at some other statistics.  Is Joe Flacco really worth ten times the annual budget of Zimbabwe?
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Follow me! I know a shortcut!

Shortcuts.  We all take them.  If there is a shorter, faster way to get to our destination why wouldn’t we take it?  We don’t get into a car to maximize the time we spend in cars; we want to minimize our time getting to the destination.

Even when our cars are comfortable and have the latest Bluetooth or sound system technology, everything is designed to make things, like making a call or changing songs, faster and easier in order to make it seem like not being on a journey at all.

We take shortcuts in every aspect of our lives and that speed motivation drives the technology on which we now depend.
Can you believe that we actually spent time dialing when one push of a button saves our lives 10 precious seconds each time?  Why go to the store at all if there’s an option to stay in our most comfortable chair, go online, and have any purchase delivered to the door?  Today.

We are paying a price, however, for our time saving conveniences and that price is measured by our loss of patience.

15 years ago, I was fine with using my modem to connect my personal computer to the World Wide Web; first hearing the static, then the familiar “boing-boing” back to static, and then…”You’ve got mail!” That payoff made the 20 second wait worth every second because in my “mailbox” would be a message from someone else who was equally excited by this modern age communication.

When I navigated online, I had no problem with my little multi-colored wheel that would spin to inform me that my computer was searching the vast, infinite sea of digital information, looking for that little tidbit, sitting out there with my name on it.

I didn’t even require using patience as I gladly went to the kitchen to pour a cup of coffee to prepare for my state of the art machine to procure what I wanted from cyberspace.  Inside of half a minute it was delivered directly to ME!

Today, however, I am displeased at even mundane and routine tasks and that is amplified with every new application of time saving technology.  It is evidenced by the impatient feeling I get when my computer takes more than a millisecond to navigate to another page.  When it freezes for all of 3 seconds I’ve been known to swear.  That impatience can extend to traffic lights, score updates, my kids, and tv dinners.

It isn’t just me, either; it’s everyone I do business with, hang out with or meet at football games.

We are like this with politics too.  We don’t have time for the journey anymore; we want to get to our destination having done the least amount of work to get there.  So we take shortcuts.  It’s a lot easier for a liberal to illustrate a conservative with a brushstroke that says, “All they care about is money.”

It’s a lot easier for a conservative to paint a liberal with “All they want is to spend my money.”  It gets us to our destination faster; it gets us to our ideological finish line where we can bask in how right we are all the time.

Rather than study history, even to go back a mere 20 years to reveal how our parties and the broad philosophical positions of liberalism and conservatism have together woven policy, too many of us look to the distillation at the end of the process to determine the character of each.

Never mind that not so long ago Republicans embraced many liberal ideas, or that Democrats participated in legislation that today is branded “conservative.”  It takes so much less effort to believe that the other side is always wrong.

Trouble is…we’re all wrong.  We may never reverse the human instinct to take shortcuts, but we can begin to understand that the destination is only an end, and it is the journey that offers the experience from which we learn.  And it is from knowledge that we not only create more substantial results, but create more meaningful realities, measured by our experience of life and not our accumulation of endings.

Time saving technology can maximize the time we have to do more important things, but that paradigm only works if we are improving our journey.  Is life better today? Are we wiser than we were, say, 40 or 50 years ago?

I don’t know…43 years ago we went to the moon using a slide rule…  …and just today I was notified that a glitch in the phone company computer deleted my last payment and so they won’t come out to do service work their technician was scheduled to do last week but didn’t because his cell phone battery died.

If our political discourse, and thereby, our politicians and government are to improve we must give credence to the journey; we must take the time that is necessary to educate ourselves, to investigate, study, and to research our divergent paths.

Patience in politics is a virtue and the more time we take to learn, the more information we will find…and with knowledge comes wisdom.

“Patience is the companion of wisdom,” wrote St. Augustine.

Or as the Buddha said, “It is better to travel well, than to arrive.”

The Bridge From Selma

selma 2
Today marks the 50th anniversary of “Bloody Sunday,” the violent assault at the Edmund Pettus Bridge in Selma on marchers protesting black voter suppression.  I don’t need to use hyperbole here, nor is this a liberal-biased perspective; history, through its black and white lens, reveals clearly the systemic racism that led African-Americans to march for their right to vote without obstruction. And it shows the despicable, racist values of too many White-Americans who challenged them.

selma 1While it may be easy to identify the ways in which our society has changed, and nearly impossible to imagine a Senator today walking with “counter” protesters carrying placards proclaiming “Larger White March Coming,” we are foolish if we believe that systemic racism is now only a faded memory.

Didn’t we think that the “problem was solved” when we ratified the 15th Amendment which prohibited denying a citizen the right to vote based on that citizen’s “race, color, or previous condition of servitude”?

Didn’t we think that the “problem was solved” only a year before the Selma marches when we passed the Civil Rights Act of 1964 to ostensibly end segregation.

mlkYet, even after these landmark Acts, the scourge of racism persisted.  Racism had found a loophole during Reconstruction and created Jim Crow laws to mandate segregation and suppress the African-American vote.

African-Americans, led by Dr. Martin Luther King, had had enough and organized a peaceful march to the courthouse in Montgomery to register voters.  They were met with opposition to derail them every step of the way.

It wasn’t until the rest of America witnessed the violence of racism that we demanded accountability and the enforcement of laws to engineer cooperation from the segregationists.  When we saw pictures in the newspaper of a black woman being beaten with a billy club, when we saw news footage of marchers gasping for air in the midst of tear gas; only then did we cry, “Enough!” and pass the Voting Rights Act of 1965.

marchBy why does it take the culmination of such violence before we draw the line?  Why didn’t society listen and take action when African-American protesters assembled peaceably?  Why didn’t the sight of angry white segregationists screaming racial epithets bring us to the tipping point before?

Today, on the anniversary of Bloody Sunday in Selma, there is another case, this time in Wisconsin, of a young, black man being shot to death by police.  We don’t have the facts yet, and so we cannot presume a thing in terms of the conduct of either the victim or the police at this point; what we can be sure of, however, is that lines of race will be drawn.

One side will say that systemic racism is irrelevant, and the other side will draw a very different conclusion.

I am on that other side, and while I resist judgment before the facts are clear, I have seen enough to ask:  What is it going to take before we pay attention again?  When do we say enough?

An Empty Bag To Stand Upright

Often I overhear claims made by people from the right side of the aisle regarding the intentions of people on the left.  I’m sure I hear as many categorizations the other way around, but I am particularly sensitive to misunderstandings in the former direction, being of sound left thinking mind and body.

The assertion is often made that entitlements, which are, of course, taken from our taxes, “enable” poverty and that perpetuating circumstance is the goal of liberals.

To counteract this cycle, the right proposes that we (tax payers) take a position to inspire the poor to better themselves, because, they believe, taking responsibility for their plight and hard work are the lessons to be learned.  They contend that taxes will be lessened as a result.

Perhaps, this premise is better explained by a letter to the editor from my local paper:

“When I was growing up my parents taught me when I got up I had to make my bed, have breakfast and then there were morning chores. Then it was time to go to school where I learned the basics of reading, writing and arithmetic. I played sports….When we lost it made us work harder to be winners the next time….This brings me to the latest by the liberal left…Not only do they want to give the lazy handouts, now the liberals want us to take care of their children with health care.”

I hear this position all the time, and it’s misguided.  We don’t lessen the incidence of people falling into poverty or increase the likelihood of people rising above poverty by simply holding those afflicted more accountable.

Perhaps, it is best to understand poverty by putting it into a category which, unfortunately it fits; as a man-made disease.  In this context, society is the organism and our condition is our economic status.  “Normal” economic status can be defined as a comfortable ability to provide for ourselves while the inability to provide would be the abnormal or diseased condition.

But we stop a disease from spreading by changing the conditions brought about from the causes, not from chastising the afflicted.

To say that the poor simply need a pep talk and that their failure to find economic stability is overcome by “working harder” is not only ludicrous and insulting, it is naïve and destructive.

Poverty can lead to various degrees of illnesses, physical and mental, that then create even more dysfunctions, none of which go away simply because we say, “We won’t tolerate the illnesses that result from poverty!”   The conditions of poverty can manifest into depression and various forms of illness and perpetuate themselves.

No one chooses poverty, in fact, we could say that like an airborne virus, poverty chooses them.

Anywhere from 2000 to 3000 American children are born into poverty every day and many will not have the advantage of a functional family or educational opportunities to better their lives. They may learn to survive from the only window of society they are privy to; a world of more poverty and often crime.  How can we hold them to the same standard of accomplishment that the letter writer above uses as his motivational primer?  In fact the letter implies that those using entitlements are poor because they lack the character to achieve and they need to learn from their mistakes and “work harder next time to be a winner.”

There is only one direction to take toward reducing poverty and it isn’t realized from platitudes about personal accountability and hard work.  Ultimately, it is the creation of jobs, but there is a bridge to cross as we argue toward how to achieve that end.  That bridge is a communal effort from the whole of society to commit to better and more accessible education; to provide access to mental and physical health rehabilitation; to provide bridges of sustenance while those who are out of work can look for new opportunities.

It is about creating good community and government programs that are well funded to provide these services.

Yes, there will be those who scam the system, or who find a way to become “enabled” by our commitment, but they are very few when you look at the actual numbers and find less than 2% of those on Welfare abusing the system (http://spritzophrenia.wordpress.com/2011/01/04/how-bad-is-welfare-fraud-in-the-usa/).  Most go back into the tax base and prove that the programs essentially work.

The point is that the money we invest in welfare programs and various entitlements move us in the correct direction and are not teaching, as the letter professes, a lack of accountability and motivation.

And, consider that the money we spend is also economic stimulus as SNAP, for example, goes right back into liquidity.

I’ve heard my liberal friends rally to the cause of welfare programs and say it’s our duty as a fair and prosperous society to take care of those who are less fortunate, and while I agree I don’t find that inspirational. I say that it’s our “privilege” to care for one another and it is from that inspiration that I find a wealth of motivation.