Intro: The following article is only confusing, because Americans believed in
good faith the lies told to them about corporate taxes ... throughout the 2012 Re-
publican Party primary debates. The Republican presidential candidates paint-
ed the picture of a financial horror story to the point of crying out that the sky is
falling. Well, in the Year 2011, the AVERAGE effective tax rate of American
corporations was a bargain basement 12.1%.
Concerning Republican propaganda and the infamous Romney 47% video, why
do people who have more than enough money complain about having to miss a
child's soccer game, in order to amass more money that isn't needed? In addi-
tion, what extra time is acquired in making money of off interest-bearing notes?
The only answer to the first question is that they are people not grateful for what
they have, but who obsessively seek to consummate insatiable greed. They see
themselves as not having enough money.
The compulsive gambler and drug addict mind set of present corporate Ameri-
can resulted in an income disparity of 288. This refers to the reports which re-
vealed that a member of the Economic 1% makes 288 times more income per
year than a median worker with a $57,000 yearly income.
http://money.cnn.com/2012/09/11/news/economy/wealth-net-worth/index.html
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The chart used to advocate the trickle-down theory of Reaganomics is the Laffer
Curve. The root of the curve is 14th Century Tunisian philosopher, Ibn Khaldun.
In fact, the charted curve looks like a roller coaster design. None the less, the as-
sertion attached to the curve is that lowering business taxes will result in added
investment on the part of business, thereby creating jobs in the process. The ad-
ditional investment would then result in profits and wages. In turn, the added
profits and new wages would result in additional tax revenue.
The problem today is that history has repeatedly illustrated that the Laffer Curve
assertion is invalid in the presence of widespread outsourcing and overseas tax
havens. This is because much of the added money-in-hand is sent overseas, cre-
ating a drain on the nation's money supply. In as much, corporate dollars have
NOT been trickling down. They were going overseas, thanks to a Newt Gingrich
who advocated a practice which has regarded as a crime against humanity in the
Nuremberg trials. America's corporate management adopted the "take the money
and run" policy.
Now, the Laffer Curve's main assertion is based on an assumption about human
behavior that was disproved during the Clinton Years. It assumed that corpor-
ate management was going to take the newly available corporate dollars and in-
vest them in America. Overseas tax havens and foreign sweatshop profiteering
wasn't in the original equation. Now, concerning Reagan's trickle-down theory,
know that the circular "flow of income & expenditures" is NOT a matter of mon-
ey trickling-down or drying-up. It's a matter of injection vs. leakage into and
out of the circular flow that is illustrated at the beginning of any introductory
economics school book.
The Lowest Effective Corporate Tax Rate in Decades
The effective corporate tax rate of 2011 was its lowest in 40 years, at 12.1%.
This means that 2012 should have resulted in the highest job creation in dec-
ades. It didn't do so, despite the fact that the effective U.S. corporate tax rate
is among the lowest on earth.
Now, in 2010 and 2011, corporations were permitted to instantly deduct the
sum total of new equipment, instead of depreciating it through the years. In
2012, the immediate deduction will be 50%. Due to this, it is assumed that
the effective tax rate of 2012 will be the usual 25.6%. The door for added
employment was open in 2011 and 2012. There was a bit of job creation,
but not the amount that the Laffer Curve theory would predict.
The link to an outline of the 2010 effective tax rates of 280 corporations is
posted below. It gives some insight to the present economy.
http://www.midnightdestiny.com/2011/11/280-us-corporations.html
See also:
http://business.time.com/2012/02/06/the-corporate-tax-rate-is-at-its-lowest-in-decades-is-big-business-paying-its-fair-share/
The New York Times reported six weeks before the start of the Occupy Wall
Street Movement that workers' wages were declining, while corporate profits
were rising. Thus, even though the final thesis statements of the movement were
in need of radical amendment, the movement itself was the result of cause and
effect. Very simply, the movement was the result of college graduates being im-
mersed in college loan debt, while being deprived of the income needed to pay-
off the loans.
The reason for the movement was very simple, yet not universal enough in its
scope of issues to have succeeded . None the less, the OWS Movement was
a warning call to the upper economic echelons of society. The call was ignored.
http://www.nytimes.com/2011/08/06/business/workers-wages-chasing-corporate-profits-off-the-charts.html?_r=0
In addition, corporate profits reached record profits in the 3rd quarter of 2011,
to the tune of $1.97 trillion. In the same quarter, worker output rose 3.2% (as is
measured in annual terms). Yet, the workers' share of new income fell to 57.1%.
Before the Year 2000, it was approximately 63.9%. The bottom line is that work-
ers were not getting paid commensurately.
The summary is that real income amongst workers decreased, while U.S. corpor-
ations reached record profits. There was no trickle-down parity occurring; only
the presence of greed. A case in point comes from the U.S. Congressional Bud-
get Office. It reported that the income of the richest 1% rose 275% from 1979
to 2009. Recent reports from media sources placed the number at 288%.) In
contrast, the income of the bottom 20% rose no more than 20% during the same
time span. Thus, the phenomenon of American income disparity is quantitative.
http://www.huffingtonpost.com/2012/01/31/wages-2011-record-corporate-profits_n_1244297.html
http://www.huffingtonpost.com/2011/12/01/labor-forces-share-of-income_n_1124189.html
Even though there's an element of validity in the Laffer Curve, there is NO basis
in reality for the "trickle-down" mechanism, being that money travels sideways
in a circular flow (and NOT vertically in any type of economic caste system king
of the hill game). Economics students learn this during the introductory week of
classes.
An economist has the task of watching for impediments to the circular flow, as
well as watching for leaks draining money away from the flow. Equilibrium is
the economist's goal. In as much, a continuous Trade Balance Deficit, as the one
that the American economy has been experiencing for consecutive decades, is a
huge leak of the circular flow. It's like a hole in a ship's haul. This means that
right wing operatives have the moral obligation to cease blaming unemployment
on America's unemployed. FAIR trade and FAIR exchange is what is essential
in economics. The "free trade" label used by Republican politicians refers to
none other than trade that is free of regulation. It refers to trade that is free of
accountability.
"Free trade" simply means being free of a watchdog that would otherwise pre-
vent you from profiting from the gross injustices seen since the days of Newt
Gingrich. Therefore, the "Free Trade" logo is as bogus as is the "right to
work state" label.
As a reminder, a right to work state is nothing more the typical union-busting
low-wage state. A right to work state is a permission slip to keep the worker
far less protected than the norms of civilization require. Such states result in a
large population of the working poor. This includes large numbers of the 47%
who were maliciously and fallaciously treated with contempt by Mitt Romney
and right wing activists. The irony of the "free trade" label is that it thrived
on slave labor. Money made this way was money made by cheating.
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