Keeping jobs in the state…

Will our new governor have the guts?

By Jack E. Lohman

Wisconsin’s next administration must address the state’s business friendliness. Corporate taxes and health care will be key, but politicians stand in the way of both. Political cash drives their agenda.

Business taxes are counterproductive because they represent only 8% of revenues and are passed on to consumers and we reimburse them at the cash register. They should instead be ZERO, because even their expensive CPA and legal fees for tax minimizing are added and the consumers pay those too. 

This is a stupidly wasteful administrative expense. A feel-good regressive tax the public thinks it doesn’t have to pay. A political shell game that sucks votes with negative public benefit.

And these corporate taxes make our businesses uncompetitive with other companies throughout the world that benefit from their own country’s universal health care systems, and in some cases their lower tax rates and lower labor costs. So jobs are sent to other states and other countries and our economy further tanks and our workers have no cash to buy the products they import. Good thinking.

The games we play…

This is for sure: the middle- and low-income people cannot pull this economy out of its nose dive. Only the wealthy can.

Yes, we’ll have to take back the Bush tax cuts and increase the tax rate on the wealthy. And we’ll have to re-regulate the financial industry and give the owners of companies (the shareholders) control over executive pay packages. If they want to pay them outrageously, fine, but it’s their call and not that of a hand-picked board of directors.

And we must eliminate the massive conflict of interest that results when politicians take cash bribes from special interests, and when politicians vote for industries in which they have a financial interest. We call that insider trading and Michael Milken was sent to jail for it. Politicians should be held to the same standard.

When the share of the top 1% of our population approaches 25% of all US wealth, as it did prior to the 1929 crash (see first chart), and the value of our IRAs and investments tank, I instinctively know who I am transferring my wealth to.  My losses have become their gains.

This will inevitably lead to a rebellion in the US unless our politicians start representing the people rather than their campaign funders. Only public funding of campaigns will get us there.


— Don’t even think about getting our jobs back without first getting the corporate bribery out of the political system. Taxes cannot be reduced as long as politicians need private funds for their campaigns.

— What health care system is in the best interest of the nation’s people and business climate?  If $46 million in cash bribes had not passed from the insurance industry to members of congress, we’d know immediately. We’d fix the system overnight.

— But that says it all, doesn’t it? Without cash bribes to our politicians they’d be voting for the best interest of the public all the time. See it described by Sen. Bernie Sanders.

— If our health care battle teaches us anything, it is that cash talks and industry bribes work and campaign reform must be our next battle.

4 Responses to Keeping jobs in the state…

  1. John says:

    Remember when our corporate neighbor contributed to our cities and villages? The global give away destroyed that quaint tradition.

    Zero percent business taxes would shift support of the “commons” to the individual. Instead of paying for that support in the price of the product, we would just see our taxes increase. Unless of course we do away with public ownership of our streets, utilities, parks, libraries…etc.

    8 percent seems a small price for businesses to pay, too small. One positive: it would stop competitive bidding between states.

    But then you would see corporate power morph into what happened with Mercury Marine. To keep their corporate jobs, a local tax has been added to retain the employer. And that’s just the beginning.

    That’s were we will be going next, once the corporate tax is gone.

    Having said all this, I agree with much of your other points.

  2. Hadn’t thought about the competitive bidding between states, John, which would be good if that were eliminated. But you are right that they’d simply replace that with taxpayer-funded subsidies. The only way of stopping that is to prosecute it as bribery (which it is).

  3. John says:

    I’ve thought about it some more, and noticed something odd. You brought up opposing ideas. “Business taxes are counterproductive because they represent only 8% of revenues and are passed on to consumers and we reimburse them at the cash register.

    If business taxes are passed on, then the impact on business is zero. They’re not hurt at all. They’ve made up for the loss. Next…

    “They should instead be ZERO, because even their expensive CPA and legal fees for tax minimizing are added and the consumers pay those too.”

    The price of a product is the current market value, what people will pay or have paid over time. It also compares with the competition. It’s crazy to assume a business is going to lower the price of their product once their taxes are gone. The same can be said for employer health preniums. Without the premiums, employees don’t appear to be getting better/higher wages.

    Republicans are running on a “good economy” right now, suggesting business tax cuts will allow companies to expand, hire people and do well. I guess we can forget the Great Recession, huh? Demand drives hiring and corporate expansion, not tax cuts. No one is buying anything anymore, thus businesses aren’t hiring and making more stuff. You’re arguing again for top down, trickle down, voodoo ecnomics.

    I all starts with demand, from the consumer. With job losses and stagnant wages, who can buy our way back to profits.

    Your thoughts.

  4. Where I disagree, John, is that if you were to tax all US corporations at an amount equal to, say, 100% of their profits, these corporations would pass all 100% on to the consumer and come out even. Unless, that is, they are competing with identical imported products that paid zero corporate taxes. Then our corporation sells zero product and employs zero people. Jobs are lost.

    I’m talking taxes on profits, not sales taxes which would affect both companies.

    If you increase US corporate taxes and the demand is satisfied by imports whose corporations are not taxed, we still accomplish zero sales of US products.

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