Corporations in America

As I hear this consistent talk about how the private sector is much more capable than government to operate social programs, and how tax cuts are needed to spur the economic growth so that the corporations can be later taxed, I present an interesting source.

http://www.pbs.org/now/politics/corptax.html

The American income provided for comparison is a family making $30,000 per annum, at a rate of 17% federal income tax.  What is truely interesting is that many large corporations get substantially less federal taxation, and in some cases, are refunded for taxes they never paid.  This is a strange case indeed, as it seems that these "tax cuts to spur economic growth" are rather redundant, as many corporations are paying less than the taxes of impoverished people. 

Libertarian doctrine is obsessive about telling us that government should be weakened, and the spending of the government curtailed to allow the market to grow.  It is rather amusing that the people who benefit most from this plan are not the people who pay the most relative taxes, but the people who pay the lowest percentage of taxes, despite how enormous that 1.8% may be (here's looking at you Microsoft).

It makes me wonder why so many middle class families believe the libertarians want to help them.  The middle class bears the brunt of the highest taxes, and is the true "common men" of America.  When libertarians argue that a graduated tax bracket makes it discouraging to become rich, they need only read the nice steady 1.8% that Microsoft pays to the federal government.  Ah, what a burden it is to be rich.

American corporations are truely the scourge of the market. And they themselves are proof of the "high tide raises all boats" myth expounded by various corporations and economic theorists.  Simply take a look at the GDP of various nations.

http://people.hofstra.edu/geotrans/eng/ch2en/conc2en/globalgdp.html

As the chart shows, America doesn't generate so huge a GDP as many would like to assume, and that it is about 3 times that of Japan and 5 times that of Germany. Now that you know the scale of global GDP, look at this source. (Click on Facts and Figures)

http://www.pbs.org/now/politics/executive.html

What is evidenced by the diagram is that in Japan, a corporation executive makes 11 times that of a factory floor worker, and likely with due cause (i.e. owning/starting the business), in Germany it is a larger 12 times. (Still reasonable)  Now go over to American corporation executives......Hrm. It seems that American CEOs make a staggering 475 times more money than the factory floor worker.  What is being drawn here is that the United States' policy of "rising tide" is not narrowing the income disparity, but widening it, making the rich MUCH richer, and the poor MUCH poorer.

Libertarians will sometime outcry that government facilitates this taxation, and must be weakened to prevent further injustice.  But I ask Libertarians, with the current system, what empirical proof do you have that doing so will rein in the income disparity?  What evidence do you have that doing so will not be what the corporations would prefer?  Herein lies the evidence of pessimistic outlook of Libertarians, would not justice be achieved if politicians were honorable? Would not the corporate sway be stymied if politicians rejected their bribes and lobbying? Would not taxation be truely graduated if loopholes were closed for large corporations? Would not federal programs and funding increase if corporations actually started paying their share? Why, if they actually paid, lower taxes across the board would be actually JUSTIFIED.  But of course, Libertarians will tell you that all politicians are corrupt, excluding themselves, and that the inherent evil nature of man evaporates in the private sector.  Businesses should exist to make money, government should exist to enforce the people's will, and the people's will is the only sovereign power, without it's grace, business would not exist.

>>2 I agree with a lot of what you have to say.  A lot of the issues we are having now and have had in the past are not due to capitalism, but due to government intervention in the market.


>>1
"What is truely interesting is that many large corporations get substantially less federal taxation, and in some cases, are refunded for taxes they never paid."

Sounds like a failure of the IRS (a government agency).  If we had a flat tax, things would be far simpler, and you wouldn't have bullshit like this.

"Libertarian doctrine is obsessive about telling us that government should be weakened, and the spending of the government curtailed to allow the market to grow."

That is one argument.  There are others as well, such as the pro-property rights argument (just for ex.)

"It makes me wonder why so many middle class families believe the libertarians want to help them."

Well, as I said, if we had a flat tax, the inept IRS wouldn't be there to dish out tax money to corporations that they really never paid into the system anyway.  Libertarians support freedom.  Anyone who generally thinks that government is too large, and that liberties are too frequently infringed nowadays would be best served by the libertarian party.

"The middle class bears the brunt of the highest taxes, and is the true "common men" of America."

I fail to see how you can justify attacking the party that wants to lower taxes on everyone (including the middle class), while in the same article complaining because taxes are too high for them.

"American corporations are truely the scourge of the market. And they themselves are proof of the "high tide raises all boats" myth expounded by various corporations and economic theorists.  Simply take a look at the GDP of various nations.

http://people.hofstra.edu/geotrans/eng/ch2en/conc2en/globalgdp.html";

I don't see how that chart makes you right.  In fact, it would seem to make you WRONG.  As you can see, according to your chart, the USA (a pseudo-capitalist society) generates 32.3% of the world's wealth.  The other two countries generating a rather large portion (also both reasonably economically free); Germany and Japan, generate 12.3% and 6.1% respectively.  To all appearances, this graph would make an argument for why capitalism is such a wonderful system - it is so damn good at producing wealth.  I wonder, by contrast, what percentage of the global GDP does North Korea (socialist system) produce?


"As the chart shows, America doesn't generate so huge a GDP as many would like to assume,"

Yeah, 32.3% of all the wealth in the world really isn't shit, is it? LOL.  You should also take into account our population.  We have around 300 million people.  How many people live in the whole world?  The world has a population of over 6 billion (it is approaching 7billion) people, and the USA, with its measly 300 million people is producing 32.3% of the world's wealth.  To put this in perspective, the United States has about 4.52% of the world's people, and produces 32.3% of the world's wealth. 

"What is evidenced by the diagram is that in Japan, a corporation executive makes 11 times that of a factory floor worker, and likely with due cause (i.e. owning/starting the business), in Germany it is a larger 12 times. (Still reasonable)  Now go over to American corporation executives......Hrm. It seems that American CEOs make a staggering 475 times more money than the factory floor worker."

You are overgeneralizing, firstly.  There are CEOs of major american corporations (COSTCO comes to mind), that make 350,000$/year.  Yeah, its nothing to scoff at, but nonetheless - it is a far cry from the absurd figures that you listed above.  But I guess you would like to give everyone the impression that all CEOs are evil successful bastards who make 475 times the income of their average floor worker, right?

http://abcnews.go.com/2020/Business/story?id=1362779

"What is being drawn here is that the United States' policy of "rising tide" is not narrowing the income disparity, but widening it, making the rich MUCH richer, and the poor MUCH poorer."

First of all, thanks to globalization and american business, the global income gap is shrinking at a rather impressive rate: 
http://www.cato.org/pub_display.php?pub_id=6686

Also, regarding your 'income gap' statistics and studies: 
http://www.cato.org/pub_display.php?pub_id=6686

"But I ask Libertarians, with the current system, what empirical proof do you have that doing so will rein in the income disparity?

"What evidence do you have that doing so will not be what the corporations would prefer?"

Lowering taxes to create a prosperous economy in the long term would be in everyone's interest, really.  From my standpoint, what you are asking me is:  'what evidence do you have that creating a prosperous economy would be a good thing?'  I mean, common, really.  Many democratic presidents that have been rather looked up to or revered (such as Kennedy) actually slashed up the budget and reigned in government taxation - and look at the result? Happy people, prosperous economy.  I could sing a similar tune about Reagan, but that might get some of the leftists in here a little exited so I'll refrain. 

Note:  I am speaking strictly in terms of economics, and I don't advocate voting for either major party! Vote libertarian!
http://www.lp.org/

I don't see why you automatically assume something a corporation 'prefers' is intrinsically bad.  Globalization, for instance, is something many in the corporate world are embracing, and that is indeed narrowing the income gap: 
http://www.cato.org/pub_display.php?pub_id=6686

"Herein lies the evidence of pessimistic outlook of Libertarians, would not justice be achieved if politicians were honorable?"

I don't see how you could view libertarians as being 'pessimistic', but whatever.

"Would not the corporate sway be stymied if politicians rejected their bribes and lobbying?"

Sure.  But will they? No.  You can pass all the laws on lobbying and gift-giving you want, but you have to understand that when government politicians and bureaucrats have the ability to exert power over large corporations who have large amounts of money at their disposal, corruption is simply going to happen.  The money will always find its way into the hands of the politicians, and the corporations will likely always find a way to get it there, to get around the law, etc.  There is quite simply nothing you can do to stop this.  It is just like drugs in the USA - you can't stop them from being used, no matter how many no-knock warrants and civil liberties violations you are allowed.  Anyways, I am getting rather off topic.  The point is is that when you delegate powers to politicians, and the politicians have the ability to use those powers to effect corporations and or the extremely wealthy, you would be very naive to think that the money would be stopped by changing the laws, or otherwise trying to simply stop them from doing it. 

"Would not taxation be truely graduated if loopholes were closed for large corporations?"

Firstly, if we had a flat tax, there would be no problem to begin with. 

Nextly, taxing companies specifically is probly not the best of ideas.  Again, this is going to bring about/encourage the corruption factor, and that aside, it will also likely either put job creating companies out of business, hurt them, hurt the job market, or else just raise the cost of goods you end up buying from them anyways.  In my state, for example, General Motors, one of the major employers, is being pressurized by budget problems within their company to move their factories either overseas, out of state, to canada, or to mexico.  Increasing taxes on General Motors is NOT going to help us, the people of Detroit, Flint, and other cities with GM plants, or the general economy of my state.  General Motors is already in a rather precarious economic situation, and dumping the tax-burden on them will inevitably result in the loss of jobs for the people this company employs.  If GM has higher taxes, it also puts them at a disadvantage in the face of foreign competitors such as Honda, Toyota, etc.  Putting job-creating industries out of business in order to fund ridiculous social-spending programs like welfare, or overseas military adventures is not the solution.  The solution is to lower taxes on everyone, cut out of control government spending (this means cutting off the handouts, the foreign aid, etc), including GM, removing the financial burden, allowing them to create jobs and economically develop in general. 

"Would not federal programs and funding increase if corporations actually started paying their share?"

Sure.  However, once all of GM's employees are out of jobs a few years down the road, that might have negative consequences for the people of this state, and for your precious federal programs and budget.

"But of course, Libertarians will tell you that all politicians are corrupt, excluding themselves, and that the inherent evil nature of man evaporates in the private sector."

First of all, I don't think there are many libertarians who think that man is inherently evil.  I think you are confusing us with socialists.  If man is inherently good, there is clearly less need for a government, and this leads us to libertarianism as a proper government to have.

"Businesses should exist to make money, government should exist to enforce the people's will, and the people's will is the only sovereign power, without it's grace, business would not exist."

And you intend to enforce the will of the people by electing politicians who will then be subsequently bought out by all the major corporations? What an ingenious solution, I wish I'd thought of that...

Alternatively, we could have a free market type system in which the people are free to vote with their dollars, exercising their 'will' by shopping (or not shopping) from a given company.