Tuesday, April 28, 2020

Small Business Devastation Supports Globalist Agenda

The Wuhan Coronavirus has imposed devastating consequences on the U.S. and global economy after unprecedented shutdowns have shuttered broad swaths of the business community.  Notable during this period of draconian quarantine and social distancing mandates are the exceptions for many of the largest corporations at the expense of small and mid-sized business.  The behemoths like Amazon, Walmart, Home Depot, Kroger, and Albertsons flourish and increase market share while small businesses remain closed.  Global media companies like Facebook, Google, Comcast, and AT&T ratchet up censorship and continue to craft a false narrative that understates China’s role in the crisis.  Perversely, they defend China’s efforts to cover up the outbreak which lead to rapid global spread while demonizing the efforts of the Trump Coronavirus Task Force as too little too late.  All of these efforts seek to promote globalism and international institutions, like the WHO, that seek to diminish the global standing of the United States.

While many of the world’s dominant corporations are domiciled in the U.S., their allegiance clearly lies elsewhere.  American taxpayers bailed out automakers like General Motors during the 2008 financial crisis, and GM returned the favor by offshoring production to Mexico and China and shuttering U.S. factories.  Large global corporations use tax arbitrage strategies to shift profits to low tax jurisdictions and lobby for restrictive regulations to squash competition.  They attempt to erect barriers to competition through legislative and regulatory victories funded by lavish political contribution and influence campaigns.  Politicians have embraced crony capitalism, handing out favors like the EB5 visa program to fund real estate projects or the H-4 EAD and OPT visa programs to supply an endless stream of immigrant labor to suppress wages of American workers.  In exchange, global corporations embrace and legitimize the social and environmental policies desired by Democrat activists and politicians in order to give them greater leverage over people with dissenting views.  

Leftist politicians have embraced their authoritarian instincts to limit individual liberties and encourage their compliant corporate partners to censor speech and encourage “approved” behaviors.  By utilizing public fear of the Wuhan Coronavirus, leftists have increased their ability to implement their authoritarian agenda by devastating independent small businesses and buttressing compliant global corporations.  It is much easier to enforce compliance with a social or regulatory scheme if the economy is dominated by a few compliant corporations instead of thousands of privately owned small businesses.  Rather than fight in courts to force small bakers to make cakes for gay weddings, for example, it is much easier to persuade a large chain of bakers to comply with their social policies in exchange for some tax incentives or regulations that squash smaller competition.  Increasing government funding and support of large corporations only strengthens the control that leftist politicians have and greases the tracks as they attempt to enforce limitations on dissenting views.  If you don’t peacock and signal that you are in step with their agenda, you will be economically punished and dismissed as a “Deplorable” that should be ostracized and destroyed.  

We must support our small businesses and local communities to decentralize policymaking and strip the leftist authoritarians of a powerful means of enacting their social and political goals.  One of the most powerful means of protecting your liberties is to support a robust small business community that embraces American values and has a vested interest in a successful local community.  As we open for business, we must fight back against globalist tyranny by supporting local businesses and return to the principles of “Buy American, Hire American”.

Friday, October 27, 2017

Tax Reform: The GOP’s ObamaCare

With the Republican budget narrowly passing in the House, the groundwork is set for the GOP to proceed with tax reform legislation.  The rhetoric emanating from GOP leadership describes an idyllic world of lower taxes for all middle class taxpayers regardless of where they live.  In reality, there will be very significant winners and losers from their plan with middle to upper middle class taxpayers in predominantly high tax blue states suffering the bulk of the burden.

As the Atlantic has reported, residents of 14 states pay more in federal taxes than they receive in federal aid.  Many are states with high state and local taxes such as California, New Jersey, New York, Illinois, and Massachusetts.  The implication of this is that residents of these 14 states effectively subsidize the operating costs of the other 36 states, reducing their need to impose higher state and local taxes on their residents.  Now Republican legislators want to exacerbate this inequity by eliminating federal tax deductibility of state and local taxes, effectively resulting in double taxation of this income. 

Republican legislators distort reality by claiming that low tax states are subsidizing the profligate nature of these largely Democrat controlled states, many of which have comparatively high median incomes and significantly higher cost of living.  In New York City, for example, the NYT reports that the average apartment rents for $3,973 per month and the average price of a home was $1.46 million.  By their calculations, someone in NYC would have to make $166,000 per year to have a similar lifestyle to someone making $70,000 per year in other parts of the country.  This person would already be in a much higher marginal income tax bracket and would likely be struggling to cover the $4000 per month in rent and higher costs of necessities. 

If the Republicans truly wanted to help the middle class, they would look more broadly at the array of sacred deductions.  Rather than deeming mortgage interest, charitable giving, and child tax credits as sacrosanct, they should just cap all deductions at $100,000 per year.  This would effectively limit deductions for the very wealthy while enabling taxpayers across the country to respond to the local circumstances that define their lives. 

Ultimately, the GOP must face voters in 2018.  They should learn from the mistakes of the Democrats in their haste to ram through the Affordable Care Act (aka Obama Care) and realize that a legislative win on purported tax reform may cost them much more than they think.  They should decide if their fragile majorities in the House and the Senate are worth the pound of flesh they seek to extract from the coastal middle class.