Whom to tax for infrastructure?

The fed tax on gas was last raised 25 years ago. Should it be raised now to pay for infrastructure? I don’t know.

Koch network asks Trump not to raise gas tax for roads

koch

I think it’s a regressive tax that hurts the poor, working poor, and middle class.

Some arguments I’ve heard for it are that it’s fair because it taxes those who use the roads equally regardless of income, but is that really true?

What about businesses like Walmart, Amazon, Apple and so many others and all the other businesses who are part of global supply chains? Wouldn’t they all would be dead without a safe, reliable, and ubiquitous infrastructure of seaports, airports, railways, and highways? Aren’t they reaping benefits – much greater benefits monetarily – from our infrastructure than the average American?

It seems that I actually find myself agreeing with the Kochs that the gas tax shouldn’t be raised; however, I suspect that we have different reasons for opposing it.

Which brings me back to the question of how do we fund the desperately needed repairs – and maybe even expansions – to our infrastructure?

I was thinking that a tax on corporations and a tariff on imports that use our infrastructure they so desperately need to sustain their business would be the more fair and equitable approach.

But, that seems impossible given that Republicans are in charge and doing just the opposite.

If I understand it correctly, their tax changes permanently reduce corporate taxes while only temporarily reducing taxes on average citizens. Business 1; Citizens 0

And that stalwart and defender American business, the U.S. Chamber of Commerce? Oh, yeah. They like the idea of a gas tax increase. Why wouldn’t they? They work for business – and don’t fool yourself, they work for BIG business, not the fabled “mom & pop”. To believe that what they do that’s good for business is always good for workers is to believe the lie of trickle-down economics.

So, now what?

The Economics and Patriotism of Infrastructure Jobs Programs

Infrastructure map courtesy of The Atlantic

The Economics and Patriotism of Infrastructure Jobs Programs

America’s crumbling infrastructure is both a safety hazard and a drag on our economy that is projected to only get worse. If we’re going to tackle the really big challenges of government budgets, deficits, debts, and the economy, then every citizen must understand the realities of what a deteriorating infrastructure means to this country. We then need to demand that our elected leaders stand strong against austerity and, instead, do whatever it takes – including raising taxes on corporations and the wealthy – to improve our infrastructure.

Properly-funded federal and state infrastructure improvement jobs programs would produce immediate and lasting benefits, including but not limited to:

1) Putting large numbers of Americans back to work in good paying middle class jobs which would immediately boost the economy from the bottom up (since trickledown economics has proven to, once again, be an unmitigated and disastrous failure)

2) Making all of us safer and less vulnerable to infrastructure inefficiencies, failures, or acts of terrorism

3) Demonstrating to American companies and to the world a sense of patriotism that includes spending public funds on the infrastructure that is so vital to our economic and commercial success

Putting patriotism and safety issues aside for the moment (although I don’t know why we should), the sheer impact to our economy and our own selfish financial interests are at stake. This is usually motivation enough for most Americans to demand action from our politicians.

I think it ought to be more than just self interest. Americans have become the experts at professing their patriotism at every opportunity. We’re known the world over for our self-proclaimed exceptionalism. It’s why I believe that we ought to be thinking about and talking about funding the repair and expansion of our infrastructure as one of the most truly patriotic things we can do for ourselves and our country.

First, the economics. Math, after all, doesn’t require an emotional investment or belief system. It just is.

The Economics of Infrastructure

In his blog post, “Crumbling Infrastructure Has Real and Enduring Costs,” William A. Galston of the Brookings Institution points out that a study by the American Society of Civil Engineers projects that, “…by 2020, if the mounting investment gap in infrastructure is not addressed, ‘the economy is expected to lose almost $1 trillion in business sales, resulting in a loss of 3.5 million jobs . . . the cumulative cost to the U.S. economy will be more than $3.1 trillion in GDP and $1.1 trillion in total trade.'”

He also tells us that the Building America’s Future Educational Fund report reveals that a lack of a national infrastructure plan puts a serious drag on our economy. The example he cites is “…in 2010, Americans spent a total of 4.8 billion hours stuck in traffic, wasting 1.9 billion gallons of fuel, at a total cost of $101 billion.”

Let these numbers sink in.

$1 trillion – that’s a ‘1’ followed by 12 zeros; $1,000,000,000,000 – in LOST BUSINESS SALES and 3.5 million lost jobs in just 7 years.

$101,000,000,000 wasted sitting in traffic in just one year.

So in addition to patriotism and public safety, do we as Americans really want to waste greater and greater amounts of time, energy, and money sitting in traffic or waiting for delayed flights and trains?

Do you want to waste even more of it in the future?

Do you want American businesses to forego realizing ONE TRILLION DOLLARS in sales between now and 2020?

If not, then ask yourself how or why we ought to buy into Paul Ryan’s thinking that what’s needed most right now is greater austerity.

His budget – which unless I’ve missed it still seems to be the GOP’s position, too – proposes we spend $78 billion, or 25% less, on infrastructure than the White House’s proposed budget of $104 billion per year over the next decade. According to Galston and some think tanks, the White House’s budget is already less than one-half of what’s needed to repair our infrastructure, and yet Ryan would have us believe we need to spend even less.

How does that solve the problem? I simply cannot believe there’s that much waste and, true to form, Ryan still is unwilling or unable to offer any substantive details.

So as far as the economics go, one would think that numbers like the lost sales, lost jobs, trade imbalances, and lost productivity would be enough to rally the public *and* the business community to demand that something be done immediately to repair, improve, and expand our infrastructure. It’s not like there aren’t precedents to follow with proven outcomes. We – meaning the government hiring both workers and outside companies as contractors – have done big infrastructure projects before.

It took courageous leadership in government to get those projects moving. The private sector was and still is the beneficiary of that leadership. Where is it now?

No, You Didn’t Build That

With all due respect and admiration for the courage and creativity of entrepreneurs and captains of industry everywhere, I remind you that, “NO, YOU DID NOT BUILD THAT!”

You just get to benefit from it. The nation’s infrastructure is, without question or doubt, part of the reason for any commercial success and, hence, at least part of the resulting wealth that’s made possible in America for those who want to start, run, and work in the private sector. Trust me; I’m your fan and one of your biggest cheerleaders. I just think it’s time that you and your followers put your copy of Atlas Shrugged down and join the rest of us in the real world.

Business people everywhere – from the titans running multinational corporations to the small business owner on Main Street struggling to compete with Walmart – owe it to themselves and their self respect to please stop this self-indulgent and self-serving love affair with the Randian mythology. It’s tedious and tiresome and, truthfully, a complete fantasy. Where would you be if your workers quit tomorrow, and when was the last time you built a bridge, an airport, or an electrical power station?

To the business people busying themselves complaining endlessly about the government, please stop your childish whining and please start acting like real leaders. You can start by acknowledging that if you’re going to continue to benefit from everything a democratic society has to offer – including infrastructure – then you are going to have to pay for it. That’s how capitalism works, right? Payment for goods and services rendered?

Yes, I know that means higher taxes than the historically low taxes you pay now. The only sympathy you’re going to get are from fellow wealthy individuals and the people you’ve duped into believing in another fantasy – trickle-down economics.

Look, if your business cannot survive an increase in taxes and the closing of loopholes, well then maybe you’re not such a successful business person after all. Don’t feel bad. Lots of people have tried and failed more than once, including yours truly. It’s what makes me your cheerleader. I know how hard it is. We both know that there are no guarantees, but I will say this; never once did tax obligations figure into my thinking or have any impact on my results.

Real entrepreneurs don’t let things like taxes get in their way; they don’t use them as a lame excuse for not trying, nor are they the cause for why one tries and fails. Only someone who has never started a business would believe such a thing.

It’s only in bad novels by Russians with absolutely no economic credentials where real entrepreneurs give up and disappear because they were somehow defeated by government or society.

To the average citizens who rises in Randian defense of all things private and corporate, including infrastructure, I’d like to ask you a few questions.

How well do you feel you understand the profit motive and the demands it places on the business managers to maximize revenues and minimize expenses?

Have you really thought through what it would be like living in a country where every other river crossing or highway exit extracts a toll from us that goes only to a corporation and their shareholders?

If you have thought about it and you do want to see infrastructure privatized, then I would like to hear how and why you believe that the corporation collecting your tolls will forego maximizing profits and, instead, do what’s best for the nation and for the local community once they’ve built their monopolies modeled on Matty Moroun and his Ambassador Bridge?

It all comes down to money, of course, and, like it or not, it takes money to fund a democracy.

So here we are. We’ve arrived at a point in our political and societal evolution where, hyperbole and ignorance of the facts notwithstanding, American corporations, wealthy individuals, and their toadies in the GOP continue to foist upon us their strategy of fear, uncertainty, and doubt – along with unhealthy doses of outright lies – to keep us at bay and living in fear that they’ll abandon our shores if they can’t keep – and even reduce further – their already historically low tax obligations when they do pay any taxes at all. (Yes, I’m looking at you Mitt Romney, GE, and the rest of you uber-rich individuals and corporations paying very little taxes or actually getting tax refunds.)

The message from Big Money America and the GOP is clear: they are completely and utterly devoid of care or concern for this country and its citizens outside the now well-known 2%.

Where’s The Patriotism?

Galston reminds us that we’ve pulled together as a nation under both Democratic and Republican administrations before to do big infrastructure projects. We’ve done what’s been needed before. We can do it again.

A federal (and state) infrastructure program now would put lots of people to work. In addition to safer and more efficient infrastructure, big and bold new projects – hell, even repair and rehabilitation projects – would mean lots of decent paying middle class jobs for Americans. That is exactly what is needed right now to get the economy growing faster and better. What we don’t need and can’t afford is more austerity and more of our fellow citizens left with little choice or opportunity outside of working in retail or the fast food industry.

We need a sense of patriotism.

Federal infrastructure projects are patriotic and need to be talked about as patriotic. They are physical and enduring evidence of the love and devotion we should have to our country and to each other. Our society simply cannot operate without infrastructure, so programs to repair and improve it is service to our country, isn’t it?

Since the days of the Erie Canal, infrastructure projects have proven to deliver huge economic and societal benefits both at the time they are undertaken and for generations to come. We Americans need to remember this every time we merge onto an interstate, get on a train, board an airplane, turn on our lights, or buy bananas in January. None of that is possible without infrastructure, and that infrastructure was built by Americans for Americans.

Our roads, airports, railways, and sea ports have become too small, too old, and crumbling too quickly after decades of use for us to stand by and let it happen. They’re more and more unsafe and, for all the true capitalists out there, it’s a drag on our economic vitality and growth that will only get worse unless we do something about it.

And when it comes to defining what it means to be an American, letting our infrastructure deteriorate turns us into a second-rate first-world nation. It’s an embarrassment and a shame on all of us. We’re always making lots of noise about being number 1. I don’t know about you, but I never hear any Americans proudly proclaiming, “We’re #33!”

It’s time to show some real patriotism outside of military excursions. It’s time for Americans to rally together to demand that our elected officials put us to work fixing and rebuilding America’s infrastructure.

It’s good for us citizens. It’s good for business. It’s good for America.

Sounds like patriotism to me.

Sources:

(1) Galston, W. (2013, January 23). Crumbling Infrastructure Has Real and Enduring Costs. http://www.brookings.edu/blogs/up-front/posts/2013/01/23-crumbling-infrastructure-galston?cid=em_alert012813

(2) Plumer, B. (2012, March 30). What Paul Ryan’s budget actually cuts – and by how much. http://www.washingtonpost.com/blogs/wonkblog/post/what-paul-ryans-budget-actually-cuts–and-by-how-much/2012/03/20/gIQAL43vPS_blog.html

(3) Berfield, S. (2012, May 3). Matty Mouron, Detroit’s Border Baron. http://www.businessweek.com/articles/2012-05-03/matty-moroun-detroits-border-baron

The Invisible Hand Wants More Hand Outs

The New York Times published an article on December 1 titled As Companies Seek Tax Deals, Governments Pay High Price.

It ought to disturb everyone who isn’t in the 1%. To begin with, it should have been “Citizens” instead of “Government” as we’re the ones who pay the price.

We should all be disturbed by the amount of public money being extorted by companies from all levels of government. They can do this, in my opinion, because we let them.

How do we let them? I think it begins with the fact that too many of our fellow citizens are quaffing copious amounts the Randian Kool-Aid-turned-Tea-Party-tea that’s being served up so generously by the high priests and priestesses who worship The Invisible Hand from inside the GOP, from within their broadcasting company, Fox, their newspaper publisher, The Wall Street Journal, and from all the their faithful followers.

It seems clear to me that big money, politics, and business have combined into a force the likes of which none of us has seen in our lifetimes. The level of concentrated wealth and power is all but incomprehensible (who among us really understands what a trillion dollars is?), and we and our progeny will be the ones who pay the tab when The Invisible Hand brings it to our table for all the blind, willful, and excessive drinking we’re doing now.

I do believe there’s something we can do about it.

I think it starts by voting for progressive people who will truly represent ordinary citizens and then demanding real representation and leadership from those elected officials; from city councils on up through the president.

I also think we citizens need to present calm, rational, and most of all, vocal objection about the imbalance, inequity, and unfairness to each other and to our elected officials. They do, after all, work for us. It’s incumbent on us as citizens to hold them accountable. They need to know that we’re not going to tolerate – or vote for them – if they continue to offer sweetheart deals to so-called “job creators” who don’t create jobs and who, in the end, only bankrupt us and our governments.

Could it be that part of the reason governments at all levels can’t balance budgets includes expenditures like the $80 billion (yes, billion with a ‘b’, as in bull****) a year that’s being given away in incentives? If these incentives are so effective, shouldn’t we be asking corporations (and mostly the big ones) where are the jobs?

(Let me hasten to say at this point that I have nothing against corporations, profits, or wealth. I don’t begrudge anyone their hard-earned and honestly-achieved wealth. I’m not a socialist (ok, maybe I am just a little), and I’m certainly not a fascist or a communist. I’m registered non-partisan, have never held elected office, and have never been in a union. As of today, I’m an unemployed sales and marketing executive who wants to work and who cares enough about how this impacts his family, his neighbors, our society to take time from job searching to post this.)

Make no mistake. Politicians are just as culpable as corporations in this mess.

As this NYT article points out, politicians tend to be weak negotiators who have the unenviable task of having to convince us in the simplest terms and most expeditious way possible every few years to reelect them back into their jobs. Some (and for the more jaded among us, maybe most) politicians seem to behave in such a way most of the time as to convince us that they’ll say and do just about anything to win their jobs back.

Is it any wonder that they will do a deal – even bad deals – with a corporation just to stake the claim to have brought jobs to their constituents? It is worth wondering about only if we don’t pay attention to the deals they’re cutting and then don’t hold them accountable to what we value in addition to a job.

And therein rest their defense for their actions. We don’t pay attention, we stay silent, and we seem willing to accept any condition so long as there’s the promise of employment.

Politicians know that we seem, on the whole, to not pay very much attention. They know lots of us can be pretty easily duped into believing almost anything. What other explanation is there for the viewership of Fox News and movements like the Tea Party, birtherism, and climate science deniers?

Politicians can remain confident that we’ll be too distracted by The Walking Dead, Dancing With The Stars, and the latest South Korean music video on YouTube to pay attention to what they’re doing. They know most of us will keep getting our information from the talking heads screeching the loudest at us from inside our self-imposed information bubbles. (Yes, I’m looking at you, Fox News viewers.)

Most of us can be counted on to look at the so-called collaboration between government and corporations through a short-term lens, and to then heap praise (and votes) upon our elected officials for ostensibly working in partnership with the private sector to create new jobs.

The irony is this.

The Invisible Hand of the free market isn’t concerned with real partnership. It’s about winners and losers. That cannot be what’s best in these “partnerships” between private companies and the public sector. Just consider these factors:
1. There are no contractual and legally binding obligations on the part of the corporation, and there’s no recourse to recover our “investments” should the venture fail
2. There’s no assurance as to if and when those jobs will actually materialize
3. There are no promises that any job will actually pay a living wage or how long it will last
4. There appears to be little scrutiny of the corporation’s past behaviors or results in these matters
5. No one seems to be examining or considering if the facts and evidence show whether or not those jobs would have been created without the incentive

And, since when did The Invisible Hand need incentives from government?

To compound the challenges and as the New York Times article points out, elected officials are ill-equipped to negotiate. They are basically held hostage by corporations. We go on about our lives oblivious to the tabs our politicians are running up for us and what could have been done with those corporate welfare funds.

               “The practical consequences can be easily seen. The Manhattan Institute for Policy Research, a conservative group, found that the amount New York spends on film credits every year equals the cost of hiring 5,000 public-school teachers.”

I understand and, yes, even appreciate and applaud the basic tenants of capitalism. I understand that corporations have an obligation to shareholders first and foremost. I don’t deny nor argue that they ought not to consider and pursue the deals that are best for them and their shareholders. The problem I have is when those decisions about how best to maximize profit are made without concern for the moral, ethical, and economic consequences to us as citizens and to society at large. Profit cannot and should not be the only consideration by people who run companies. We’re all in this together.

Again, it’s not only corporations at fault. They have a duplicitous partner in this dance.

Ill-equipped and out-matched government officials not only are manipulated by corporations they are actually competing with one another to see who can give away the most money to attract the corporations.

Think about that. Our elected officials are negotiating against each other to see who can “win the business” with corporations by giving away the most money – our money – while they get nothing that’s legally binding in return.

               A group of taxpayers in Michigan and Ohio went as far as suing DaimlerChrysler after Ohio and the City of Toledo awarded the automaker $280 million in the late 1990s. The suit argued that it was unfair for one taxpayer to be given a break at the expense of all others.


              The suit made its way to the Supreme Court, and G.M. and Ford signed on to briefs supporting Daimler, as did local governments. The National Governors Association warned the court that prohibiting incentives could lead to jobs moving overseas. “This is the economic reality,” the association said in a brief.

              The governors offered no hard evidence of the effectiveness of tax credits, but the Supreme Court did not consider whether they worked anyway. In 2006, the court concluded that the taxpayers did not have the legal standing to challenge Ohio’s tax actions in federal court.

         
There’s only one way this can go under current circumstances. Unchecked and unchanged, the bidding will be won by whatever community is willing to give away the most with almost nothing assured in return. And, whose money is it? Yours and mine.

I don’t claim to understand every detail and all the nuance. What I clearly don’t understand is all the anger and rancor coming from anyone outside the 1% in America about the role of government. They seem intent on allowing themselves to be guided by what they perceive to be the benefits of The Invisible Hand and all that will trickle down to them. Is there another explanation for why some of us appear to have elevated corporations to some pretty lofty status while simultaneously vilifying government at all levels?

It makes wonder how it is that so many people who claim to want smaller government and cuts to social programs seem to be the very same people who….

…Rail against today’s tax rates – which are at historic lows – but don’t complain about their tax dollars subsidizing corporations

…Complain about their tax dollars being spent on social programs that benefit the so-called “takers” at a time when unemployment is still too high, the wealth gap is at levels not seen since the Gilded Age of the robber barons, corporations are enjoying record profits while they get more and more government handouts, and yet those magnanimous “job creators” don’t seem to be creating many jobs

…Despite corporate welfare, believe that government interferes too much with business despite the fact that regulatory bogeymen like the SEC and EPA have been progressively stripped of their oversight authority

Why isn’t there more outrage about corporate welfare from the people who so strongly believe in free market forces and less government?

And, why aren’t all citizens demanding that our elected officials work on and pass legislation to simplify THOSE tax codes first so that corporations pay their fair share like the rest of us?

After all, aren’t corporations and the people who work for them part of the society in which we all live?

Don’t employees, managers, stakeholders, customers, and suppliers all benefit from a government that educates our children, is responsible for public safety, infrastructure, and the like?

(And by the way, no, you corporations did NOT build public education, infrastructure, police forces, fire stations, etc. Good thing, too.)

So, the over-arching question I’m asking is this. What’s with all this requirement (extortion, really) for tax breaks and incentives to be given to corporations in order for them to compete?

Isn’t The Invisible Hand enough…..or can’t they make it without hand outs?

What is Romney Hiding?

http://www.cnn.com/2012/07/18/opinion/kleinbard-canellos-romney-tax/index.html?hpt=hp_t1

I don’t understand why he’s refusing to release more tax returns unless what they reveal is worse than the price he’s paying and will keep paying for his reluctance to do what every other candidate has done starting with his own father.

Reagan–No Loopholes For Millionaires

So if the holy man of the GOP said it, and the holy man of the Democrats (who ain’t so much what was hoped for after all) is saying it, how come the resistance is almost exclusively from just one side?

Hint: It has nothing to do with facts.

59 seconds of undeniable reality at http://youtu.be/cgbJ-Fs1ikA