September 3rd, 2010
All Original Content Open Source & Copyright Free
Corporations Fail in America
If done effectively, a restructuring of the corporate tax laws in the U.S. would bring growth, sustainability, investment and jobs.
Obama’s Labor Board Targets Dana Corp. Ruling that Allows for Secret Ballot
Craig Becker warned everyone that the NLRB would overturn the secret ballot for unionization elections. Now it looks it may actually happen.
Out of Context, Out of Line
Nevada Democrat Congresswoman Dina Titus levels false charges against her opponent, challenger Joe Heck.
Las Vegas Review Journal: Reid and the jobless
“Is Angle really so 'extreme'?”
Corporations Fail in America
By Rebekah Rast
“Our federal tax system is, in short, utterly impossible, utterly unjust and completely counterproductive, [it] reeks with injustice and is fundamentally un-American... it has earned a rebellion and it's time we rebelled.”—President Ronald Reagan, May 1983, Williamsburg, Virginia.
The government’s answers to America’s problems are to spend and tax.
It is easy to see the results of those tactics: less productivity, limited competition, fewer jobs and a sinking economy.
These negative results not only affect individual citizens, but America’s corporations as well.
America’s corporate tax rate sits as the second highest in the world at 35 percent; second only to Japan, which is currently in the process of lowering its tax rate.
Though individual taxpayers might not be bothered that corporations in the U.S. face such a high tax rate — in fact, many might be in support of it as some corporations that conduct business internationally pay different rates. But the truth is, the corporate tax rate should be of concern to all American citizens.
After all, who do you think corporations pass their taxes on to?
“The corporate tax doesn’t tax corporations, but taxes people. The corporations pass them down,” says Bill Thomas, former Chairman of the House Ways and Means Committee, the tax law writing committee of the House of Representatives.
That alone should make people think that America’s corporate tax rate should be cut. Not only are citizens picking up the costs, but having a high corporate rate makes America much less competitive compared to all other countries.
America tacks on a tax on products that come in and out of the U.S. Most other countries subsidize or have an allowance for their products so they aren’t double taxed.
“We are at a disadvantage with every country with whom we import/export,” former Chairman Thomas says.
Because America’s tax system includes a form of double taxation on products, consumers are often faced with a choice: if you see a German product on the shelf for $5 and the same American product on the shelf for $7, which one are you more likely to purchase?
“The effect is double taxation,” says Johanna Schneider, executive director of external relations for the Business Roundtable. “You have to level the playing field, compete head to head on products.”
Of the 187 corporations at Business Roundtable, more than 95 percent of them conduct business overseas. America would do best to follow the corporate taxation models of other countries so it can be a viable competitor in today’s world.
But instead, Congress passed a new tax package for multinational corporations. This legislation diminishes the actions in the tax code available for U.S. businesses abroad, therefore not allowing them to minimize their tax burden.
“It denies the ability of U.S. organizations to take tax credits,” Schneider says. “This reduces the returns to the U.S.”
Congress wanted to ensure that corporations pay their fair share of taxes into the treasury, but instead they are punishing these businesses.
“The goal of all policy makers is to make the U.S. competitive, yet one of the most uncompetitive laws is the corporate tax,” Schneider notes. “U.S. companies are penalized for bringing money back into the U.S.”
The international tax code is complicated and confusing, much like the U.S. tax code. Thanks to recent action by Congress, this new law on multinational corporations will make it even more complicated.
“They are trying to get money out of multinational corporations,” says former Chairman Thomas. “If they start taking too much then it is not advantageous to the U.S., but detrimental to the U.S.”
By taxing corporations in the U.S. at a higher rate it effectively impacts investment in the country. Schneider says that upwards of 50 percent of revenues in the U.S. come from outside the country. Furthermore, 90 to 95 percent of customers in the world are outside the U.S., she goes on to say.
If the U.S. takes on the highest corporate tax rate in the world, it will be detrimental to the growth, employment and the economy of the country.
“There is a real penalty on investments being done in the U.S.,” says Alan Viard, resident scholar with American Enterprise Institute (AEI). “We are really behind the curve on this when our solution is higher taxes.”
Many countries around the world have lowered their rates from an average of 38 to 27 percent from 1992 to 2006. Under President Reagan, the U.S. corporate tax rate went from 46 to 34 percent, which greatly helped America’s competitive positioning. But in 1993, President Clinton bumped the U.S. corporate tax rate back up to 35 percent, while other countries around the world were working to lower their tax rates.
“The corporate tax rate is harming competition,” says Scott A. Hodge, president of The Tax Foundation. “It should be moved from its current rate which is 35 percent to 20 percent.”
Viard notes that America’s high corporate tax rate doesn’t help with the current high levels of unemployment either.
“It won’t bring jobs home to the U.S.,” he says.
Former Chairman Thomas adds, “If you want to encourage and influence behavior you put credits and tax cuts on it.”
Americans for Limited Government (ALG) President Bill Wilson notes, “If you want to discourage activity you raise taxes. It is particular ironic that this supposed job-focused Obama Administration is raising taxes on some of our nation’s job creators.”
Like personal income taxes, the more people have to pay, the less likely they are to invest or save. Corporations work the same way.
America’s leadership needs to decide if the country is going to dive off the cliff economically or take a few steps back and work to encourage growth and business investments back into the system. America is soon becoming the country with the highest corporate tax in the world. This will do nothing but stop corporations from doing business in America, meaning less revenue, jobs, competition and capital.
There is an urgent need for growth in America. If done effectively, a restructuring of the corporate tax laws in the U.S. would bring growth, sustainability, investment and jobs.
America has seen the ineffectiveness of “Obamanomics.” Maybe it’s time for “Reaganomics” to make a comeback. President Reagan was the last to lower the corporate tax rate in 1986. It is one tax law out of many that deserves to be revamped.
Rebekah Rast is a contributing editor to Americans for Limited Government (ALG) News Bureau.
Obama’s Labor Board Targets Dana Corp. Ruling that Allows for Secret Ballot
By Kevin Mooney 
President Obama’s labor board is now positioned to overturn the landmark 2007 Dana Corp. decision that allows workers to vote out via secret ballot a union that was recognized through the card check process.
This week the National Labor Relations Board (NLRB) announced it has merged two cases, which involve union lawyers with the USW and UFCW who are seeking to overturn Dana ruling that allowed for employees to demand a secret ballot election within 45 days after a union obtained monopoly bargaining status through a card check campaign.
In the USW case, the same Foundation attorneys who originally won the landmark Dana case are providing free legal assistance to Mike Lopez, an employee of Lamons Gasket Company in Houston, Texas, who filed the decertification petition when at least 30 percent of employees in the bargaining unit supported the election. Consequently, there is good reason to doubt that the card check vote accurately reflected workers’ support of the union.
Workers have already used the Dana precedent to demand secret ballot votes and kicked out unwanted unions. Here’s a video report about some Dana Corp. employees in Albion, Indiana who did just that.
Many of the workers say they only signed the cards in response to union organizers visiting their homes not out of a genuine sense of conviction.
“While President Obama and members of Congress continue to push for a federal bill that would end the secret ballot in workplace unionization drives, an obscure federal agency stacked with union lawyers is poised to eliminate the private vote for workers who have been subjected to unreliable and coercive card check campaigns,” Foundation President Mark Mix said.
One of the lawyers who agreed to review Dana is Craig Becker, a controversial recess appointee who is also former legal counsel to the SEIU and AFL-CIO. As a lawyer with the AFL-CIO, Becker cosigned a joint AFL-CIO/UAW brief in the original Dana case; yet he is now in a position on the quasi-judicial agency to overturn that very decision.
A similar challenge by union lawyers to Dana that has not been consolidated into this review involves Service Workers United, an SEIU affiliate. Earlier this year, Foundation attorneys asked Becker to recuse himself from cases involving SEIU local affiliate unions. Becker responded that he must only recuse himself from cases involving the national union. The Foundation’s vice president and legal director Raymond LaJeunesse, Jr. sent a letter to Attorney General Eric Holder in August asking him to investigate whether Becker is in violation of his Obama Administration ethics pledge for participating in cases involving SEIU affiliates.
While that question remains unsettled, it appears Becker and the two other former union lawyers currently comprising a majority on Obama’s labor board designed the review of Dana to exclude the pending SEIU case so Becker could avoid the ethics problem and still rule to overturn Dana.
None of this should be surprising. According to a report by Americans for Limited Government (ALG) published prior to Becker’s recess appointment, Becker has previously written that “The [National Labor Relations] Board should return to the principle that a union election is not a contest between the employer and the union... Unlike the other proposals, however, it could be achieved with almost no alteration to the statutory framework.”
According to the ALG report, “This unilateral imposition of his views regardless of Congressional approval may apply to Card Check legislation as well.” Now it looks like it may actually happen.
It’s also worth noting that it would be quite rare for the Board to decide important cases like this without at least 3 votes in the majority. If Becker were to actually recuse himself from the Dana review, the vote to overturn Dana would likely be 2-1. This would explain why it’s important for the union lawyer majority on the Board to keep Becker on the case.
Kevin Mooney is a contributing editor to Americans for Limited Government (ALG) News Bureau and the Executive Editor of TimesCheck.com.
Out of Context, Out of Line
You know the campaign season is heated up when politicians resort to the age-old dishonest tactic of misquoting their opponents. Apparently, when the establishment cannot debate challengers on the substance, it instead debates straw men — misleading the American people and wasting everyone’s time.
Take the latest example of Nevada Democrat Congresswoman Dina Titus, whose campaign saw fit to pull out of context the quote of her opponent, Nevada State Senator Joe Heck.
Heck said, “"The role of Congress is not to create jobs, it is to set the conditions under which the private sector creates jobs.” So, government should get out of the way, and let the private sector do what it does best.
Heck continued, further confirming this point, “And you do that through a stable, fair, predictable tax base, you do that by not pursuing onerous regulations on small, medium and large businesses. And that is where we need to get back to, that limited government that sets the conditions for the private sector to thrive.”
But the only part of the full quote that survived the ad that the incumbent Congresswoman used was “The role of Congress is not to create jobs”. The clip stops there, and then the narrator says, “Sen. Heck doesn't get it.”
Actually, he does. Heck wants government to lower taxes and repeal regulations that prevent businesses from expanding and creating more jobs. Congresswoman Titus, on the other hand, voted for the jobs-killing ObamaCare and the Waxman-Markey legislation capping carbon emissions and increasing energy prices.
Titus has doubled down on her quoting out of context, again saying of her opponent, “He says it’s not the responsibility of Congress to create jobs and I believe it’s very important for Congress to create jobs, especially when unemployment rates are so high.”
As if that was not enough, the ad said "Heck signed a pledge to protect tax loopholes giant corporations use to ship our jobs overseas," citing an Americans for Tax Reform (ATR) pledge. Only, the ATR pledge has nothing to do with jobs being shipped overseas, it’s a pledge against raising taxes at all.
But the malicious campaign does not end there. As reported by the Las Vegas Review Journal, “The American Federation of State, County and Municipal Employees has spent about $700,000 on ads that recycle a dubious claim that says in the legislature Heck voted against a vaccine for cervical cancer and that he wants to privatize Social Security.”
Only, reports the Journal, it’s not true: “In reality Heck voted against a mandate requiring health insurance providers to cover a specific brand of vaccine against HPV, which can be a precursor to cervical cancer. And his Social Security plan involves a proposal to allow new enrollees to choose how their money is invested, while keeping employer contributions in the current system. The new enrollees could also keep their money in the current system if they wished.”
There’s no indication yet if the misleading claims against Heck will have any impact. But it does show the lengths the establishment will go to in order to keep a hold of power.
Robert Romano is the Senior Editor of Americans for Limited Government (ALG) News Bureau.
ALG Editor’s Note: In the following featured editorial from the Las Vegas Review Journal, Sharron Angle’s basis of criticizing the perpetual extension of unemployment benefits is being validated by the evidence:
Reid and the jobless
Is Angle really so 'extreme'?
It was only five weeks ago that GOP Senate hopeful Sharron Angle was subjected to a public flogging for being "insensitive" to the unemployed.
Not only did Ms. Angle say she would have opposed a July Senate bill extending federal unemployment benefits to 99 weeks, she also said that some recipients of jobless benefits were part of a "spoiled" culture of entitlement.
Her Democratic opponent, unpopular Senate Majority Leader Harry Reid, jumped all over the comments, as did his many stenographers in the local punditry class. Ms. Angle apologized for using the word "spoiled."
But the potential damage continues.
On Tuesday, the Reid camp unveiled its latest TV hit piece on the challenger, trotting out the "spoiled" quote to continue the theme that Sharron Angle is "too extreme" for Nevada on economic policy.
Ms. Angle's comment is obviously fair game. The candidate has nobody but herself to blame for her choice of words.
But if Sen. Reid really wants a debate over Ms. Angle's view on unemployment insurance, he'd better be careful what he asks for.
On Monday, Robert Barro, an economics professor at Harvard, penned a commentary for The Wall Street Journal headlined, "The folly of subsidizing unemployment." Mr. Barro notes that "it is reasonable during a recession to adopt a more generous unemployment insurance program," but that extending payments to almost two years is unprecedented and has created a "welfare program that resembles those in many Western European countries."
In fact, Mr. Barro argues that the high percentage of long-term unemployed today -- a number higher than any time since World War II -- is a direct result of this generous benefit extension. "My calculations suggest," he writes, "that the jobless rate could be as low as 6.8 percent instead of 9.5 percent if jobless benefits hadn't been extended to 99 weeks."
Mr. Barro's essay appeared just a few weeks after Jeffrey Miron, director of undergraduate studies in the department of economics at Harvard, noted in a TV interview that extended benefits serve as an incentive for some workers to be more selective and thus to stay on unemployment "for extra weeks or months ... for a little bit longer."
Nor does Mr. Miron buy the argument that unemployment benefits stimulate the economy, noting that the checks are generated by taxpayers who no longer have that money to spend themselves. Compassion for the unemployed is fine, Mr. Miron argues, but, "At what point do we say we have to put aside compassion and worry about efficiency and worry about giving people stronger incentive to go back to work, even if it's not the job they'd most prefer?"
It may shock progressives to learn this, but such sentiments are not "extreme," they are solidly in the mainstream of economic theory. Maybe Ms. Angle isn't such a dangerous radical after all to suggest that extending unemployment payments in perpetuity can be counterproductive and create more dependency.
Meanwhile, we have little doubt Sen. Reid is a friend of the unemployed. That's why he and his bosses in the Obama administration have been working furiously over the past 20 months to create so many of them with their high-tax, big government, job-killing agenda.
