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| Who is the real burden on society? |
Mitt Romney was one of the worst candidates that the Republican Party could have picked as their presidential nominee in the 2012 election because his company, Bain Capital, often made money by being one of the biggest takers in the country. They would see a company that employed hundreds of people, giving them capital to spend in the community, which created an environment where other businesses could thrive, and where a healthy community could exist. Bain bought some of those companies and took out huge loans on the companies' credit so that they could pay themselves hundreds of millions of dollars in "management fees". Often times the companies could not pay back the enormous loans and the companies went out of business, the workers were laid off and the entire community took a big hit. Even though the Bain people made out quite well, I'm sure some of the workers lost homes and had to resort to unemployment insurance, food stamps and other forms of government assistance to get by. So, who were the takers in this scenario? It seems to me that he laid-off workers had something taken from them and Bain did the taking.
What's worse is that we, the taxpayers, had to pay for Bain's greed/poor management by providing assistance to the workers that were laid off. As for Bain, they got sweetheart tax rates on their profits because--due to successful lobbying efforts--the government has apparently been convinced that their business model is somehow good for the country. It is the new American business model: collect the profits while leaving the taxpayers responsible for losses and the costs of collateral damages.
Of course, Bain is just one private equity (aka "vulture capital") operation. There are others. And there are banks that illegally foreclosed on peoples' homes, banks that invested peoples' life savings and retirement funds in schemes the banks knew were worthless. All so they could make enormous profits and pass on the bill for the damages to the taxpayers. Now, they call anyone who needs assistance as a result of their schemes a "taker" while they enjoy the title of "job creator". And they are appalled when anyone suggests that they pay back some of their ill-gotten gains by way of higher taxes.
I assume that it would be extremely difficult, if not impossible, to figure out a way to fairly raise taxes on just the institutions that acted unethically. But I know that every thinking American would agree that carried interest profits should be taxed at the same rate as workers' wages. There is no stimulative effect to the economy from these special tax breaks and it rewards private equity firms for destroying jobs.
So, do you wonder why the pundits on TV who claim to have our best interests in mind don't scream about this issue and urge you daily to call your representatives to eliminate this subsidy for job loss? Could it be that they are paid millions of dollars to create controversy rather than find solutions to problems? Should we stop getting our information and talking points from them and assess for ourselves what issues deserve our immediate, focused attention? Only if we want to improve our country and economy, I suppose.
~R. Charan Pagan
information systems technologist, musician, writer, filmmaker
Los Angeles, CA 90017
http://www.reclaimingourbirthright.blogspot.com/
What's worse is that we, the taxpayers, had to pay for Bain's greed/poor management by providing assistance to the workers that were laid off. As for Bain, they got sweetheart tax rates on their profits because--due to successful lobbying efforts--the government has apparently been convinced that their business model is somehow good for the country. It is the new American business model: collect the profits while leaving the taxpayers responsible for losses and the costs of collateral damages.
Of course, Bain is just one private equity (aka "vulture capital") operation. There are others. And there are banks that illegally foreclosed on peoples' homes, banks that invested peoples' life savings and retirement funds in schemes the banks knew were worthless. All so they could make enormous profits and pass on the bill for the damages to the taxpayers. Now, they call anyone who needs assistance as a result of their schemes a "taker" while they enjoy the title of "job creator". And they are appalled when anyone suggests that they pay back some of their ill-gotten gains by way of higher taxes.
I assume that it would be extremely difficult, if not impossible, to figure out a way to fairly raise taxes on just the institutions that acted unethically. But I know that every thinking American would agree that carried interest profits should be taxed at the same rate as workers' wages. There is no stimulative effect to the economy from these special tax breaks and it rewards private equity firms for destroying jobs.
So, do you wonder why the pundits on TV who claim to have our best interests in mind don't scream about this issue and urge you daily to call your representatives to eliminate this subsidy for job loss? Could it be that they are paid millions of dollars to create controversy rather than find solutions to problems? Should we stop getting our information and talking points from them and assess for ourselves what issues deserve our immediate, focused attention? Only if we want to improve our country and economy, I suppose.
~R. Charan Pagan
information systems technologist, musician, writer, filmmaker
Los Angeles, CA 90017
http://www.reclaimingourbirthright.blogspot.com/
Bain's job is to save money for companies. Companies are there to sell products that people want. Their job is also to please their shareholders and grow their business. No one starts a business to create jobs or start a social welfare program. And the taxes that they end up paying or not paying is money that Gov didn't earn on their own nor is it taking money that others earned away from them.
ReplyDeleteGE didn't pay any taxes for a few years now and immelt flies with Obama on business trips to China, so Is Obama guilty too? Or is it the tax codes that make it possible? The reason that capital gains tax is lower then income tax is to encourage people to invest their income profits after they had already paid their taxes when the initially earned it in the first place.
ReplyDeleteGE is another corporation that has successfully lobbied government and got their taxes reduced. They also seem to have bought politicians (presumably including Obama, although I have not seen any proof that that is the case) to help them pull off a scheme whereby they do not have to pay federal income taxes and actually got tax rebates from the government. All the while moving US jobs overseas. Jeffry Immelt claims that GE paid 25% but I have not read any article defending that claim. These days, all it takes is a claim to create a controversy and the mainstream media isn't very good at sorting out the facts. Whatever the facts really are, Immelt was a poor pick for Obama to choose as the jobs czar, to say the least. So, yes, Obama is also part of the problem. The point of the article was to contrast the poor "takers" in society with the rich "takers", that don't seem to get nearly as much scrutiny in the media. I'm not sure what Obama and Immelt flying to China together has to do with anything but I wrote a previous post about GE's tax issue and analyzed it in juxtaposition to their advertising campaign. I though the two situations were interesting. I'll try to find the link and post it.
ReplyDeleteI understand the argument regarding capital gains tax, although I don't know that I buy it 100% in all situations. The carried interest tax loophole that I mentioned however has NO stimulative effect on the economy at all. It is tax on profits made by investing other people's money.
I don't understand your comment about Bain's role in job creation or paying taxes but I would ask that you read the article that is linked to in my blog post (http://www.rollingstone.com/politics/news/greed-and-debt-the-true-story-of-mitt-romney-and-bain-capital-20120829). The scheme may make more sense and they definitely were responsible for crushing businesses and destroying jobs. If you watched the moving Goodfellas, it was practically the same scheme that the mobsters used. They acquired a business, ran up its credit to pay themselves a fortune, and when there was nothing left to take, they walked away. The mob's scheme was illegal and the vulture capital model is somehow legal but the result was not good in either case. No company owes jobs to anyone but to make your business model NOT to be about making products that people want (which the companies did) and to be only about extracting wealth for yourself and your shareholders (what Bain did) is not a good situation. The business model we have now is that it is more profitable to bankrupt a company than it is to make it successful. That is a bad business model for the country, no matter how you look at the situation.
This is the link to the GE blog post: http://reclaimingourbirthright.blogspot.com/2012/08/ease-up-on-propaganda-dude.html.
DeleteAfter re-reading it, I like it more than ever!