Bringing Back US Jobs from Offshore -- Greed Is the Answer!
"Corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed."
Who do you think said this? Could it be: Barack Obama? George Bush? Ronald Reagan? Sean Hannity? Whoopi Goldberg, Katie Couric? If not the famous, then who? Tom Stites, the author of one of my sources for this piece thinks that the inflammatory rhetoric may "sound like a protester railing against the World Trade Organization?" Then he inquires as I just did in these words:
"Think again. These are the words of a successful corporate lawyer who represented railroads before becoming President of the United States. They resonate for many people in this era of Enron, when huge hot-stock corporations have cooked deals with the aid of their auditors and Wall Street bankers to enrich executives at the expense of their employees and shareholders, when corporate lobbyists and campaign donors so often have their way despite the interests of the voters, and when Federal Reserve figures show that the top 1 percent of U.S. households controls 38 percent of the nation's wealth. But these words... But these words were written in an 1864 letter, by Abraham Lincoln."
"Today, Lincoln's prophetic letter turns up more than 1,100 times in an Internet search, largely in writing that provides evidence that concern about corporate power is spreading rapidly—even though the issue is far from popular in our corporate-owned news media."
By the way, just because at this moment in time, I am not damning the "efforts" of the federal government does not mean there is not major culpability. The combination of the government and corporations is worse than either alone/ This is known as corporatism. Without this teaming of the wicked, offshoring would never have been an issue and by severing it and by giving back control to the people, offshoring can end. The simple fact is that somebody has to want it to end, and I am not talking about just John Q. Public.
Yes, I did use the "G" word in the title for this essay. Greed hath no bounds. If nobody ever said that, please credit me but I think I am not alone. Corporations said "to hell with American citizens who support us and provide us a nice cushy place to live, and they protect us, and well, we're tickled we get it all, but we want it all." They say it again every time they send just one job overseas.
My best friend Dennis Grimes, whose last name ironically begins with a "G," says that "in an election, people think with their stomach." No student of logic would believe the people would ever put thieves back in office yet it happens all the time. Why is that? I surely did not know the full answer but I had ideas. Dennis was there to advise me and now I too know: "in an election people think with their stomach."
My opportunities for gaining the nomination of the Democratic Party for the US Senate in pennsylvania are compromised because, as Dennis says all the time, "in an election people think with their stomach." Let me say loud and clear to the people of Pennsylvania, I am not going to feed you so if you vote with your stomachs, I will not be selected. I do, however, promise to represent you with all my ability. Other than my buddy Grimes, I will leave the "G" word behind.
OK, now that the commercial is out of the way, let me draw a parallel between the greed that we all possess and the collective greed of a corporation. In 1886, despite the advice of the Founders, corporations became legal persons under the law. http://www.uuworld.org/2003/03/feature1a.html
You well know that the British East India Company, an English Corporation, one of many English trading corporations operating in the pre 1776 days, was not very loved by American patriots. In 1773, it was their tea that got dumped in Boston Harbor and Americans have yet to gain a love affair for corporations and it is unlikely that that they ever shall. Yet the elite in America and the slimy politicians, who they both loathed and loved, brought back the dominance of behemoths like the British East India Company, and offshoring is a direct result of their greed. Yes, the word, "their" in that last sentence has many meanings.
Making corporations persons under the law was surely an ignoble act by the leaders of this country. Yet such is how we have it today. We all know that compared to US, corporations are huge and powerful. We have similarity only in a metaphor but not in reality. We the people function in many ways like mere atoms in the universe, while the corporations are suns, and moons, and planets. Which of us does not believe in our hearts that in a fair fight, a corporation would simply snuff any of us out anc over it up as if we never existed.
We too have the same power when we take on one of God's nastiest creations, the mosquito. When we choose to snuff out a mosquito, or any other annoying bug, we have the power. Just like the mosquito after our snuffing is missing from the universe, our absence too from an encounter with a corporation would hardly be noticed. How does that make you feel? Important? Hah!
Regardless of whether we like it or not, the government (activist judges way back) decided that corporations are deemed to be persons, albeit fictitious persons under the law. Despite the high level of disdain and distrust that was held for corporations by our founding patriots, the greed of the rich and the elite brought them to America big time. Despite the wishes of the Founders that corporations have only state charters, they have great federal powers. In fact, I have seem some compare one of our largest corporations, Wal-Mart specifically to the British East India Company.
Think of that idea when you are having a cup of the brew with the translucent bag while buying some Chinese trinkets next time you are in the big store. With Walmart as today's reincarnation of the corporate power of the huge English behemoths that helped create the first Tea Party, permit me to say that I don't think the tea is any better.
The bottom line message here is that corporations are not people no matter how much graft was gained by the greedy. I do love alliteration. In my first political book, Taxation Without Representation, published first in 2008, revised and published again in 2010, and available at IT Jungle, I use this paragraph to sum up the chicanery that brought personhood to corporations:
Using its power to divine intent -- even the intent of the Constitution, in 1889, in the Minneapolis & St. Louis Railroad Co. v. Beckwith case, the Supreme Court, in one of its worst rulings of all time, declared that a corporation is a person for both due process and equal protection under the process. Since Shakespeare's time It's been argued that 'something is rotten in the state of Denmark.' The 1889 Supreme Court decision helped begin the decay of the potential for the American dream, unless, of course, you have no flesh. And that, my dear readers is a travesty. The damage is done but it must be undone. Unless the Obama czars steal away our rights, the people still have the power, and we need to act judiciously through the Congress.
Once they got this acceptance as a person, corporations kept getting more rights as government gave in to their financial power. For example, personhood has weakened the government's ability to restrain its growth. In the 1970's corporations were awarded more rights. Now they are covered under the Fourth Amendment against warrantless searches. Fifth Amendment double jeopardy protection, Sixth Amendment right to trial by jury came at the same time. With government not able to constrain their power, in many ways corporations, along with government, who often collude with corporations, are out of control today.
Yes, I admit, we already know that but it serves the soul to remember that persons have flesh and blood no matter what crooks and thieves have declared them.
Watch what you say as corporations now have First Amendment guarantees of political speech, commercial speech, and the negative free speech right not to be associated with the speech of others.
What bugs me is something we all know. You know that with corporations having the same rights as We the People, the playing field is far from level. They can break the will of anybody by taking them to court and ruining any individual financially. It is not nice to cross Mother Corporation.
Of the top 100 economies in the world, it has been documented that 53 of them are corporations. Think of the raw power. A nation-sized corporation has a huge treasury and it has a legion of lawyers if it wants to exercise its free speech rights in a shouting match with a particular John Q. Public exercising his free speech rights. Ask yourself, how will this battle turn out?
Can this possibly be a fair fight?
If you are interested in the sting and the stain of corporations today in America , there is a great treatise on the Web, free for the reading at http://www.uuworld.org/2003/03/feature1a.html. of course, you may also purchase my book referenced above, and you will find a great expose on Corporations in Chapter 10.
So, what can you expect from a scoundrel? US corporations want you to believe they are global corporations so that our government will let them alone to do their own thing -- even if it is to take all meaningful jobs from Americans and give them to foreigners. They are scoundrels for sure and the Attorney General should proceed against them to have the notion of personhood taken from these heartless tin-men. As an aside, Big unions are no bargain for American citizens to endur either.
Can Obama Help the Corporate Problem?
In a word, of course he can if he chooses. I have not found many things that I like in the way President Obama solves problems. Mostly it is because he does not typically solve problems. He creates new problems from existing ones or he exacerbates them. The President is rarely thinking about Brian the computer guy or Joe the plumber. He is thinking about the glory of Barack the ideologue in every move he makes. He'd get more done (though that would not make me happy) if he came down to earth.
President Obama made a speech in 2009 and in this speech, I must admit that he was absolutely right. He was 100% correct. You can quote me on that as I rarely say anything like that about our Prez, because he normally thinks 100% differently from me on any given issue. Not on this one!
I think he had the right idea on offshoring. Yet, since then, unfortunately, he has done nothing about it for going on three years. It has been Obamacare all the way and I don't even hear a whimper on this anymore. Perhaps somebody from corporate America got to him. It is tough to run a billion dollar campaign without huge donors. Anyway, this is what the President said about companies that do a lot of offshoring when he was for it -- before he was against it.
From an Obama May 2009 Speech
".... Even as most American citizens and businesses meet these responsibilities, there are others who are shirking theirs. And many are aided and abetted by a broken tax system, written by well-connected lobbyists on behalf of well-heeled interests and individuals. It's a tax code full of corporate loopholes that makes it perfectly legal for companies to avoid paying their fair share. It's a tax code that makes it all too easy for a number—a small number—of individuals and companies to abuse overseas tax havens to avoid paying any taxes at all. And it's a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York.
"Now, understand one of the strengths of our economy is the global reach of our businesses. And I want to see our companies remain the most competitive in the world. But the way to make sure that happens is not to reward our companies for moving jobs off our shores or transferring profits to overseas tax havens. This is something that I've talked about again and again during the course of the campaign."
Amen! But, from this great rhetoric, going on several years, nothing has appeared, and major Obama friend, General Electric, paid no taxes in 2011.
In this context the President was referring to unpatriated retained earnings. This means that companies who made money overseas and included it on the books of their foreign subsidiaries as retained earnings are permitted to keep the money overseas and not bring it back to the US. The idea is that they can spend the money where it was earned and invest more in that particular country to help sustain or grow their business. Obama's beef and mine also is that by not declaring the income, they do not pay US taxes. GE had help from 1000 tax attorneys as reported by the main street media.
Overall it helps to have strong corporations that carry the American flag but, as the President notes, there are billions and billions of dollars that companies are playing with overseas thereby making more money by not declaring taxes. Yet, these taxes are really due and American citizens are making up the difference. Because of these loopholes, corporations do not have to pay their taxes when the income is earned overseas. It is safe to say that US firms who have taken operations overseas, not only hurt the US employment picture by taking jobs with them, they also hurt the US revenue structure by not paying their taxes as they should.
What if American Corporations Left the US?
So, President Obama's plan last year was to punish these American Corporations by tightening the rules on retained earnings which, theoretically would flush tons of money back into the US treasury, [where the government would waste it on innumerable election opportunities.] However, perhaps, GE a great friend of Obama's and the majority owner of the NBC Network, who are part of the Obama freindly government controlled main stream media (MSM) did not understand the Obama message.
Besides GE, there are a number of other companies such as Microsoft who are not very happy about this idea of paying American taxes. Microsoft has offshored many jobs and this would affect them very negatively. Bill Gates has whined about this openly and profusely, and in some ways in a threatening manner, though I am the last one to call anything hate speech.
If a company such as Microsoft reacts to this Obama planned punishment by moving all its operations and HQ overseas, it would not have to pay a dime in U.S. taxes, and it would not need any employees in this country either. If the Obama proposal ever becomes law, a number of experts think there would be a huge exodus of "former" US companies. They would trade their US loyalty for a quick buck. They would not choose to stick around and take the punishment when they could easily go somewhere else and not pay huge taxes. I have a great solution to this. Let them go! We will recognize them by their limp and their inability to get anybody in the US to buy their products.
Solution for Companies Who Move HQ Offshore
By the way, my solution to these potentially former American corporations who take their corporate HQ overseas to avoid US taxes is very simple. If they chose never to do business in any way in the US again, it would be a big revenue loss for them. So, what smart company is going to do that? Since they will want to sell their products in this huge marketplace, here is their special deal. You'll like this.
If they moved HQ offshore so they were no longer a US based corporation and they chose to do business in the US by selling products through their own sales subsidiary or an agent, here is a way to make them wish they had been more loyal. I would suggest there be a US Business Permission Permit charge required just for corporations that have chosen no longer to be citizens of the US. The fee for the permit would be equal to the average inflation adjusted corporate taxes paid by the company in the last five years. It would be due every year for infinity but at least twenty years. It's not nice to fool with Mother Liberty!
Of course if there were no products from this company sold or black-marketed into the US, then they would fully avoid payment. Good luck and good riddens. Each year the rate would be increased by the inflation index. So go ahead corporations, leave town. The people in the US will hate you in your fictitious personhood, but the government will still love you as your corporate tax bill will basically be the same.
Additionally, because the resources of the US had been used to make the corporation successful in the first place, I would suggest that any patent protections acquired and filed in the US (non-defense ), and enjoyed by the corporation because of the laws of the US, become the property of a new people controlled corporation. This new corporation would be named the "We the People Corporation" and all of the funds from its treasury would help fund things like unemployment compensation as well as social security.
Noncitizens have non-rights. The "We the People" corporation could then propose to a competing foreign company to come to America, build facilities, and employ Americans. The foreign company could then use the patent rights (only in the US) as once held by the expatriate citizen corporation. So, a business that may not be a US citizen would be able to come in and buy or build a plant and begin to manufacture and sell similar products as the corporate scoundrel that intentionally left the protection of the U.S. And, American workers would again have good jobs.
10% Corporate Tax & a Two-Tier Tax System
So that the "We the People" corporation does not get into a "tinkling contest" with real American Corporations that have chosen to stay, as your Senator, I would introduce legislation that would change the corporate income tax system to two-tier. This would dis-incent corporations from moving jobs overseas and it would incent them to bring them back. It would be a huge, huge tax reduction. The domestic corporate income tax rate would be lowered to 10% while the overseas tax rate would stay at 35%. Are you catching my drift?
This would encourage the world, including formerly American corporations to invest big-time in the U.S. The rationale for this is once the investments came, the jobs would flow back to the US so fast that people who thought they would never work again would see big jobs again in the US.
Penalize the Bad US Corporate Citizens
My ameliorating friends and consigliore's tell me not to do this but my instincts are that this next notion is what is needed. I am concerned about the companies who have a huge part of their former American workforce overseas already in other countries while their former American workforce remains unemployed. So, in addition to a sweet incentive of a lower tax rate, I would like to add a bad guy fee for those who have abandoned US interests and sought to increase profits by discarding American workers.
In my plan, there would be a schedule to be created that would be called the jobs penalty schedule. It would work via a formula yet to be determined but I would propose that it would be similar if not identical to the following:
Based on the schedule, corporations would pay from 0 to 10% extra tax based on their domestic jobs profile. For example, let's say IBM's domestic employee base is determined to be 200,000 at its highest in the past 20 years. Let's also assume that its current US employee base is 100,000. The job loss to the US would be 100,000. To calculate the percentage job loss, put the job loss # over the current job #. 100,000 / 100,000 = 1.00. The job loss index factor therefore in this scenario becomes 1.00 or 100%
The US employee penalty formula would multiply the job loss index factor by 10% to get the additional tax percentage penalty for the corporation. If your company placed jobs overseas and if you fired American workers, you would pay from one to ten percent additional tax depending on the percentage of former US workers you displaced. For IBM in this case, it would compute to 1 times 10% = 10%. To get IBM's full domestic tax rate, if IBM were the perpetrator (and from what all my friends in IBM say, IBM is an egregious perpetrator), it would be 10% in penalty plus 10% normal tax = 20%. Because IBM would be deemed to no longer be a good corporate US citizen, it would pay twice as much as another company in taxes until it brought back its labor force to the US.
If corporations insist on being US citizens, let's make them be good citizens.
Under this plan, how will it help a company to bring jobs back to America?
Now, suppose IBM brings back 40,000 employees. Their number of domestic employees would then be 140,000 and displaced would be 60,000. So. 60,000/100,000 = .6 or 6%. And, so, IBM's corporate tax rate, if they brought 40,000 workers back would be 10 + 6 = 16% instead of 20% . If IBM brought back all 100,000 jobs, its factor would be zero and its tax rate would go down to 10 + 0 = 10%, which would be the lowest rate possible. Then we in America could say to IBM, you are not only a good corporation, but a good person.
The thought of bringing 40,000 or 100,000 more employees back to the U.S. probably is not a notion on IBM executives' minds at this time. This program does not care what is on their minds. IBM, Microsoft, HP, Apple, and lots other US corporations who like being known as US corporations do not have a right to positive press when they are hurting Americans. Their greed hath no bounds. They want positive press for sure but more than that they would like the 25% corporate tax savings they would get under this plan. And the United States, for giving that tax reduction would get millions of jobs back. Oh, and each one of the folks who get one of those jobs, they would be paying taxes for the good of America. It's win, win!
To say the same thing just a little more bluntly. Corporations are heartless b-zers. You figure out how you merge a word that means "born of parents not married to each other" with geezer. All of their motivations are based on greed. Even when they give something, they expect more back. Quid pro Quo would have little meaning if it were not for corporations. The corporate culture is based on greed. That is all that corporations understand. They owe no allegiance to the citizens of the United States just like your neighbor does not owe you or any of your other neighbors a beer on a hot day when he has the only cooler in town. Yet, you know your neighbor will come through because they are good citizens. Try to get anything from a selfish, uni-focused, "care nothing about America" corporation.
Ladies and Gentlemen of America, we hold the cards. We the people run the show. Corporations need to clean up their act and Americanize themselves before the next election or they will have a lot to lose in the new American America.
Don't sugar coat corporations because they will not look good anyway. Most corporate executives care about two things other than themselves. Self of course is a big deal in the corporate boardrooms of America or the CEO salaries would be closer to ours. The other things they care about, after themselves is their family, and then they care about the corporation. Well! I suspect there are cases in which the two of those are reversed. In the list of important corporate things, after everything else is gone, you have the proverbial customer and then all those who watch the company, everything else, and then come the employees. If corporations could materialize into people, even the C level executives would not want to have a drink with them at Happy Hour.
Understanding CEO motivation is how we bring jobs back to America. If they are paying 35% tax while all the other Harvard guys or the Wharton School MBAs are getting the 10% rate, these guys will fear that they will be fired by the stockholders who also care nothing about John Q. but know that if the CEO is paying 25% more tax than needed, the CEO needs to be replaced. Remember before even one and two above are considered for a CEO, self is the prime motivator.
I love saying this because it is the truth. Corporate executives are motivated by greed and greed alone. Their self greed reflects the full greed of the officers of the corporation who would in a second sign up to sell out their fellow Americans for a bonus. Some might give up their cube mate for a pack of Cheetos or a Starbuck's Late'. Let me assure you ladies and gentlemen, IBM and all of the greediest corporations in the US would be very interested in saving 10% from their tax bill. They'd sell out their neighbors to get it. If you live next door to any of these scoundrels, who run corporate America, you already know what I mean.
Getting back to the math summary, the corporate tax would be reduced every time the employee index was reduced until a company, such as IBM employed 200,000 again in the US and then its rate would be 10%. Companies that begin to offshore would be likewise affected as their job loss index factor increases, their tax bill would increase.
This helps solve the problem of offshoring and with a 10% tax rate for corporations, it also helps make the US a more competitive country in which to invest. Many economists have offered the notion that the big barrier to success for corporations is that nasty 35% tax rate imposed by the US government. This solves that problem. Country corporations from all-over who have the freedom to make money for their home country will be knocking on the US jobs door to get in on the "New Deal.". There may not be a chicken in every pot, but how about a really new deal that puts a paycheck in every mailbox.
As noted, the US corporate income tax right now is 35% and the state corporate tax varies but it is safe to say it is about 10% as an average of all states. So, 45% of most corporate profits go to the government today even before anything goes to investors. Perhaps states also can also be incented to reduce their rates to put more people back to work.
It is argued that the huge corporate income tax is not really paid by corporations anyway but by consumers. It is fully considered in product pricing. Interestingly, the full corporate income taxes are only paid by those industries who are US corporations and who conduct business within the U.S. The good guys pay and the bad guys get a break on their overseas earnings. This loophole would also be closed.
In the Kelly plan, to summarize the information above, the US corporate tax rate, which in Ireland, lowest in the world, sits at 12.5 to 25%, would be reduced to 10%. Maybe one day we can make the rate zero (0%) to get even more foreign investments on US soil. Can you imagine the investment in the US with a tax rate of zero?
Added to the 10% is a potential jobs penalty of up to 10% that can cause the tax to be as high as 20%. Whether the rate is 10 or 20%, however, this is substantially lower than 35%. The idea of the lower tax rate is so that American corporations will choose to invest again in America and hire employees in America for tax reasons? By the way, their motivation will be the "G" word. "Greed!"
Even though I am not a corporate mogul by trade, I know how US corporations take on the US Treasury and they win huge tax breaks and corporate welfare. How is it that it is OK that in 2011, not only did GE pay no taxes, they were entitled to a refund of billions for playing the game right. The gane needs to be changed. iAll corporate tricks would all have to be repealed in this scenario to level the playing field for all corporations investing in America.
The government for its part has sent a signal to corporations that it expects to gain when the corporation is successful and so more than representing John Q. Public, Congress has been representing the corporations for far too long. Whose campaign warchest increased the most when GE paid no taxes? When you select me for Congress (Senate), representation will be for the people and not the corporations.
The very businesses who gain the protection of the United States in order to maximize profits by setting up various aspects of their organizations offshore, feel they have done their best merely by making a profit. Sorry, folks, that is not enough for the new America. To most Americans who observe the behavior that directs jobs to other countries, they see the US corporations thumbing their noses to US workers by offshoring labor to other countries only to increase their profits by what are mostly negligible margins.
Union or no union, Americans should have a problem finding redeeming value in anything that compromises American employees and benefits the corporate entity over the citizen. Many of us have many ideas on how to improve this. For me, it is another big reason why I devised the plan that we just described and it is why I am running for the Senate of the United States of America.
I like saying it over and over because I think it will work well. The plan is to lower the US corporate tax to a range of between 10% and 20% corporate tax rates . To get the lowest tax rate, you would have to be a good American Citizen as a corporation and employ US workers. Good American Citizens do not ship jobs overseas. There are also incentives built into the rates to bring jobs home.
How about those apples? Notice the lack of capitalization on the word "Apple's. let's let the master Steve Jobs tell America how he would bring Jobs home! If he chose to be on our side, I'd be happy to say, "How about those "Apples?"
Let's keep America strong and prosperous by having Americans fully engaged in the American Dream! Let's not let Corporations or Corporatism stand in our way!
I surely wish you the best!
Brian W. Kelly
Right now I am sincerely considering running for the US. Senate. Now you know one of the reasons!