Republicans once again try a race to the bottom
Why are some politicians so consumed with engaging in a race to the bottom! The USA is plagued at the federal, state and local levels by corporate socialism!
Politicians constantly trying to burnish their “created jobs” bonifides push for tax breaks for companies and these same companies play municipalities and states against one another as to which one can offer the most breaks in taxes and other costs.
This happens between nations as well. The famous Celtic Tiger rise of Ireland was due largely because of massive tax breaks to, if not move a company completely to Ireland, at least headquarter there. But ask the Irish how well the Tiger worked for them? Massive homelessness, economic crash and poor recovery as the two major Irish political parties both pursue neo-liberal Reagan/Thatcher trickle down policies.
So how do we stop this corporate greed driven race to the bottom? Well, in the international level, the USA joined an international agreement enshrined into law by H.R. 5376: Inflation Reduction Act of 2022 [1] in which all developed nations would at least charge 15%. The law’s provisions establishes a new 15% corporate “alternative minimum tax” for corporations with annual profits larger than $1 billion which would raise over $222.2 billion across a decade per the Congressional Budget Office.[2] The 2022 law passed on strict party line vote.
Now, Republicans are regurgitating trickle-down arguments to undermine this agreement. Zombie economics, as Paul Krugman calls it.
A bill has been introduced in both Congressional chambers. H.R. 9030, by Rep. Jodey Arrington (R-TX19). S. 5017 in the Senate by Sen. John Barrasso (R-WY).
Here is what Rep. Arrington said in a press release:
“The book minimum tax is disastrous policy at the worst possible time. With economic turbulence, historic inflation, and skyrocketing energy costs, Democrats have rolled out a tried-and-failed tax hike that will undermine domestic investment, job creation, and U.S. manufacturing. The legislation would protect American competitiveness and working families from higher prices, fewer jobs, and lower wages. “
Sen Barrasso said:
“The book minimum tax is another reckless power grab by the Democrats to squeeze hardworking Americans dry. Policies like this only raise taxes on workers and consumers, resulting in wage cuts and jobs moving overseas. We need to repeal this unfair tax to ensure companies are investing in America, creating more American jobs, and unleashing American energy.”
Of course, both of their arguments are red-herrings and strawmen. It doesn’t undermine competitiveness if all nations charge the same 15%. It levels the playing field. It is arguable whether it would raise prices. As to lower wages, every Republican scheme economically, including pushing so-called Right to Work laws, has done plenty to lower wages. While many Democrats have been complicit, the move to shift manufacturing overseas has always been an element of Republican economics (at least until the populism of Trump).
If one recalls the tax cut bill of 2017, this too was a huge give-away to corporations. The bill cut corporate taxes and was sold as a means to spur growth nor did it trickle down. Trump and Republicans claimed the bill wuld boost incomes of citizens at least an average of $4,000. (They wildly claimed it would actually be $9,000). It did not result in a sustained boom in business investment. [3]
Worse yet, the altered tax rates, like all Republican tax policies since Reagan began undermining the progressive tax structure in the 1980s, actually hit the poorest the hardest! [4]
This begs the BIG QUESTION: Why do people continue to vote for these guys?
[1]
https://www.govtrack.us/congress/bills/117/hr5376
[2]
https://www.cbo.gov/system/files/2022-09/PL117-169_9-7-22.pdf#page=10
[3]
https://www.americanprogress.org/article/trumps-corporate-tax-cut-not-trickling/
