How The Left’s Underlying Assumptions About The Rich Hurt America

05 May, 2009 by John Hawkins

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One thing that people often miss about politics is that different underlying assumptions on the Left and Right can lead to wildly divergent policies and results.

For example, let’s take the issue of corporations using overseas tax shelters. Here’s the Obama/liberal take on the issue:

President Obama, flanked by Treasury Secretary Tim Geithner and IRS Commissioner Douglas Shulman, announced changes to the tax code that he said would prevent businesses from dodging their responsibilities “while ordinary Americans pick up slack.”

Combined with additional tax reforms to be laid out later this month, the proposals are expected to increase tax revenues by some $210 billion over the next 10 years. Congress, however, must first approve these moves — which some argue would amount to a tax increase for U.S. corporations and are likely to face tough opposition from corporate lobbyists.

…In brief remarks Monday morning, Obama said that while most American citizens and businesses meet their responsibilities as taxpayers, others do not. “Many are aided and abetted by a broken tax system written by well-connected lobbyists on behalf of well-heeled interests and individuals,” he said. “It’s a tax code full of corporate loopholes that makes it perfectly legal for companies to avoid paying their fair share.”
During the campaign, candidate Obama often spoke of the need to get rid of tax loopholes that reward companies that “ship jobs overseas” and to create a fairer, simpler tax system. He frequently joked about one building in the Cayman Islands that housed more than 18,000 U.S. companies, saying it was either a really big building, or a tax scam.

If you’ll remember, during the campaign, John McCain had a very different outlook on this issue.

Cut The Corporate Tax Rate From 35 To 25 Percent: A lower corporate tax rate is essential to keeping good jobs in the United States. America was once a low-tax business environment, but as our trade partners lowered their rates, America failed to keep pace. We now have the second highest corporate tax rate in the world, making America a less attractive place for companies to do business. American workers deserve the chance to make fine products here and sell them around the globe.

Why the different policies? Well, let’s break this all the way down to its simplest components.

Liberals view corporations as piggybacks for their government schemes that are run by evil people who somehow cheated everyone else in order to get their money.

Conservatives view corporations as being run by hardworking, industrious people who’ve gotten where they are by serving people. We think they’re an asset to the country that provide jobs, products, innovation, and tax revenue.

Now, when you start with these two different views, you’re naturally going to have a very different perspective on why corporations are trying to move their business overseas.

Liberals think it’s because that’s what these evil corporate b*stards do! They’re looking to find a way swindle the government out of the money the owe and they need to be stopped!

Conservatives think it’s because we have an extremely high corporate tax rate compared to other nations and corporations don’t like seeing so much of their hard earned money pillaged for practically useless government programs.

Of course, this leads to two different approaches.

Liberals want to try to ratchet up our already punitive tax rates on corporations to take even more of what they have.

Conservatives want to cut the corporate tax rate in order to encourage our own companies to do more business here and to get other corporations to do more business in our country.

Obviously, with the hard Left in charge, we’re going to take the liberal path. What are the ultimate results going to be?

Most corporations are going to find new loopholes to shelter their money and some of them may just move entirely overseas. It’s already being discussed. The following excerpt comes from an email John Derbyshire at The Corner was given,

Hey John — Would you like a sound bite from one of those evil hedge fund guys for Colmes’ show tonight? How’s this: “As a professional investor I’d have to be out of my skull to partner with this government on anything.”

…Also, Geithner and Obama have been saying that they plan on balancing the budget once the crisis is past. The press may believe that twaddle about how he’ll do it by “making things more efficient,” but we in the hedge fund industry aren’t so stupid. We’ve looked at the numbers and know what he’s planning to do. I know dozens of people who are already putting the legal structures in place to move their companies and themselves offshore and away from the grip of the tax man. These are some of the smartest most dynamic people in the world and they’ll have no trouble staying ahead of the kids from the short bus over at the IRS.

So unless Obama wants to run out of “other people’s money” a lot sooner than he expected, he had better keep some people around to pay the bills. And if he keeps demonizing the productive and saying that it’s their responsibility to let him spend their money on the unproductive, then we’ll all be gone. I’ll be working my 14 hour days in Bahrain or Singapore, and Obama can go suck eggs. He needs the productive classes a lot more than the productive classes need him.

Therein lies the problem with cutting the throat of the goose who lays the golden egg in hopes of finding a large nugget in his stomach.