Recently, the economist Mark Blyth made a disturbing point about the American financial system. I’m paraphrasing here, and to really do it justice you have to imagine the following in Blyth’s thick Scottish burr. But here it goes:
Imagine that you’re at a wedding reception. You see a guest get really drunk and grab the bride’s ass. Then he punches the groom in the face. Then he takes a shit in the middle of the dance floor. You find out that this drunk guy is the wedding planner. Would you then turn to your fiancée and insist, “We need to hire that guy for our wedding”?
Well, as Blyth points out, that’s exactly what we did in 2008.
You see, when the world economy melted down in the Great Recession, we ran to the guys who had caused the disaster, and screamed, “Save us!” And they were only too happy to help out.
Of course, that allowed them to continue pillaging the economy and accumulating such ungodly gobs of money that today, billionaires are buying yachts to tow their super-yachts (really).
But even some conservatives have now admitted that the American economy “turns out not to function very well when tax rates on the rich are low and inequality is high.”
This super-fucking obvious point leads us to our president, smilin’ Joe, and his “radical” plan to have rich people pay more in taxes. Now, it would make us happy if the wealthy had to write a slightly bigger check based on their personal income (well, most of us would be happy). But this approach is, to use the sophisticated language of economists, just chicken feed. Because over the last half-century, “the biggest tax boon for the wealthy has been the sharp fall in the corporate tax rate.”
Think about it. Last year, dozens of major corporations paid no federal income taxes. And the United States “raises less corporate tax revenue as a share of economic output than almost all other advanced economies.”
And yet over the decades that we’ve been nicer to corporations, and their profits have surged, personal income has grown “more slowly than the economy for every group except the wealthy.”
Yikes. It’s almost as if the “long-term decline in corporate taxes doesn’t seem to have provided much of a benefit for most American families.”
What are the odds?
Well, Biden’s plan would raise the corporate tax rate, punish companies that move profits overseas, and prevent companies from paying zero taxes, among other things.
Predictably, conservatives are calling this approach “socialism” and “class warfare” and “big-government overreach.” I’m sure they’ll get around to calling it “cancel culture” and the “woke mob” soon, just to complete the latest round of right-wing bingo.
However, Biden’s plan “is popular not only with the general public, but even with investors,” which makes things awkward between the GOP and their corporate overlords.
Indeed, the relationship between the Republican Party and big business has frayed recently. It turns out that corporations like stability and an improved economy, while the GOP likes voter suppression, white supremacy, and oaths of allegiance to a failed dictator. It’s a slight difference in priorities.
Keep in mind that corporations don’t give a damn about social justice or equality or any of that touchy-feely nonsense. They do care, however, about their bottom line, and that is threatened when one political party makes it clear that they are willing to burn the country down rather than share power.
So we are witnessing “big business’s embrace of progressive positions on things like LGBTQ rights, abortion, and voting rights.” This is because their “customer base is increasingly urban and liberal on social issues,” and their key employees and executives “are younger and more educated than ever before.” In addition, studies show that “investors really do care” about things like climate change, and they “crave transparency about the carbon footprints of the companies they back.”
Basically, it doesn’t pay for companies to act like Republicans.
And here you thought they were just being nice.
In any case, you shouldn’t worry that companies will be taxed so much that they can’t innovate. All that was a myth, anyway, because the truth is that “many of the biggest technological breakthroughs in American history have not sprung from the private sector,” but have been “the result of collaboration between private companies and the federal government.” After all, high-tech research “is usually too uncertain and expensive for any one company to afford.” It is government research that has led to, among other inventions, transistors, silicon chips, radar, jet airplanes, satellites, artificial limbs, cortisone, flat screens, and a little thing we call the internet.
With all that in mind, don’t you feel better now about potentially taxing the hell out of corporations?
I know I do.