Jim Palermo: Income inequality threat to democracy

Wednesday, August 02, 2017
Income inequalitythreat to democracy

It is said that if an opinion is repeated enough times, people will believe it. And that seems to be the case with regard to the opinion that lowering the tax burden on major corporations will result in more jobs for Americans. I suggest that there is little or no evidence to support that opinion.

American corporations — the biggest of which often pay no federal income tax, and enjoy near tax-free status in the states that have lured them away from neighboring states — are awash in profits. Yet, few of them have substantially increased their workforces.

Rather, in order to meet their insatiable appetite for profits, corporations do all in their power to minimize labor costs, often through automation or by exploiting cheap foreign workers. So on what basis do we conclude that alleged high taxes are responsible for the decline in well-paying manufacturing jobs in the United States?

And why should corporations have special tax status? The Supreme Court ruled in Citizens United that corporations are persons with the right to free speech. So why should they not be taxed just the same as we flesh-and-blood persons? After all, our taxes go for pretty much the same things: national defense, police and fire protection, sewers and water, safe roads, and good schools, for example.

In addition, however, corporations benefit far more than average citizens from our system of laws that protect copyrights and intellectual property, enable the enforcement of contracts and provide the architecture to support the free flow of commerce.

To my way of thinking, tax reform — which may be needed to some extent — is less important than the need for anti-trust enforcement and for the regulation of the financial markets, because income inequality is a palpable threat to our democracy.

Jim Palermo