Tuesday, November 7, 2017

That ugly term "for-profit" rears its ugly head...again

By Don Keith

(Pardon me while I step away once again from the primary purpose of this blog, keeping track of rapid technological change and its effect on media, society, and my hobby of choice, amateur radio. I've become riled again about a subject that seems so utterly simple and understandable, yet one so many get so wrong. Help me understand why other seemingly sane and intelligent people can't see it my way!)

All the breathless hyperbole was inevitable after yet another president and Congress declared yet again their intention to radically alter how we tax revenue earned by citizens of this country. Too many oxen get gored, too much political patronage becomes threatened, and too many people who have careers and earning schemes and entire industries predicated on the inner workings of this mess. Also, the sheer complexity of the tax code and the fact that we have come to depend on the "temporary" income tax to fund every worthy cause or complete boondoggle assures that changing anything meaningful in regard to taxation is going to be problematic. Maybe impossible.

Even now, as Congress wrangles, we see clear-eyed predictions that what they will eventually propose will either make taxation beautifully balanced and perfect or it will create the death of the middle class as we know it while the filthy rich become even filthier and richer. Never mind that nothing is final yet, or the fact that these predictions fall perfectly along a line of demarcation depending on whether the predictor is a Democrat or a Republican. Partisanship will be the death of this democracy. Mark my words.

Well, today I received from a friend a link to a Washington Post op/ed piece that pretty much says anything that ends up in a new tax plan is in there not because it is a good idea.  It is becoming the law of the land because certain key legislators already have cushy jobs lined up after leaving Congress and will put anything in the plan that it takes to close the deal on those employment contracts they are busily negotiating.

Bull feces!  I'm as cynical as the next guy. But I also am certain as I can be that we need to change the way we do taxation in this country. Perfect or not, any plan that lowers taxes for anybody...ANYBODY...is a good thing.  And especially if it forces us to also finally consider how we spend taxpayer money. Hard-earned and begrudgingly surrendered taxpayer money that is rightfully ours, not the government's.

By the way, if you are one of those who think it is a legitimate goal of a central federal government to assure every citizen gets FREE medical care for life or FREE college, regardless whether or not you take care of your health and use that medical help wisely or whether or not you should even go to college, you may as well stop reading now.  You and I will never agree.

Now, my real problem with this op/ed piece: the continuation of the trend to treat terms like "CEO" and "profit" as sleazy, dirty, despicable words. Anyone who leaves Congress to go to work for a consortium of business people has to be a crook, a plant to get those evil, greedy businessmen less taxes and more slimy profits while crushing the struggling middle class so the crooks and thieves in business can line their own bulging pockets with more and more ill-gotten gains.

First of all, "CEO," "profit," and "business" are not dirty words. "Taxation" often is. Especially "taxation" when it is applied to punish those who dare to work, risk, innovate and create in the name of making a profit for themselves, their employees, and their stockholders. And to make better stuff for their customers, too.  I am convinced it is time for us to get over this insane jealousy and distrust of everybody who tries to make a profit, assuming that if they do make money they accomplished success by illegally and immorally squashing competition, creating dangerous products or services, and by bribing every public servant in sight to keep their ill-gotten gains.

(If you have time for even more ranting on this subject, see my blog post from several years ago on this very subject, culled from my previous experiences in a business that actually does a much better job in its field than many of its government competitors and have caught its share of hell for daring to do so...in the name of...yeeccchhh!!!...profits.  See that blog post HERE. But be aware: my wonderfully well-written set of arguments did not change a damn thing. And your government has almost succeeded in putting out of business most of its competitors in that particular field, a true loss for students, the middle class and employers everywhere. Your government is especially adept at putting anyone it wants to out of business, believe me. I speak from direct experience.)

Let me be unequivocal. Any reduction in any taxation for anybody is a good thing. I get so tired of hearing about tax breaks for "the rich." Many assume that if rich folks get to keep more of their profits, that would remove money from circulation and we regular folks will have no chance of ever getting any of it. Or that we are just encouraging companies to do bad things by allowing them to keep more of that money earned on the backs of their poor, beaten-down workforce.  Neither is true!

Those CEOs don't back up the dump truck filled with all that misbegotten money and drop it into a hole in the ground out behind their polluting factory, and cover it up with the ashes of even more burned money! Or make their pitiful, overworked, mistreated workers man shovels and cover it over.

If they truly seek profit and success--for themselves, for their employees and for their stockholders--they reinvest it in their companies, doing R&D, creating new, innovative products, building a place to house all those new employees and labs and factories and warehouses, purchasing transportation, hiring more workers, paying more for them. That's because there will be competition for good, skilled employees, vying with each other and willing to pay for the best. And, at the same time, paying more and offering promotions and even better working conditions for the valuable employees they already have. If they don't, somebody else will recruit them away.

Oh, and successful businesses will pay more taxes even if their rate is markedly lower. But if a 40% tax lurks out there, good CEOs--looking out for themselves, their employees, their stockholders--use every legal loophole they can find, even if it does drag down the economy where they would prefer to compete, but they also know how difficult re-investment and innovation and planning for future growth will be. Or, as so often happens, they realize they simply can't compete with at least 40% coming off the top and they scale back or go do something else. How does that create reinvestment, hiring, training, innovation, increased wages and, naturally, more taxes paid, or all those other things that are not yet negative buzzwords?

And yes, if they and their companies become successful, some CEOs will buy themselves more yachts, more luxury cars, bigger mansions, more vacation homes. But every yacht for which they place an order creates many more jobs and successful manufacturers of yacht-building-stuff, and more profitable marinas and...well...more! And those yacht builders and yacht-part-companies and marina owners will build more factories and warehouses and boat slips, pay more taxes and hire more people who will pay more taxes and buy more non-luxury cars and new homes and take vacations they could not previously afford, which creates more non-luxury-car and home-building jobs for people who will earn more, spend more, pay more taxes...

And many of those flourishing yacht companies and non-luxury-car manufacturers will have their own rotten, mean-spirited, greedy, soul-crushing CEOs who are trying to come up with better products, hire more people, increase their market share and raise their stock value so they, too, can buy more yachts, more luxury cars...

Some may even become so rich that they spend most of their time finding ways to give away some of that money to worthy, deserving causes.  Causes that the government cannot assist because it would require a massive bureaucracy and books and books of new rules and regulations and paperwork-reduction guidelines to get a fraction of the money to those who need it or could do good with it.

Heck, some of those terrible profits may end up with financial institutions who will be able to open the vault every so often and allow somebody to borrow some of it in order to start a new company, build a new factory, create a new software system, buy an overseas competitor or do something else profitable and positive and life-changing for people just now entering the workforce.  Or who might dare to do so over the next few decades while they wait for free college or healthcare.

Do I like the fact that a guy who sits on a key taxation-policy committee has already decided that he is going to work for a consortium of businesses in Ohio that is lobbying for lower taxes?  Nope.  That's one "onerous" regulation I'd like to see put in place.  Congressmen should not be able to parlay public service into cushy jobs afterwards. But show me quid pro quo here. We want citizen politicians yet when they come to office from the business world or return to civilian life when they get fed up, we automatically assume they got that dream job because of all the shafting they did of the people they were elected to serve. Not necessarily so.

In fact, I'd bet this guy was already for lower taxes on business anyway. Always has been. Ran on such a platform idea. Truly believes allowing business to keep more of what they make--just as with individuals like you and me--leads to more reinvestment or productive spending or saving somewhere down the line. And that he is qualified for the job he will get. And we are probably wrong if we assume there is some kind of collusion here, that they are not really hiring him because he is going to steer sensible business tax law into reality as opposed to keeping the incomprehensible and deflating mess we now have.

And am I all sweetness and light, certain that there are not some terrible CEOs or terrible companies out there who would eviscerate their mothers for a 2% uptick in first quarter revenue? If course not. There are bad actors, polluters, bribers, rapists and pillagers out there, but reasonable...REASONABLE, consistent, predictable...regulation and prosecution will keep that to a minimum.  So will an open and unfettered marketplace.

The fact is that such bad-acting companies will only make a profit for a limited amount of time if they operate in a truly free, transparent, competitive, reasonably- and predictably-regulated marketplace.  Especially now, when anybody with a cell phone can report such bad acting to a vast audience. Customers quickly learn who the shysters are and who the good corporate citizens are, and the right folks will ultimately get rewarded. "Ultimately" being much quicker than ever before in our history of railroad barons, trusts, monopolies, and "too big to fail."

Maybe this opinion writer in the Washington Post is correct, though. After all, that Ohio group is made up of businesses and CEOs and we know how evil--at least according to many columnists and Hollywood--that insatiable profit motive is.  That all business people are dedicated to squashing the little man, keeping sweat-shop employees on subsistence wages, all while making as gargantuan a profit as they can by turning out shoddy, dangerous products and foisting them on a stupid public.

Then, once they have accumulated all the money in the world and have bought everything they can possibly buy for themselves, they take the rest of that filthy lucre, put it in a dump truck, and drop it into a hole in the ground and cover it over so nobody else can get it. Or force their miserable employees to do it with spoons for shovels while upper management lash them with cats-o-nine-tails.

Or use some of it to bribe Congressman so the CEO and his damned company can make more money to bribe even more Congressmen.

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