CommentsCORRUPTION WATCH--The great advantage of Lies and Myths is that they dispense with reality which can be so unpleasant. In the realm of make-belief, where Americans prefer to live, everything they believe is true and there is no need for introspection. Trying to think can give a brain freeze faster than a Slurpee at 7/11.
The Great American Tax Debate which Never Occurred
Americans did a superb job of passing a significant tax bill without having any discussion of the actual tax bill. A discussion would have required people to find out what was in the tax bill and then use reason. (Thinking is the act of applying reason to facts.)
For the Democrat leaders like Nancy Pelosi, the horror of the tax bill is that a significant number of Democrats support the core of the GOP tax bill. Thus, the Pelosi-Dem strategy was simple: divert people’s attention with extreme emotions based on lies. It works for Trump.
In a land where mythology is king, it is blasphemy to admit that for years almost all Democrats in the House and the Senate have supported the key aspect of the tax bill. The media went along with the Pelosi-Dem plan of mass deception like a bunch of mean girls in high school deciding they don’t like the new girl with braces on her teeth.
So What Was the Core of the Tax Bill?
For years the US has followed a tax system which is at odds with the tax system used by most of the industrialized world. We use a worldwide tax system where the US taxes corporations on the basis of their worldwide profits without regard to where the profits were generated, while the rest of the world follows a territorial tax system where they only tax profits made within their own borders. Guess in which countries businesses prefer to manufacture stuff? The enormous tax liability of being taxed on a company’s worldwide profits is easily avoided by staying out of the United States.
On the other hand, if a company knew that it could do business inside the US without being taxed on its worldwide profits, then it would not shun the United States. It is easy to see that we reduce the amount of manufacturing inside the US by erecting barriers to corporations’ opening manufacturing operations within the US. Also, we lose 100% of the territorial tax which we would have gained had we limited out taxes to the profits generated within the US territory.
The way a territorial system helps American manufacturers is a tad convoluted. To over simplify, if an American corporation manufactures something overseas, that foreign country’s taxes are limited to profits generated in that country (which are between 20% and 22%) and the American corporation does not have to pay its additional American taxes under our worldwide system until those profits are brought back to the United States. (It’s called “repatriation” which is a misnomer since the money was not here in the first place.)
Needless to say, American corporations refuse to repatriate their foreign profits. Thus, the greedy worldwide tax system fails to tax the profits which American corporations make overseas. That also means the American corporation cannot invest money earned overseas in the US as the investment would repatriate the money and kick in American taxes in addition to the foreign taxes which it has already paid.
Thus, we have an idiotic system which reduces the amount of manufacturing in the United States and correspondingly reduces employment (which helped create the Rust Belt and thereby elect Trump), while lowering our tax revenues.
Any sane economist, be he/she Democrat or Republican, wanted the United States to change away from the worldwide tax system and adopt the territorial tax system like the rest of the world.
The Worse Is Yet to Come
Nancy Pelosi brought us the unnecessary nightmare which we will endure with the GOP tax bill. Thanks to Pelosi, the right wing inserted a bunch doo-doo. The untold story is that Nancy Pelosi wants to be Speaker of the House again and presently her power comes from her ability to raise and dole out money for the November 2018 elections. The more outraged the Democrats become, the more money she can raise.
Nancy Pelosi is not the only Democrat who is placing party over country. Generally, Democrats believe that they can regain control of the House of Representatives in the November 2018 elections provided people are still angry.
If the Americans saw moderate Dems and moderate GOP work together to forge a better tax bill, that would be a dagger in Pelosi’s fund raising heart. Instead, the Democrats undertook a campaign of disinformation which reminds one of the orange buffoon himself.
The change from the worldwide tax system to the territorial tax system required us to lower our corporate tax rate to about 20%. That is the tax rate which the rest of the world uses, and no company moves its manufacturing from a county which taxes profits at 20% to a nation which taxes profits at 35%. Nonetheless, we were bombarded with the big lie that the cut in the corporate tax rate was solely to make rich people wealthier when its purpose was to allow more manufacturing in the US.
How Pelosi Handed Power to the Ultra Right Wing
In her obsession to keep Americans ignorant and angry and not allow a single Democrat to support the GOP tax bill, the moderate GOP had no choice but to cater to the lunatic, tea bagger wing of their party. If the Democrats had told the truth that they too wanted to change the tax system, the GOP would have been freed from their Know-Nothing fraction. Seventy to 100 Dem votes in the House and 35 to 40 Dem votes in the Senate would have deprived the right wing of its power.
With the tea baggers neutralized, ACA (Obamacare) Mandate would not have been repealed. Rather, Dems could have negotiated increased support for health care. Pelosi is a good politician but a poor American. She put the moderate GOP into the position that it had to cave into the right wing in order to pass the tax reform. Now, she has a campaign issue to help her regain the Speakership in November 2018. Pelosi’s ambition will cost an additional 13 Million Americans their health care coverage.
Americans Have Come to Value Emoting over Thinking
Once, the majority of we Americans had a sixth sense, called a BS Detector. Without knowing what was being omitted or which exact statements were lies, we knew in our bones when something wasn’t right. That’s how we remained on a centrist track for decades and we all prospered. Since those bygone days, both parties have contorted themselves into quasi religious institutions where faith in myths rules the day. Democrat voters should have known better than to ignore the actual GOP tax bill and succumb to rants about the evil wealthy.
By allowing ourselves to be manipulated by charlatans like Trump, Bannon, and Pelosi, we let a mentally ill buffoon become President. We have done this to ourselves. The route out of this mess is to demand facts and reason from our own parties. The GOP rejected Roy Moore; now, it’s the Dem’s turn.
(Richard Lee Abrams is a Los Angeles attorney and a CityWatch contributor. He can be reached at: [email protected]. Abrams views are his own and do not necessarily reflect the views of CityWatch.)
-cw
