The Blue Ridge Parkway and the Tail of the Dragon

Planning a long distance motorcycle ride all the way to northeast corner of Tennessee in 5 to 6 days sounded both adventurous and fatiguing at its inception. Visions of beautiful landscapes repeating themselves like a skip on an old vinyl record played in my head while the daunting reality of long days of riding dampened my level of enthusiasm. There was going to be plenty of time to think as the back seat would hold me hostage much of my day to my own thoughts.

The massive and amazing panoramic views of the Blue Ridge Mountains stretched across the countryside along the winding parkway. Tree tops crested along overlook roadsides within ten feet of the roads edge. Mountains shot up at sharp angles up through the morning clouds and tunnels carved through the mountains made for easy flow on the roadways. I would like to thank President Roosevelt and his New Deal for this delivery of a piece of American heritage preserved for all to experience. I am thankful for every president thereafter who continued with its construction to 1987 with the completion of the engineering marvel of the Linn Cove Aqueduct. It is a unique bridge of concrete and steel that twists and turns around the edge of the mountainside seemingly suspended in air.

We stopped for lunch where dreams are realized for biker enthusiasts. The Tail of the Dragon is a popular motorcycle destination with its hairpin twists and turns from North Carolina to Tennessee. We sat there as I peered out watching the people walking by with a stir of activity. I discarded the hamburger roll scoffing I did not need the extra carbs. I transgressed as I looked out and asked 'is my ass that big?'. Randomly consumed by the female mind wash of what image is perceived to be sexy or healthy. I would like to believe I am not vulnerable to imposed expectations, but I am no exception. The unwanted twelve pounds hanging on my hips reminded me of how a road trip lacks good food choices.

We started out on the mission of completing our final destination. The bike leaned to its side as centrifugal force held us steady as we made our way around the series of turns. We wove back and forth as we twisted around the roadway. My stomach started to feel a familiar unsettling as my motion sickness started to preoccupy my thoughts. We came out on the other side and I felt my sense of relief dissipate when I looked back and saw that the 312 turns in 11 miles must be repeated. I started to feel hot and what little breeze and shade was provided felt inadequate. I focused intensely on a diet coke. The poison that is eating away at my bones and will surely turn me into a gelatinous ameba was the same poison that would save me from the queasiness stirring in my stomach. Luck was on my side as I made it through the last stretch as we began the return home. 

My greatest impression of our trip is the vastness and beauty of our great country. There is abundant diversity in our people and our countryside. We are left wishing we had planned for more time to get out and do foot exploration through the many trails along the way, but that will be left for another trip at another time with a new and improved idea of what kind of adventure we want to experience.

Redistribution of Tax Liability: A Message from the American Working Class

   Over the last 30 years we have been indoctrinated into believing that redistribution of wealth was a black mark against the American Dream, capitalism and the world of free markets. It caters to the notion that “taxation is a form of punishment for success” and that we tax the wealthy for the sole benefit of ‘freeloaders”. The wealthy are the “job creators” has been bellowed from the highest mountain as if it should alarm us to impending doom. The reality is that there has been a redistribution of tax liability from the wealthiest to the bottom 95% and our revenues have plummeted to unsustainable levels. 
   Americans are the most productive workers in the world. Our productivity has realized a steady rise over the last couple of decades and yet our median income has remained flat and is now on its decline. All of the benefits and profits of our increased productivity have benefitted the top. Apparently we have not “earned” it and they did. We are not in control of the levers that give or deny us a raise even for consistent excellent performance. The business model of ‘pay for performance’ is largely a ruse. Those that have benefitted the most are the ones in control of this distribution of wealth. 
   They are the same people in control of the redistribution of tax liability via our tax policy. Our country’s ‘progressive’ tax code has realized a flattening of the tax structure because of a tax code that most Americans do not have access to. Different laws for the different classes. The tax cuts for the wealthiest on the federal level have resulted in the shifting of tax liability to the states and then on to localities as federal dollars dry up. I can remember Lowell Weicker falsely reassuring us that our new state tax was only a ‘temporary’ measure. That was twenty one years ago. 
   Simple math now escapes our congressmen. If we cannot tax the bulk of American wealth, who will pay for a necessary government? One can easily make the argument that we are on a slippery slope to fascism. Corporate power is palpable in all facets of our government and our law making process. 
   Let me say this out loud. I am a job creator. The 95% are the job creators. We collectively create the demand that generates production of goods and services. Starving us is what is starving our economy. The only mechanism to retrieve our fair share of the productivity advances is to tax the top at an appropriate tax rate. If those in control feel our excellent performance does not warrant financial reward, then we should at least compel them to help adequately fund our government and lessen our burden of taxation. When it becomes acceptable that an hourly wage worker should pay a higher effective tax rate than a multi-millionaire, something has gone wrong with the system.
   America needs to redirect the conversation from the misappropriated and inaccurate catch phrase of redistribution of wealth and focus our attention to the distribution of wealth and redistribution of tax liability. These are the true killers of the American Dream.

Corporate Taxes: A Story Worth Repeating

We have been hearing from Republicans, corporate leaders and Democrats that “we have the highest corporate tax rate in the world”. When I hear more thoughtful conversation on the subject rather than political talking points, I get glimpses into the real story.  The claim is that because of our high corporate tax rate, we cannot attract investments that would translate into American jobs. “We need to bring back manufacturing to America”. The big question is ‘why haven’t the republicans proposed any flat rate corporate tax in the two years that they have held control in the House especially when this is what they claim we need’?

Historically corporate taxes are at their lowest since post Great Depression. The tax statutory (what is law) corporate tax rate was at 40% under Reagan for seven years of his presidency. The trend has been a continuous decline of effective tax rates for corporations. The current rates range from 15% to the top rate of 35%. The graph below is the end results of an elaborate tax code that draws down the effective tax rates paid.

A visual comparison to other nation compliments of thinkprogress.org

Based on a report from the Center on Budget and Policy Priorities, our current statutory corporate tax rate ranges from 15%- 35%. This represents the highest corporate tax rate among the top 19 Organization for Economic Co-operation and Development (OECD) nations. Unlike other OECD nations who have a flat tax rate, the USA has a generous tax code that brings our average effective corporate tax burden down to 14%. This is lower than the average flat tax rate of 16.1% of other OECD members. In addition, according to the US Dept. of Treasury, there is an average of 25% of corporations that have no federal tax liability each year.

The argument that corporate tax rates alone are depressing jobs in America does not generate a complete picture. First, manufacturing is growing in the USA, however technological advances have suppressed the need for workers. We cannot compete with a dollar an hour wage and lack of workers’ rights or benefits. Environmental protections create an added cost, but is it worth polluting our rivers and lands again to eliminate these barriers to extraordinary profits? We are lacking both enforcement of existing trade policy and smart trade policy to compete against countries like China. Demand, demand, demand. The disparity of wealth has pushed the nation’s wealth to the top and out of the hands of the real job creators. It is the middle and lower upper class who generate demand for products and this disparity has to be resolved if we want our economy to grow strong again.

A lower corporate tax rate would benefit small business the most, but a lower flat corporate tax would be the fairest, least complicated and financially helpful to our largest job creators in the small business world. Larger corporations are sitting on over 2 trillion dollars in profits. Even our current tax rates haven’t diminished their profitability. 80% of our multinational corporations have tax havens in places like the Caymen Islands. President Obama has supported lowering the highest tax rate to 28% while closing tax loopholes that the largest corporations enjoy.

My position stands. With the amount of money and influence in Congress it begs the question ‘what influence do those corporations who pay little to nothing have on reforming the corporate tax code’? Secondly, if our effective tax rate is lower than the average nation, why would they be motivated to change it especially if certain powerful corporations pay no tax at all?

Sources:

IRS, Statistics of Income Bulletin, Fall 2003, Publication 1136 (Rev. 12-03)Corporation Income Tax Brackets and Rates, 1909-2003

Putting U.S. Corporate Taxes in Perspective. By Chye-Ching Huang and Chad Stone. October 27, 2008. http://www.cbpp.org/cms/?fa=view&id=784

Contrary To GOP Claims, U.S. Has Second Lowest Corporate Taxes In The Developed World, By Marie Diamond on Jul 5, 2011. http://thinkprogress.org/economy/2011/07/05/260535/graph-corporate-tax-second-lowest/