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Executive Orders Under Cover of Fire

With all the media attention being paid to Israeli Prime Minister Benjamin Netanyahu’s speech before Congress today, now is a perfect time for an American president to launch some pet policy that would not fare scrutiny well. Thus, White House spokesman Josh Earnest seized the opportunity Monday to announce that President Barack Obama is “very interested” in the idea of raising taxes through executive action.
Whether he was joshing or in earnest was hard to say, as always, but the White House spokesman was quick to add “Now I don’t want to leave you with the impression that there is some imminent announcement, there is not, at least that I know.” This was unsettling enough, even before he further added that “the president has asked his team to examine the array of executive authorities that are available to him to try to make progress on his goals.” All this came in response to a question about a proposal from self-proclaimed Socialist and Vermont Rep. Bernie Sanders to raise up to $100 billion dollars by closing various corporate tax loopholes through executive action, which we expect the president would find very interesting, and as Earnest himself admitted, “The president has certainly not indicated any reticence in using his executive authority to try and advance an agenda that benefits middle class Americans,” so we take it as more or less a policy statement.
Nit-picky conservative types will note that the Constitution is rather explicit about the legislative branch having the sole authority to levy taxes, but it says the same sort of old-fashioned blather about immigration law and carbon regulations and any number of other things that no one seems to care much about these days, and lately all that Constitution stuff doesn’t seem to matter much. Some insufficiently-lobbied corporation or another will surely find it cost efficient to challenge any executive ordered tax increases in court, and the Republican majorities in both houses of Congress might yet find some means of resistance, but the past many decades of congressional delegation to the executive bureaucracy provide enough legal precedent to stretch the case out over many years, and it will likely take even longer than that for the Republican leadership to stiffen its spine. If corporate tax increases are so written by the all-powerful president, so it likely will be done.
How a hefty $100 billion corporate tax hike would “advance an agenda that benefits middle class Americans” will of course go unexplained. Many middle class Americans work for corporations, and are unlikely to benefit from new taxes that hinder their employers’ international competitiveness at a time when the American economy is already suffering from the world’s highest corporate tax rates, and every last one of us buys something or another from a corporation, so we’ll be paying the taxes that corporations will merely be charged with collecting. Some additional revenues will be raised, we suppose, and assurances will surely be offered that the money will be spent wisely, but the most likely argument we can surmise is that not only those darned corporations but all the people who work for them and anyone who occasionally buys something from them must be punished.
Somehow or another this should advance the agenda of the president’s party, which every leap year always seems to find a majority of Americans who will fall for this sort of thing. When the corporate employees get their pink slips, and the corporate customers notice increased prices, they’ll be all the more eager to punish those hated corporations. If that pesky Netanyahu is still grousing about such minor matters as Iran getting nuclear weapons, it will be all the easier.

— Bud Norman

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Bumper Sticker Politics

A good friend of long standing favored us with a ticket to the Wichita State University Wheatshockers’ basketball contest with the University of Tulsa’s Hurricanes last night, and he threw in a ride as well. It made for a fine fall night of sports spectating, but the experience was marred when we found ourselves stopped en route behind a car with bumper stickers shouting that “‘Koch’ and ‘Bain’ are Four Letter Words” and “Corporations Are Not People.”
Noting the heftiness of our friend’s vehicle we urged him to ram into the offending bumper, but he told us that he had already considered the option and decided against it. We immediately forgave our friend’s soft-heartedness, yet that random motorist’s loudly proclaimed political opinions annoyed us throughout the night.
The “Koch” on the first bumper sticker referred to the Koch brothers, the billionaire oil-refining magnates who have become the bogeymen of the left because of their unapologetic advocacy for capitalism, and the “Bain” referred to the venture capital firm that rescued a number of important American businesses from bankruptcy, which is also reviled by the left because it was run for several years by failed Republican presidential candidate Mitt Romney. Despite the left’s fondness for four-letter words, we took the sticker to mean that the motorist found something foul about the names. Both are indeed four letter words in the literal sense, and we credit the bumper sticker’s author with being able to count that far, but we doubt that random motorist could have given a coherent explanation of why either should be considered obscene.
An aspersion on the Kochs seemed especially ridiculous on a car here in Wichita, where Koch Industries is a mainstay of the local economy and a generous benefactor to many local charities. Indeed, we were headed at the time to Charles Koch Arena, the venerable old “roundhouse” that has been nicely refurbished through the generosity of its eponym, and it’s difficult e for the more high-minded citizens of this city to visit any of our local cultural institutions without finding similar evidence of the family’s philanthropy. The Kochs also fund a few free market think-tanks and activist groups, so perhaps such exercise of freedom of speech is what the motorist found so objectionable, but even so it doesn’t seem something worth bothering other drivers and their passengers about.
President Obama’s recent re-election campaign spent many millions of dollars publicizing the evils of the Bain Capital Group, accusing it of everything from massive lay-off and off-shoring of jobs to causing on employee’s wife to get cancer, so it might have been that relentless onslaught of propaganda that provoked the motorist’s indignation. The Bain group prevented a lot more lay-offs and off-shoring than it ever caused, and the wife-killing charge was dismissed by even the most reliably Democratic media, but some people seemed to desire a villain to vilify. The other bumper sticker suggested it was a more general anti-corporate sentiment, though, which the motorist would also be hard-pressed to coherently explain.
Aside from the incongruous fact that the bumper sticker was affixed to an automobile manufactured by a large corporation, and the motorist had therefore chosen not to transport himself in something made by a hippie commune or lesbian co-op, we were offended by the sticker’s implication that there is something sub-human about corporations. Corporations are not people, not if you want to get so strictly and snottily literal about it again, but they are comprised of actual people who deserve their constitutionally enumerated rights. Labor unions, universities, non-profit charities, and similarly fashionable entities are not people, either, and there is no reason why people should be able to organize themselves into any sort of collective other than corporations without sacrificing their rights.
Our encounter with that opinionated automobile wouldn’t have been so galling if its bumper sticker sentiments hadn’t become the governing philosophy of our nation. The same simplistic aversion to commerce now underlies the government’s approach to tax policy, regulation, and spending, and permeates the broader culture as well. Liberals take pride that the war on business seems to be going so well, yet wonder why the economy continues to suffer. Envy is also a four-letter word, as our friend our remarked, but it seems to be the driving rationale for our politics.
On the brighter side, the ‘Shockers easily won the game against their erstwhile arch-rivals and improved their season to record to an unblemished 7-and-0, a surprising result for a team thought to be in a rebuilding year. Should the team become any more successful, we’ll probably soon be seeing bumper stickers grousing that “Shockers Aren’t People.”

— Bud Norman

About That Tax Break

One of our favorite moments in Wednesday’s presidential debate, among many, came when Barack Obama launched into his frequent complaint about the tax break for shipping jobs overseas. Mitt Romney responded that in his many years of big-time business he had never encountered such a tax break, and joked that perhaps he should have been hiring better accountants.

Obama made much of the line when attempting to do post-debate damage control at a campaign rally on Thursday, mocking the supposedly savvy businessman for his ignorance of the most basic business practices. The crowd of adoring fans ate it up, because of course there’s a big tax break for shipping jobs overseas. Everyone knows that.

As with so many of the things everyone knows, however, a moment’s reflection should raise suspicions about whether it is actually true or not. Did some congressman actually stand up in the House or Senate and propose a Tax Break For Shipping Jobs Overseas Act? Did a president actually hold a signing ceremony for such a bill upon its passage by a majority of reelection-seeking politicians, and proudly proclaim that America would now enter a bold new era of mass domestic unemployment? Did such an outrage actually go unnoticed by the press and the American public? Anyone willing to believe so would probably also believe that Romney has remained competitive in a national election on a platform of tax hikes for the middle class and tax cuts for the filthy rich, but Obama seems to be doing well enough with that line and will likely find a few takers for the shipping-jobs-overseas-tax- break canard as well.

Obama’s more sophisticated supporters, of which there are a few, will roll their eyes and explain impatiently that he’s talking about the tax deferral provisions for foreign profits earned by multi-national corporations. This takes the discussion far beyond what everyone knows, naturally, and Obama is surely hoping that it goes so deep into the forbidding thicket of tax code complexity that only the most intrepid policy wonks will dare to investigate. Those who do take the time and effort to understand the rule and its consequences will likely conclude that it is a sound policy and that Obama’s proposed revision is a bad idea.

Put in the simplest terms we can muster, current law allows American-based companies that do business in foreign countries to defer paying the 35 percent corporate tax rate until the profits are returned home. Because doing business in foreign countries usually entails hiring some natives who are familiar with the local language, laws, and culture, and in some cases factory workers making products that can be more cost-efficiently shipped to local markets, this can indeed be construed as a “tax break” for overseas jobs. Never mind that in most cases the jobs are being created rather than replaced, and that in almost every case the jobs would not be created in America for logistical reasons that a law cannot change, or that the taxes are eventually being paid at the highest corporate rate in the industrialized world, its close enough to a tax break for shipping jobs overseas for government work.

The outraged crowds at the Obama rallies should stop to consider, however, that their candidate’s proposal to eliminate the rule will put American companies at a competitive disadvantage in global markets. Other countries don’t tax foreign profits at all, much less at the highest corporate tax rate in the industrialized world, so they’ll be able to offer much lower prices than American firms paying taxes to both the foreign country and the homeland. Many companies will eventually respond by leaving America altogether, taking their jobs and tax revenues with them, and the ones that stay will be the ones that can lobby and contribute their way to other favors.

Many of the screaming fans at the Obama rallies will be quite happy with anything that hurts those darned corporations, which are somehow blamed for keeping the American economy in its current sluggish state. Obama was back to bashing those evil corporate jet owners in Wednesday’s debate, a habit that annoys even his most ardent supporters here in Wichita, “The Air Capital of the World,” where evil corporate jet owners are the lifeblood of the local economy, and anti-business rhetoric continues to be a staple of the campaign.

The real reason that corporations aren’t hiring in America, apparently, is because they just aren’t taxed, regulated, and demonized sufficiently here. Everyone knows that.

— Bud Norman