Saturday, August 14, 2010

On Profit

I start with this quote from a friend of a sibling:
So these corporations burdened by American taxes must be being crushed by their tax burden. Oh wait Exxon has Broken the recorded for most profitable company in world history every year how? Oh by not paying any of these burdensome taxes due to loop holes and corporate welfare. why are politicians defending the right of corporations to protect obscene profits on the backs of the poor and middle class? Easy because of the campaign donations needed to keep their jobs I will bet you money that if we ever switched to public financing of elections they would all change their tune.
1) Corporations don't pay taxes. Oh, we send them tax bills, but they are in busines to do one thing - make a profit providing the public with their product. They pass every penny of their taxes onto us - the employees of their company with lower wages/benefits and less hiring, and the consumers with higher prices. If we increase how much Exxon pays in taxes, either by closing their loopholes or raising rates, they aren't going to just eat it. They will raise their prices . . . they will lay people off .  . . they will close refineries . . . they may just leave and become a distributor to other oil companies. All of those options hurt our economy.

2) Exxon sets profit records in terms of DOLLARS, but that is the wrong way to look at it. Liberals like to follow the words "Bush tax cuts" with the words "for the rich." They base that on the number of dollars the rich saved, but that is also the wrong way to look at it. In terms of percentages, the middle and lower tax brackets got a larger cut, percentage wise, in their taxes. Yes, somebody making 1,000,000 dollars a year saved $30,000 in the Bush tax cuts of 2003. And yes, somebody making 100,000 only saved $5,000 on their taxes. Looks bigger huh, but as a percentage of income, the second person saved more.

In terms of profit, Exxon's profit margin was 7.75%. That is only slightly above the oil industry average, and the industry average is below dozens of other industries. So how did they have record profits in terms of dollars? They have a HUGE gross revenue from how much they do. Should we be mad at them for that? No, they employ tens of thousands of people.

Without profit, do you think anybody would have even built the first oil rigs? Why would they have done it? Because it made them feel good? No, profit drives innovation, invention and investment.

3) On the backs of the poor and the middle class? Talk about a "talking point". Tell that to the millions of people who work in the oil industry that wouldn't have their jobs without profit. Tell that to the people who invested in Exxon when it first started and took a huge risk with their money. Tell that to all the middle class people, silver haired old ladies and pension funds whose incomes and growth depend on companies making a profit for their retirements. Exxon paid over 6 Billion dollars in dividends into those investors accounts.

What happens to profit? It gets put into reserves for lean times so they can pay their employees if things get rough. Yeah, oil is a very depression resistant industry right now, but that's not their fault. Many other corporations make huge profits, bigger in terms of percentages. Those reserves save jobs.

Profits from one period are what they use in the next quarter to open a new refinery/store/factory, or upgrade the ones they have to be safer and more efficient - in benefit to the employees and investors.

And, profit gets put into charities to help the poor and less fortunate. Yet, Obama's proposed budget eliminates the charitable tax deduction for the rich in 2011? Why would he do that? Because liberals want the government to make all our decisions for us. They don't want us to have the choice of who to help, they want to take as much as they can to "help" the poor, who then become dependent and enslaved to government.

Problem is, you eventually run out of other people's money, especially when there is a disincentive to making it in that if you cross a magic number, you have to pay even more to the government. Why make 125,000 when at 124,000 you aren't mentioned in the descriptions of "the rich" that are going to get a tax increase? Right now as ObamaCare stands if you have 19 pizza parlors, you don't want to open a 20th, because it means you'll have to publish the calorie counts for every possible topping on every size pizza in all your menus, every time anything changes. The cost of opening a 20th parlor is not worth it, so the employment that would be gained by doing it for the community is never realized. Taxes and regulations always create disincentives to growth.

4) What would public financing change? We would also have to get rid of free speech. If the companies couldn't give directly, they would buy their own advertising. The only way to stop people YOU don't like from having a voice in politics is to take away one of our fundamental rights. You can argue that corporations aren't people, so they don't have the same rights, but you're wrong. They are people. Corporations aren't led and staffed by robots, they are people and it their moral responsibility to fight for the things that keep their employees and investors happy and protected.

See, the underlying thing here is that liberals want more of their money, so they can pay for the health care, food and welfare of people that won't work. I'm all for taking care of people that can't work, but if you just won't, that's their choice. The problem is you CAN'T GET MORE MONEY FROM CORPORATIONS. Any tax on corporations is a tax on EVERYBODY. Actually, it taxes even the very poor, as that set of plates made from plastic which is made from oil that they buy for their table will cost more to pay the taxes. It taxes the middle class, as the tires for their car made from rubber which is made from oil (using this since Exxon was the liberal's example) now cost more to pay those taxes.

5) The ONLY solution to reducing the influence that corporations and lobbyists have on our lives is one that liberals will hate to hear, or read in this case: Massively cut government programs and taxes. The more money flows to Washington and the more they are spending and the more ways they are spending it the more people/organizations will flock to K Street for their piece of it.

For example, if government left it to a private organization similar to Universal Laboratories to test and approve drugs, and they stopped providing drug coverage, why would the pharmaceutical industry even need a lobby? And how much money could they save consumers if they didn't have to spend money lobbying for higher prices (which government support encourages). Competition would force them to keep their prices low as a UL type agency would have more incentive to let multiple companies produce a drug that lobbied government agencies don't.

Instead, we have provisions in ObamaCare to not cut drug reimbursements as a deal made with the White House to get $100 Million in advertising in support of the bill, which still was crammed down the throats of a public that didn't want it . . . The AMA was promised that Medicare reimbursement reductions would not go into effect in order to get their support. Leaving out the "doc fix" made the health care bill "deficit neutral" (what government program EVER costs what they say and collects what they say? Zero), but the CBO scored it as at least $150 Billion dollars in deficits over the ten years with the "doc fix" in there. Guess what? "Doc fix" was passed in June, and has to be refreshed every year.

And here's the other thing: Both sides like to make a big ruckus about certain groups having influence. Conservatives are unhappy that the Apollo Foundation, where avowed Communist Van Jones now works, wrote the "stimulus" bill. Liberals are unhappy evil employment and pension fund providing corporations get loopholes passed.

But again, we can't stop any organization for standing up for the interests of their members, because that's free speech. We can, however, by getting government less involved in our lives, take away their reason for needing to be in Washington lobbying. Then we'll only be left with liberal organizations lobbying for government to take more control of our lives so they can get money to do it . . . ACORN is perfect example of an organization that wouldn't have gotten their billions without government meddling in the housing market.

Post is too long already, more later . . .  :)

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