Wednesday, November 16, 2011

Why Occupy Wall Street resonates with people

FAIR TAXES: Some of the largest corporations in the United States paid no taxes over the last three years – some of them even made money through tax credits and refunds. The federal tax code imposes a 35% tax on corporate profits. But 30 of the 280 firms examined in a recent study, in spite of being profitable, either paid no taxes or earned additional profits through legal loopholes.

Tax loopholes distort the economy, biasing playing field in favor of enterprises that have succeeded in influencing Congress and the regulatory process to advantage their business. This bias unfairly disadvantages other industries, skews the markets ability to allocate resources efficiently, and increases the tax burden on taxpayers who have the least direct access and clout in Washington, i.e., individuals. The distortion reflected in the above graphic demonstrates that free market capitalism is not alive and well in the United States.

Bill Moyers has recently made similar points in an essay that is well worth reading at the Huffington Post, “People ‘Are Occupying Wall Street Because Wall Street Has Occupied the Country'” (November 2, 2011). Two excerpts are especially memorable:

·         “It is the editors of The Economist who are warning us that ‘The United States is on its way to becoming a European-style class-based society.’”

·         “From the bosom of the mainstream media [Time Magazine] comes the bald, spare, and damning conclusion: We now have ‘government for the few at the expense of the many.’”

No wonder the Occupy movement’s protest against the 1% resonates with so many!

POLITICAL CAMPAIGNS: In 2008, Procter & Gamble spent $8.7 billion on marketing and advertising their razors, detergents, and other products. U.S. presidential candidates in 2008 spent $4.3 billion on their campaigns. Comparing the two numbers and weighing the relative importance of consumer products and the U.S. presidency, the $4.3 billion does not seem especially excessive. However, the emphasis on fundraising and the access to politicians that money buys results in a tax code biased against ordinary individual taxpayers and a host of other problems. The net effect is to move the U.S. toward the type of society Bill Moyers described so poignantly in his Huffington Post essay, “People ‘Are Occupying Wall Street Because Wall Street Has Occupied the Country'” (November 2, 2011).

MONEY SPEAKS: Readers who doubt that money buys access and influence would do well to read “A Financial Incentive for Better Bedside Manner” in the Wall Street Journal (November 8, 2011). Beginning in the autumn of 2012, Medicare will begin to factor patient evaluations of healthcare providers into payments to those provides. Consequently, providers have already begun taking steps to improve the quality of providers’ “bedside manner” and to emphasize the relational dimension of healthcare. Financial incentives alter behavior – the Wall Street Journal article is just one more example of that proven principle. Although the powerful and wealthy persist in promulgating uncompromising denials, the same principle applies to politics. Financial incentives, in the form of campaign contributions, alters political behavior and warps both national political and economic structures to the advantage of the wealthy and disadvantage of the 99%.

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