FORTUNATE SON
JANUARY 2013
It ain’t me. It ain’t me. I ain’t no fortunate son.
Credence Clearwater Revival
Once again, it pays to hire well-connected lobbyists; it pays to be a fortunate son. The big winners in the fiscal cliff deal were those deep-pocketed special interests. $76 billion in tax credits for the likes of General Electric, Goldman Sachs, Hollywood and even my old friend Captain Morgan.
First off, I could care less how deep anyone’s pockets are, what I don’t like is when those deep pockets are utilized to make the playing field uneven. For example: the New York Yankees catch a great deal of flack for spending large sums of money on players that other teams cannot afford. I have no problem with this. They earned the money fair and square and if they want to use it to better their team, so be it. However, if wealthy teams could use their capital to lobby the umpires to make calls in their favor, or even change the rules to favor themselves, the sport of baseball would be over. That is exactly what is happening with capitalism in America. Capitalism is dying a slow and painful death. With public/private partnerships and crony capitalism all the rage, the young entrepreneur with all of the dynamism they bring to our economy, is becoming a figment of our past.
This $76 billion deal was crafted back in August in a Senate committee and sat dormant like those Alien egg pods from the classic science fiction film, waiting for the opportunity to implant itself inside a rushed piece of legislation. The deceivingly innocuous sounding Family and Business Tax Cut Certainty Act of 2012 was for all intents and purposes copied and pasted into the already ridiculous fiscal cliff legislation. Other big winners in this were biotech companies, wind-turbine-makers, the bio-diesel industry, and of course, all of those ethically challenged lobbyists such as: former Senators John Breaux D-LA and Trent Lott R-MS. The Washington Examiner reported that General Electric and Citigroup hired the dynamic duo to extend a tax provision that allows multinational corporations to defer U.S. taxes by moving profits into offshore financial subsidiaries. The provision is called the “active financing exception,” which is utilized by the likes of General Electric to avoid nearly all U.S. corporate income tax.
I am no fan of corporate taxes. I believe that the corporate tax does nothing but tax the customer, as all corporate taxes are priced into the products that companies sell. The corporate tax essentially turns a company into an agent of the Internal Revenue Service. With that being said, like it or not…we do have a corporate tax. If you are going to have a law, should it not be applied equally among all the citizens and entities of our republic? Crony capitalism and the politics of fortunate sons has become a modern day “divine right of kings” that our revolution sought to break us free from.
