H O W A R D S B E N D

The Occupy Wall Street (OWS) movement had a very good week.  Their brand recognition is growing.  TV ratings are soaring as updates are now carried during prime-time.  OWS has also opened many new oversee markets culminating with protests across the globe this past Saturday.

As word of the movement spreads, there is a growing number of strong sympathizers and people wanting to get involved who are just not going to grap their sleeping bags, camping gear and  tents to join the ranks occupying some downtown square or plaza.  It is time to give these non-protesting supporters a realistic action plan that does not require them to give up a good home-cooked dinner.

The banks and the investment banks have become the initial target of “corporate greed”.   Why banks?  From about 2002 through 2008, the banks and investment banks had collectively issued or bought millions of the bad “subprime” mortgages  and then packaged these loans and sold them to our pension funds, insurance companies and small local banks.  During this period, these large banks earned billions in profits.  However, when the market for this product collapsed and these banks were caught with hundreds of billions of these loans in their collective portfolios, they relied on the governement for close to a trillion dollar bailout.  Of course, these bankers paid themselves billions of dollars in bonuses despite huge corportate losses.

Ironically, as these banks have returned to profitability, they are now foreclosing on mortgage holders at record paces.   Many of these deliquent mortgages are probably the same mortgages that the banks and investment banks were holding during the government bailout.  These banks are mercessly kicking people out of their homes forgetting that they would no longer be in business if not for the governemnt bailout.

So it is very logical that the banks should be the first target of any movement attacking corporate greed.  Below are some steps that non-protesting supporters of OWS may begin to take

1. Move saving and checking accounts to small local banks.  This is something that Arianna Huffinton tried to promote recently and it is time to encourage people to move funds from the mega banks located on Wall Street to your local credit union or small bank. This will deny these big banks the capital necessary to make the next round of unsafe investments with our funds.

2.Stop using your credit card.  The big banks which fund most of these credit cards earn about 2% for each credit card transaction.  This is a very lucrative profit center for the banks.  Carry cash and when you pay with the cashier say something like,”I support OWS.”  This little verbal announcement will alert the cashier of a growing movement and if you say it loud enough maybe the two people behing you in line will also get the message.

3. Pay down your credit card debt.  Banks earn huge profits on credit card debt.  They charge the borrower about 18% to 25% of the credit card balance while banks can borrow from the Fed or use our deposits and pay 1% to 2% for the use of these funds.  This is an outrageous profit margin and large part of a bank’s total earning.  In 2004 (the last year I could find), banks earned $30 billion from their credit card business which explains the continuous stream of credit card solicitations.

4. Conserve oil and gas.  This may seem off track but investment banks have invested billions of dollars in oil futures.  They are betting that the price of a barrel of crude oil will skyrocket with widespread disruptions in the Middle East.  It is estimated that about $30 of the $85 price of a barrel of oil can be attributed to this activity.  A sudden glut of oil would cause the price to plummet creating huge losses for these Wall Street speculators.

These initial action steps might seem too simplistic to combat the greed of Wall Street.  However, these steps allow sympathizers to get involved without taking to the streets.  These steps do not really  make a difference  if only ten people stop using a credit card or pay down their credit card debt.  These action steps only have an impact if ten million people stop using credit cards.

Please spread the word and please offer any suggestions that you think might be challenge the greed of these large banks on Wall Street.

For the past few weeks, I was annoyed that the “main-stream media” was ignoring a growing grass-root movement that was directly challenging both established politics and social and economic hierarchies.  Was the “Occupy Wall Street” movement too threatening to the establishment? Perhaps it would stoke the fires of revolution burning inside an alienated and struggling growing number of people, disillusioned with the current state of affairs.  Has the Arab Spring morphed in our country to Fall of Wall Street?

I had to find out for myself why coverage of this spreading revolution could only be found on “leftist” media outlets.  So this past Sunday, I ventured to Zuccotti Square in the middle of the Wall Street area to see first-hand what was transpiring.  Quite honestly, I do not believe that I witnessed the early phases of  populist movement that had the potential to inspire more and more people to join their cause.  I do not believe that I saw a viable force that could challenge the way that our large corporations peddle their influence over the politicians with their large and and secretive campaign contributions.  I did not see a power base that would be able to stand up to the “barons” of Wall Street and demand the same kind of financial relief for its defaulting mortgage customers that was given to bail them out of their financial calamity.

What I did see in the  “Occupy Wall Street” movement is a collection of warm and sincere individuals that proudly although quietly condemn the profit motive blinds corporate America.  This group of about 500 protesters enjoys the comfort of a community with shared beliefs.   They politely remind onlookers and any passerby that there is lack of moral and humane values demonstrated by our large corporations. However, there is an overriding sense that these individuals are misplaced in a modern technological world.  These are the “hippies” from  Haight Ashbury who have kept the cause alive for 50 years later.  They are joined by another group of people mostly in their early 20s that are reminiscent of these “hippies” in their youth.  Together, they have created a cozy and very democratic environment where they collectively can chant their disappointments and frustrations with our current state of affairs.

However, this revolution is not ready for prime-time.  The group of citizens gathered on Wall Street with their political and social gripes do not really inspire.  Their demands are vague and their solutions are lacking.  I now believe that this movement was passed over by main-stream media because it was not that interesting of a story.  These protests are not unusual and not that interesting.  The feeling is that the movement will end once the cold weather descends on Wall Street and that business will continue as usual.  The media has avoided this story because the movement feels like an old re-run and not a new and exciting story ready for prime-time.

Quite honestly, I do not like Rick Perry and have no faith or belief in any of his prayers or proposals to solve our nation’s problems.  However, I do believe that he was correct when he stated that “Social Security is a Ponzi scheme.”

The world, represented by the media, reacted with shock and horror at such an outrageous claim.  His fellow Republicans seized the opportunity to attack the perpetrator of this comment as an evil man who would deny our retired senior citizens their just rewards after many decades of hard work while contributing religiously to their retirement fund through their social security payroll deductions.  The Democrats sneered among themselves that the number one Republican candidate for 2012 just shot himself in the foot.  The Democrats are the absolute defenders of the Social Security system while Republicans want to deny retirees their well-earned retirement benefits.

However, most of us know that there is no Social Security Trust Fund that contains real money.  This Trust Fund is filled with a collection of government IOUs in the form of Treasury bonds.  This situation is the same as a private company that takes out retirement funds from its employees’ paychecks and forms a trust fund that invests the dollars back into the same company.  The expectation of receiving one’s retirement is directly tied to the economic performance of the company in which these funds were invested.

The situation is the same with Social Security except our funds are being invested in the US government and our ability to receive our retirement benefits is totally dependent on the future credit and good standing of the US government.  The government which is running approximately a $1.3 trillion annual deficit must continue to borrow to pay all its obligations including Social Security payments.  It seemed absurd until about six months ago that the good credit standing of the US government would every be in jeopardy.  We have gone through two fiscal crisis in the past six months where a government shutdown threatened to send the US into default on its debt obligations.  Under a default scenario and the inability to continue to borrow to meet its shortfalls, the federal government would have to pick and choose which obligations it would continue to fund.  Social Security payments would have definitely been on the “cutting board.”  The Republicans again this week are again holding the federal government hostage for an additional $3 billion payment to FEMA refusing to give the government additional funds without offsetting cuts in the federal budget.  Again the government shutdown is a possibility and again Social Security payments are threatened.

Even if the government averts this immediate crisis and the next twenty crises  , the Democrats have made it known, in an effort to deal with the longer term mounting federal debt,  that they will be willing to make changes to the Social Security payments.  Therefore, the social contract that we believe that we agreed to when we started having funds withdrawn from our paychecks many years ago will be changed.  We are now being told to expect to work more years and get less annual benefits for this additional work.  It is like buying an annuity that promised to pay 5% beginning in year ten and instead being told that this annuity will pay 3.5% beginning in the 15th year, maybe.  This sounds like a Ponzi scheme to me.

As summer draws to a close, President Obama asks his two girls, Malia and Sasha, to join him at the kitchen table to discuss some family policy…

President:  Girls, you know the summer comes to a close this weekend, and therefore I hope you agree that we cannot further extend the very late-night bedtimes that you enjoyed for the past few months.

Sasha:  Daddy, I have to disagree with your point.  These late nights are  very stimulative for our growth, as many great TV shows do not come on until late at night.

President:  Over the past summer, we have granted you the additional freedoms that come with early adulthood and instituted a very liberal bedtime policy. This bedtime policy was instituted to stimulate your non-academic endeavors.   However, Labor Day is the deadline for this policy, and we will not extend your late night privileges any longer.   I think that 9:30 is a fair bedtime given both your ages.

Malia:  Daddy, first and foremost, I am three years older than Sasha and will never consent to having the same bedtime as my younger sister. 9:30  is simply ridiculous! I am NOT budging from 12:30.

Sasha:  Daddy, there is no debate.  You are absolutely wrong.  I say 12:30 as well.

President:   Labor Day is our deadline, and this must be worked out by then.  I agree 9:30 might have been a little too early, how about 10:00 for Sasha and 10:30 for Malia.

Sasha:  Daddy, you are not neogtiating fairly and I don’t accept any of your premises.  I’m leaving!

President:  Sasha, please come back.  Come on, Sasha, please come back to the kitchen table.

Malia: I cannot believe you’re just sitting here as Sasha walks out.

Prsident:  I will deal with Sasha later, but I think 10:30 is fair for a 13-year-old.

Malia:  Dad, I am not giving up Jon Stewart who comes on 11:00. It’s the only way I get my news!  And you know I have to see the Letterman monologue! I always watch his first guest.  That takes us to midnight…and then Sasha and I usually have a little snack before bed.  By the time we brush our teeth and put on our pajamas it will be 12:30!

President:  OK, tell Sasha it is 12:30.  I am glad we had a chance to discuss the matter and come to a fair compromise.

Do you want to support farm subsidies? – $24 billion       Y___       N___

Do you want to support corn to ethanol subsidies? – $6 billion       Y___       N___

Do you want to support oil company exploration subsidies? – $40 billion       Y___       N___

Do you want to support the production of the new F35 fighter plane? – $30 billion       Y___       N___

Do you want to support the Program for Arts and Humanities? – $1 billion       Y___       N___

Do you want to support cancer research through the Department of Health? – $2 billion       Y___       N___

Do you want to maintain the corporate jet tax deduction? – $2 billion       Y___       N___

Do you want to support our space program through NASA? – $3 billion     Y___    N___

Do you want to continue our foreign aid and assistance program? – $10 billion     Y___    N___

Our representative form of democracy is failing in many ways, but most dramatically in establishing the federal budget.  Over the past number of years, Congressional members are serving more and more their corporate sponsors which results in either specific spending programs for these sponsors or very favorable tax breaks for these same companies.  Both result in a drain on our federal coffers. Today, all Congressional spending decisions are held hostage by a group of approximately 60 House Tea Party members, representing 15-18% of our population, who want to indiscriminately cut hundreds of billions, mostly in social programs and our traditional social support networks, form the federal budget.

There has to be a better way that will get people more directly involved in federal decision and not rely on their elected representatives that are at the “mercy” of their corporate sponsors.  I am proposing that each year we include with your tax form a menu 8 to 10 discretionary spending items.  We ask the people to chose if they would like to support the various programs.  For instance, we ask the public if they want to support farm subsidies for $20 billion per year.  If you select “No”, your tax payment for the year will be reduced by a pre-determined amount, say $1,000.  If you chose “No” for the ethanol subsidy, your tax payment is reduced say another $250.  The federal budget for this payment or tax subsidy is then adjusted for the percentage of people voting for the specific item.  If only 25% of the people support the farm subsidy, then the federal spending in this area has to be reduced from $24 billion to $6 billion.  If only half the people support the ethanol subsidy, then the federal budget is cut in half.

Congress would have to establish guidelines for this program.  For instance, our new “Super Congress” could pick the 10 items which will appear on the tax form.  Of course, these items will have to be chosen from the “discretionary” items of the federal budget.  Once an item appears on the tax form, it cannot appear again for 5 years so that if farms subsidies is reduced to $6 billion then that item cannot appear on the tax form  for the next 5 years.

This program does not really address the revenue side of the federal budget.  However, this program can be the first step in making our democracy more  “democratic” and less dependent on representative who are not really representing their constituents.   This program does not help reduce the federal deficit as all spending cuts are linked dollar-for-dollar  with tax-cuts.  This program begins the process in which the population of America begins to feel more tied in to the budget process and therefore in the long-run will work to get involved in reducing the federal deficit.

In February 2008, Michelle Obama, at a rally ironically in Wisconsin, proudly boasted that “for the first time in her adult life, she was proud to be an American”  (see link below).   No doubt that sentiment was a response to the country’s overwhelming support for a candidate who promised to bring about the long-awaited fundamental change to our political system.  The year 2008 seems like ancient history.

Well today I’d like to ask Michelle Obama a follow-up question:  “In the year 2011, are you still proud to be an American?”

Are you proud that the President capitulated to the Republicans’ demand to extend tax cuts for the richest Americans wreaking further havoc on the out-of-control federal deficit?

Are you proud that the President’s new budget inflates the $700 billion military budget by $22 billion while it simultaneously slashes $1 billion for financial assistance to seniors for their heating bills, and steals another $1 billion from food subsidies for impoverished children?

Are you proud that the President’s budget protects and preserves $20 billion in farm subsidies and $6 billion in ethanol subsidies, even though most experts believe that these very inefficient forms of energy production only lead to higher food prices?

Will you continue to be proud of America if the Republicans are successful in muscling through many of the $61 billion ANTI-regulatory, ANTI-environment, ANTI-nutrition, ANTI-education, ANTI-economic development and PRO-business budget cuts they are currently proposing?

Can you continue to be proud of America if Congress is successful in repealing the new healthcare law?  Will you be proud if the EPA, FDA, Planned Parenthood and PBS/NPR crumble in the new year?  Can you state that you are proud of America if the “hope” and change we can believe in” vanish with the passing of the new federal budget.

I believe that we are now at a tipping point in America wherein the Republicans want to turn back the clocks 50 years.   We need to fight for the changes that we heard about in the 2008 campaign which should bring about a better tomorrow.  Will you be able to state in 2012 that “you are still proud to be an American”?

The country is rapidly approaching a fiscal train wreck, the scale of which has only been seen in “Super 8”.  Most train wrecks are of a sudden nature and almost impossible to prevent at the very last moment.  The fiscal train wreck that is approaching has been coming down the tracks for a few months now and will not hit for almost another two months and yet nobody is doing anything to prevent the pending disaster.

The US federal government is rapidly approaching the maximum limit on its debt borrowings.  It is expected that the US debt will hit approximately $14 trillion in early August.  At that point, the federal government will not be able to borrow additional  funds to pay its obligations and will mostly default on its debt obligations.  The default on our federal debt is expected to wreak havoc on the world’s financial system.  The Republicans are holding the federal government hostage as they demand massive cuts in federal spending in order to approve an increase in the debt ceiling.

“It is deja vu all over again.”  I am beginning to see a very familiar pattern develop in the approach to legislative impasses.  The Republicans put out their position which is always an extremely conservative position and state that there will be no compromises.  The Republicans in both the House and the Senate are 100% behind this proposal.  The Democrats then publish their position which has most of the Democrats supporting this position, but of course never universal Democratic support.  This Democratic position is already compromised from a truly progressive position and the Democrats let it be know that they will negotiate even further.  As we know, the Republicans do not negotiate at all and an important deadline approaches.

It is at this point, that the “Lone Ranger” President jumps into the negotiations.  Missing in action up to this point, the President, like our masked childhood hero, now steps into the fray with the clock ticking down.  The President took this approach on the international scale as he arrived on the last day of the Olympic Committee’s decision for the site of the 2016 Olympic Games and tried this same approach when he arrived on the last day in Copenhagen at the International Conference on Global Warming.  One both these accounts he failed to persuade the appropriate body of his viewpoint and in both cases he was turned down.

In domestic politics, the Lone Ranger does not like to partake in the long drawn out battles to win public opinion which would involve an extensive road tours constantly outlining his position.  Also involved in this process of passing legislation favorable to the party’s platform would be strongly convincing reluctant members of  the Democratic Party to stand together through this fight.  This would entail confronting his own party members.  The President prefers to come in the last minute to the stalled talks and convince his party to give the Republican Party almost everything they want eking a small token of reform for his own party.  We saw this approach in the healthcare debate in which the President never got his party to go along with the public option.  The President again used this last minute entry into the budget debate last December with the President conceding the tax breaks for the wealth and no reduction in tax benefits for large corporations in order to get the budget passed as the deadline approached.

The President has been missing in action during the debt ceiling debate.  The Republicans have put out their position demanding hundreds of billions in cuts in federal spending in return for increasing the debt ceiling.  The Democrats have no cohesive policy and the President has not been leading the debate.  Therefore, we can expect the President to approach the legislative talks again at the last moment in the beginning of August.  At this point he will make it clear “that his hands are tied” as the deadline approaches and that although he does not support all these cuts he will go along with them “in the name of compromise.”  The Republicans will get massive cuts to social programs, support of education and most likely cuts to Medicare and Social Security.  We will hear that time just ran out and the President will promise that next time he will not support such massive cuts.  “Who was the man?”

As I see it,  the Miami Heat only have two problems to work out before game six of the NBA Championship Series.  The first is their offense and the second is their defense.

I will start with the defense as this appears to be the easier problem to address.  The Heat trap the ball on almost every possession which means that two Miami defenders are on the ball trying to take the ball or force a weak pass out of the double-team so that it can be intercepted by a teammate off the ball.  This has not worked to create turnovers as Dallas is too good and too well disciplined to be forced into rash mistakes.  Dallas has seen this same defense for five games now and has the timing to turn this aggressive defense into an ineffectual and counter-productive strategy.  The Dallas player with the ball quickly passes away from the double-team to an open teammate.  Generally the Miami defense can rotate quick enough to cover the first pass, but Dallas who spaces the floor perfectly makes a second and sometimes a third pass around the court until someone is wide open for a jump shot.  Dallas has too many players that can hit a wide open shot.  The Miami defense should play a “stay-at-home” defense in which every Miami player sticks to the one man he is defending.  It might be difficult to guard Dirk Nowitzki with one man and he will probably get 35 points.  However, none of the other Dallas players are skilled enough to create their own shot and this defense will absolutely eliminate the wide-opne threes that defeated Miami in game 5.  This defense would allow Dirk is 35 with the four or five other offense players averaging 10 points each giving Dallas a total score of 75 to 80 points for the game.

The offense will be much harder to fix.  First, the Heat must take the ball out of LeBron’s hands as he likes to hold the ball thirty feet from the basket as the shot clock winds down believing he will make the perfect pass for the score or hit a three pointer as the shot clock goes off neither of these happening recently.  Put the ball in a guard’s hands and let LeBron work to get open either running through picks or posting up his defender.  Making LeBron work for the ball will hopefully get him into the flow of the offense.

Dallas has been using the zone to prevent Miami from penetrating and getting to the basket.  Against this zone, Miami should go small with Wade holding the ball and Chalmers and  Miller set at the three point line and James on the baseline.  Haslem sets a pick that lets Wade penetrate into the zone and as the zone collapses around him he can kick the ball out to his shooters on the three point line or find James along the baseline for a dunk or pass to Haslem who goes to the free throw line.  Against, the man-to-man, the Heat have demonstrated their efficiency on using the pick.  These picks have created mismatches with James being guard by Jason Kidd or Jason Terry.  James must take advantage of this mismatch and go to the basket instead of passively passing away from this key opportunity.  Also the Heat worked the pick-and -roll to perfection during the forth quarter of Game 5.  I would repeat this until it does not work anymore.

And finally, I might hang a big sign from the rafters stating, ” Michael 6, Magic 5, Kobe 5, Lebron  0.”  Let LeBron mew over what greatness is about.

Remember the “Golden Age for Democrats” when they controlled the Presidency, the House of Representatives and the Senate – three branches of government all at the same time.  This wonderful and glorious period lasted all the way from January 2009 up to and including December 2010.  What a fantastic period for the Democrats.  Although no really significant piece of legislation passed, unless you want to count the Healthcare Reform bill, it was still fun to be able to boast to our Republican friends that the Democrats controlled  three branches of government.

Well, the Republicans have handed the Democrats the opportunity to usher in the Second Golden Age for Democrats.  On April 15 of this year, 235 Republicans in the House voted in favor of the Ryan budget which would replace our traditional system for Medicare with a voucher system in which the federal government would pay a fixed sum to a Medicare recipient and this individual would have to go out to the private insurance marketplace and try to secure medical health insurance at whatever premium was then available.  They quickly learned at their town hall meeting during the Easter break that the American people might be for smaller government but not at the expense of their Medicare.  Harry Reid, moving with as much speed as he could muster, brought the same Ryan budget proposal to the Senate floor for a vote where 40 Republicans voted in favor of the bill that would end “Medicare as we know it.”

The Republicans are on the ropes.  They are being pounded in the polls where recent surveys should that 70% of Americans oppose the Ryan Plan.  They are being pounded in special elections as voters resist Republican candidates that support the Ryan budget.  Now is the time for the Democrats to provide the knockout punch.  The Democrats in the Senate  should immediately pass a bill that converts the medical coverage for members of the House and Senate to a voucher system.  Then the House members, especially the Republicans would then have to vote for a bill that converts their “Cadillac” health insurance program to a voucher system.  I would love to see Paul Ryan voting for a program that puts him on a medical insurance program that is paid for with a fixed voucher.  I guarantee we will see many House Republicans voting against a system that they recently supported. “First they were for it and then they were against it.”

The Democrats in the Senate should next bring up a bill that would offer the “voucher” program to all seniors starting today on a voluntary basis.  Seniors today, on voluntary basis, could chose to receive $800/month from the government and they would be responsible to secure private health insurance on their own.  The House Democrats who do not have the power to bring forth legislation could embarrass the House Republicans to pass a similar bill as this is the plan that they envisioned to save Medicare and have boasted would cut federal spending.  However, the plan to start will be on a voluntary basis with the voucher available today for and any senior deciding to go this route.The Democrats would claim that if this concept works, the program could be expanded.

The passage of such a bill would drive home the false nature of these Republican promises.  First, we can assume that this program will have very little interest to the overall senior population.  We will see what percentage of the senior population opt for this program and we will see which income levels this plan might appeal to.  Second, we will be given exact costs for a private healthcare plan for a senior with pre-existing conditions.  There will be no more hypotheticals.  We will be able to see what the monthly premium will be for a senior with diabetes and high blood pressure.  We will see if a senior with a history of cancer can secure private health insurance which would cover all the costs of his treatment.  We will see what major medical procedures are allowed and those that are disallowed by the private health insurance company.  We will also be able to compare costs and customer satisfaction between the public and the private plans.

The Republicans like to claim that the American people want choices and that the private market is the fairest judge of pricing services.  Therefore, I believe that if the Democrats in both Houses move to pass a Republican styled voucher system for healthcare, but on a voluntary basis, all the flaws and shortcomings of such a system will be exposed and as a result all the 235 House Republicans and 40 Senate Republicans would be questioned on their understanding of the country’s problems.  It will be clear that these Republicans are hypocrites and do not have real solutions for Medicare.  These pieces of legislation should result in total defeat of the Republican Party in the 2012 elections.

Well, I never thought that these words would come from my mouth.  I might be banished from all the liberal websites and progressive blogs.  I might shunned by left-wing friends.  But, there is no denying that it is time to cut the federal corporate income tax to zero percent.

Historically, corporate federal income taxes would amount to almost 30% of federal revenue.  Last year, the federal government collected approximately $2.2 trillion and corporate income tax revenue amounted to about 6% of this total.  This is a whopping $130 billion.  When the likes of GE and Exxon pay no taxes and in fact receive a tax refund, something is wrong with the system and needs to be fixed.  There should be a better way to raise tax revenue that does not wreak of hypocrisy and does not tie up billions of dollars and thousands of hours seeking to avoid this necessary evil.

Although the US corporate tax rate is 35%, the average tax rate actually paid by a US corporation is in the mid-20% range due to a host of tax advantages offered to corporate entities.  For illustrative purposes, let’s say that a corporation earns $100 million before taxes.  With an average corporate of 25%, this would equate to $25 million in federal tax revenues.  However, if the federal government has a 0% corporate tax rate, the company would have $25 million of excess cash.  What are the options for this company with this excess cash in its coffers?  First, the company might use the excess cash to pay additional salaries and bonuses.  Or, the company might pay out additional dividends to its shareholders.  In both these instances, the lost federal revenues would come back to government in the form of the personal income tax for those receiving the additional funds.  The tax rate on dividends would have to be increase from the current level of 15% to 35% to keep the federal government revenue neutral.  The other choice for this corporation with $25 million, or some portion thereof, in its coffers would be to invest in its own growth through acquisition of capital equipment or the acquisition of another firm that might make it more competitive in the future.  Although this investment portion of the might represent a loss in direct federal revenues, the federal government might recoup lost revenue if the acquisition is from a domestic firm in which case the profits go to the employees and shareholders and again would be recouped from personal income taxes.  As this $100 million net company grows from this capital expenditure, the federal government would recoup more taxes from employees as salaries increase or from shareholders as dividends are increased as the company increases its profits.

There are many benefits to a zero percent corporate income tax rate.  First, it makes our US manufacturing firms more competitive with foreign manufacturers.  As companies have more cash in their coffers, they have more funds to invest and to increase their competitiveness in the global economy.  Second, the  0% tax rate might draw foreign manufacturers to our shores. Foreign multi-nationals look for competitive environment to locate new manufacturing.   a few years back, Ireland cut their corporate tax rate to 12% and a number of multi-nations moved their operations there.  A 0% rate would draw new manufacturing to the States creating jobs for US citizens and generating more tax revenue for the federal government.  Also, corporations spend billions of dollars and thousands of man-hours on tax avoidance whether through the tax lawyers and accountants that are hired or through the numerous tax havens they must create and maintain just to avoid taxes  One Fortune 500 company has over 200 off-shore tax havens to shelter income from the US federal government.  All this time and money lost would be eliminated with a 0% corporate tax rate freeing up additional funds to invest in the company’s growth.

And finally, one of the most active forms of lobbying efforts in Washington DC, is tax avoidance.  Corporations use their lobbyists to petition Congress for tax breaks for their industries or for certain projects.  The passing of new laws to include these new tax deductions or tax credits take-up a good portion of legislative time and energies.  In addition, this process perpetuates the “money” influence in Washington as receptive Congressmen are rewarded for their efforts with campaign contributions from their corporate benefactors all the time perpetuating the corporate influence over these legislatures.

In conclusion,  this is not a traditional “liberal” proposal.  As the federal deficit soars, the talk amongst “lefties” is to reduce the tax shelters for corporations to bring more revenues to the federal coffers.  This has not worked in the recent past and I do not believe that it will work in the immediate future. .  I believe that by eliminating corporate income taxes the government can earn the same amount of revenues.  A 0% corporate tax rate will allow corporations to become more competitive and will hopefully draw new multi-national manufacturing companies to the US and create more jobs here in the States.