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Thursday, June 23, 2011

"Very Helpful Accountants"

Jun23rd, 2011

This is a pretty amazing examination of how American corporations are manipulating the tax code.

2 comments:

  1. A couple of thoughts. One short. One long.

    1) This analysis seems to support the Republican notion that US corporate taxes are too high to be competitive on the global market. This leads directly to the second thought.

    2) Karl Marx (oops, I said that bad name) predicted that this would happen in the mid 1800's. Much has been made of the Marxian Communist ideal. For the record (and any student of history) knows that Soviet Communism was not the true Marxist endgame. Anyone who tries to argue that the downfall of the Soviet Union was indicated a failure of Marx's economic theory hasn't read Marx.

    In fact, Marx believed that a true economic revolution would occur in an advanced political and economic society. Czarist Russia in the early 20th century was a political and economic backwater. It was a feudalistic society, utterly devoid of any political or economic sophistication. The worst thing for Marxist theory was Lenin's revolution. Lenin was impatient. He knew the basics, but didn't understand the arc of history, not to mention the fact that only the correct, precise conditions of an advanced capitalist economy could truly bring about the revolution that Marx understood was a necessary and somewhat dire consequence of pure capitalism.

    We are only now seeing the consequences of what Marx understood to be true. The "Economic and Philosophic Manuscripts of 1844" are, in opinion, Marx's finest work. In them he literally went through Adam Smith's "Wealth of Nations" line by line and extrapolated the consequences of the foundational theory of capitalism to their necessary ends.

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  2. The opposite reaction is clearly that profits are maximized where labor is cheapest. And when American labor is no longer cheap, where American taxes no longer low, capitalists MUST, in their own "rational self interest" export their labor requirements to those locales where labor is cheapest.

    This is not an argument for lowering US corporate tax rates. To do so would be economic suicide. This is simply understanding that capitalism has specific and necessary consequences.

    The rubber hits the road when all boats are floating equally high, and there is no longer a cheap labor market. That day has not yet arrived. But thanks the the literally INCREDIBLE growth (seriously, it's astonishing) of technology, that day is growing nearer year by year, month by month, week by week, day by day, and minute by minute that cheap labor will no longer exist.

    And then what?

    We are on a collision course with true global economic equilibrium.

    Capitalism cannot survive global economic equilibrium. Capitalism is dependent upon economic inequality. Why else would folks like the Koch Bros. be so bent on eliminating true competition?

    But the fact is that their time is coming to an end.

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