[image_credit]MinnPost photo by Peter Callaghan[/image_credit]
Throughout Minnesota’s last legislative session, the Minnesota Chamber asked lawmakers to follow a “do no harm” principle to guide the economy out of the COVID-19 pandemic and usher in an era of economic recovery. Our delegation in D.C. should follow this same principle, instead of raising taxes and costs.
The president’s recent budget proposal includes $3.6 trillion in tax hikes. These tax increases would be paid for by workers and families through lost jobs and lower wages and would impact thousands of small businesses.
Take the proposal to raise the corporate tax rate from 21% to 28%. This would hurt businesses of all sizes, their employees and consumers. If the corporate tax rate were increased to 28%, Minnesota’s combined rate, along with a proposed federal tax increase, would mean a combined top corporate tax rate higher than in any other country in the industrialized world.
On top of that, companies headquartered in Minnesota would face higher U.S. taxes on global income.
In total, this tax hike would hit 28,295 Minnesota employers, including 20,000 small businesses with fewer than 500 employees. Many of these businesses are just now beginning to get back on their feet. Sudden and substantial tax hikes are one sure way to stop their recovery’s momentum dead in its tracks.
[image_caption]Doug Loon[/image_caption]
Keep in mind, these tax hikes would not just be on businesses. They also would threaten investment in Minnesota startups and growing businesses. The president’s plan would essentially double the tax rate on capital gains, hitting approximately two-thirds of capital investment in the United States. For some Minnesota investors the combined state and federal tax rate would exceed 50%. If you’re saving for retirement, to buy a home, or for your kids’ college education, you’d feel the pinch.
Adding further to the burden, the president’s proposal would levy a much higher tax burden on the transfer of assets of family-owned businesses at death. This would threaten the ability of the next generation of Minnesotans to keep those family-owned grocery stores, restaurants, auto body shops, construction companies and farms up and running.
Bottom line: Raising taxes now would stop the recovery in its tracks. These tax increases aren’t pro-growth or pro-job policy. They aren’t part of the recipe for recovery. Hard-working Minnesotans – and all Americans – deserve better. I encourage my fellow Minnesotans to join me in contacting their representatives and telling them not to raise taxes that will hurt small businesses, workers and families.
Doug Loon is president of the Minnesota Chamber of Commerce.
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I personally think it is criminal larceny, the way we tax employment/wages in this country, while not taxing automation, Artificial Intelligence and out-sourcing taking away jobs, or pollution generally, but you can be guaranteed you will never hear about that from people who complain about the corporate or capital gains tax rate being too high.
Nor have I ever heard any Chamber of Commerce anywhere complain about the growth of monopolies, or the consolidation of wealth generally, or Private Equity laying waste to businesses or pricing out regular wage-earners from homes or young aspiring farmers from land.
“Higher taxes hurt small businesses” is a broken record I feel like I have been hearing on repeat for four decades now, with ever less taxes on Capital since, and ever less opportunity, wage growth or benefits for most of us despite those ever lower taxes on Capital.
This pandemic is proving to be the greatest transfer of wealth up the social pyramid in the history of the world, exceeding the previous record of the Great Recession. If you actually care about commerce, do something about that.
“while not taxing automation, Artificial Intelligence”
Also eloquently expressed by the horse owners’ association in 1900 to stop the horseless carriage before it gained a foothold.
I am sure WHD has removed all power tools from his craftsman activities and handsaws, hand planes and brace and bit are being utilized exclusively.
I think my argument is worthy of more than sarcasm.
I agree. Some of your points here merit more discussion. Would be interested to read a longer form essay of your thoughts on the topics you brought up. Perhaps a Minnpost Opinion article is in your future?
As for this current article, there’s just so much factually wrong and the obfuscation vying with pure fiction for top billing is comical. Broken record indeed.
Thank you Dave. That is the first time in a very long time here at Minnpost that I have been given an encouraging word.
I think my rejoinder is worthy of an answer.
Time does not stand still. To pretend that we can tax and regulate things to maintain a preferred “old time” status quo is detached from reality. I’m certain you understand what a biscuit jointer does and likely have one. It is an ingenious tool to improve efficiency. So are advancements in automation and “artificial intelligence”. If we don’t advance our nation’s productivity and competitive advantages and others do, it will be disastrous.
I’m OK with higher taxes, just don’t artificially limit competitiveness and the ability to be successful and pay those taxes.
I’m not talking about higher taxes. I’m talking about how can we not tax employment so egregiously compared to other things we could and should be taxing, but aren’t. If the point is about making sure everybody who wants to work, has access to good jobs paid well close to home, that seems like what we would want to tax least. If the point is to conflate success and progress with consolidation and monopoly, while depriving people over time of wage and benefit growth and opportunity and polluting besides, then I suppose we would want to tax employment more to make it even harder to work for or to run a small business. If we wanted to expand opportunity to the most people we might want to shift all the taxes over to things we don’t want so much, like consolidation, monopoly, out-sourcing, automation and AI eliminating jobs or downgrading opportunity for most people, and the polluting and destroying of ecosystems.
As for being the Luddite you think me, I’m just asking, where are all the great jobs paying enough to raise a family well, for people who don’t have a college degree, and even for many of those who do?
Otherwise I agree, we should make Job creation a lot easier.
“where are all the great jobs paying enough to raise a family well, for people who don’t have a college degree, and even for many of those who do?”
Yeah, “do you want fries with that” won’t get it done. Was never meant to.
There are a large number of great career opportunities in the trades. Every contractor and business I know, and I have been around awhile, is begging for good help. Mostly I hear about not being able to find yound people (in general) who want to come to work and earn their pay. Or no skillset at all. But hard work is required.
A college degree without a skill is a waste. Too many degrees, promoted by colleges to get money and put kids in debt, offer no real world skill sets. Too many History degrees.
Yes, in the context of work in the history of declining empires, a few things stand out:
1. A lack of work and corresponding desperation/despair for working class people.
2. Educating far more people for administrative/managerial/professional jobs than there are such jobs, while those who can’t find work sufficient to pay off debt sit around and discuss how to destroy the system.
3. The largess/consumerism of empire creates in many a citizen a sense of privilege such that their willingness to work declines.
“If we wanted to expand opportunity to the most people we might want to shift all the taxes over to things we don’t want so much, like consolidation, monopoly, out-sourcing, automation and AI ”
Just because you do not understand automation and AI, maybe we do want them. An example:
I was associated with a project for an implantable medical device. I suspect we all can agree that we hope the things they stick in our bodies have an optimal chance of being successful. In this case, a very thorough visual inspection was required of every device. 6 Teams of 4 inspectors providing 24-7 support. Of course the human eye can not always find everything and in this case the nature of the device flat out would not allow a visual of every surface. And the result was a pass/fail with no ability to quantify “how deep is that scratch” or “how large that pit”. The proposed solution was a fully automated system with both machine vision and laser sensors that could “see every surface” and quantify “how deep and big”. And the results would pass to an AI system that got smarter the more components it inspected. To design and implement this required a significant engineering and software development effort by many highly skilled and highly paid specialists. And yes, 24 visual inspectors will be assigned elsewhere within this large company and the medical device going into your body will be better for it. Or maybe you would prefer the earlier model that enabled the retention of more workers?
I’m certain if we Americans can create AI and all the various examples of automation, while we have a tax code that is 50,000 pages thick give or take, that no one really understands, I’m sure we could quantity a tax code related to AI and Automation, that which exists to replace human labor, and that which augments it.
Back to my example: It does 2 things, it eliminates one kind of job and replaces it with another and it increases manufacturing productivity, improving the competitive position of the company implementing it. We have 3 options:
1. Incentivize the company to invest in itself and offer tax incentives like sales tax abatement for capital improvements.
2. Do nothing
3. Penalize the company in some taxing way for what sin I do not know.
The bottom line is that productivity increases results in profitability increases that results in more tax dollars.
And we can argue about the rules and rates for those taxes, but profits are good, right comrade?
Are you really implying I am a communist because I think we should tax monopoly, consolidation, pollution, off-shoring, automation and AI instead of wages? Because we don’t tax those other things at all but tax the bejesus out of wages/employment?
So on the one hand we have less a percentage of adults working than at any time since the early 80’s, a declining labor participation rate for four decades, since the Reagan revolution favoring deregulation and the globalists on the left bowing before the corporations. On the other hand we have 50% of the working population barely getting by, the precariat ever at the edge of economic oblivion. So what you are saying is, it sounds like, that this is ok and inevitable because it is good for the innovators?
My example addressed automation and AI in the instance of a company trying to remain competitive in a global market. I worked with another company that produced a basic home owner / do it yourself commodity tool sold at the Home Depot for a few hundred bucks that would automatically be assumed to be produced in an offshore factory. It was not and a manufacturing director told me that they can and will compete right here with Minnesota labor: they’re not going to offshore because they have made investments in technology to keep jobs here by being globally competitive. That was over ten years ago and they have made huge investments in technology and nearly doubled employment in the time since.
You believe we need to punish this company with new taxes for their decision to not offshore and instead make investments in technology. Following your advice would have cost a few thousand well paying jobs in Minnesota. Back to where we started: your the chief lobbyist for the horse owners association trying to nip the horseless carriage in the bud before it gains a foothold in order to preserve buggy whip manufacturing.
I’ll second the agreement, although I admit I’m not sure how such a tax would work.
I imagine if America is the exceptional nation we claim to be, there would be plenty of people involved figuring it out.
Thank you, I came here and found what I wanted to say. Spot on.
Thank you, Barbara. That is very bold of you, pardon the pun.
Pretty disappointing to see MinnPost running Chamber of Commerce propaganda pieces.
The tax rate was dropped from 35% to 21% a few years ago, and these people are kvetching about going back halfway. Let’s face it, these corporate tax cuts have done nothing to improve the lives of average Americans.
They should be glad the proposal isn’t to set it back to 35% while also closing the endless loopholes that have allowed corporations around this country skirt their financial and societal responsibilities.
Everything you wrote is inaccurate. Fortunately many businesses were able to accumulate capital to get through the pandemic. Unfortunately many didn’t.
What are you talking about? The tax rates Ms. King cited are completely accurate. The rate dropped from 35 to 21 in 2017 and the proposal is to raise it to 28. Thats a 30 second Google search.
Corporate taxes are on net income. On profits. Businesses that lost money during the pandemic would not be affected by this.
Thank you!
One of the great con jobs that the business community is guilty of is letting ordinary Americans believe that companies are taxed the same as individuals. So Mr. and Ms. Average American think, “If my taxes go up, I’ll have less disposable income. If I didn’t have to pay taxes, I could afford to hire someone to clean my house. Therefore, if my employer’s taxes go up, they’ll be forced to lay people off.”
Wrong.
Businesses are not taxed on their total income, only on their *profits,* i.e. income minus costs of doing business. Suppose a company takes in $1 million per year. If it spends $990.000 on things like employee wages and benefits, supplies, leases of buildings and equipment, office furniture, machinery, R&D, temporary outside contractors (e.g.a plumber to fix a leaky faucet in one of the bathrooms), advertising, business travel, and all other costs of doing business, it is taxed on $1 million minus $990,000, or $10,000.
If its costs exceed its revenues, even on paper by means of fancy accounting tricks, it pays NO income tax.
The common belief that businesses will only raise their prices to cover taxes is also bogus. Since taxable income is revenue minus expenses, raising prices to bring in more revenue would only raise the company’s taxes, Say our hypothetical company was clueless enough to raise its prices 10% in order to pay increased taxes. That would bring in $1.1 million, and if costs remained the same ($990,000), the company would now have $110,000 of taxable profits instead of $10,000.
Anyway, if businesses want to lower their taxes, they can do so right now without any legislative actions by anyone. They can pay their employees more and give them better benefits. They can modernize their facilities. They can buy supplies and raw materials. They can train their employees for new technologies or responsibilities. They can expand their advertising. They can pay scientists and engineers to invent new products or improve old ones. Note that all of these activities create jobs for somebody, either in the company or outside it.
“Pretty disappointing to see MinnPost running Chamber of Commerce propaganda pieces.”
Congratulations to MINNPOST for running articles that reflect all points of view, spurring on conversations on their merits.
Go the the right wing information source of choice and try to find a dissenting view on anything. Echo chambers are not needed.
Boo hoo, corporate aristocrats gonna cry. Guess what Doug, wanna say you believe in meritocracy? The estate tax should be 100%.
100%?! Say goodbye to family businesses and generations of family property. We’re you joking?
I wouldn’t go to 100, but it should be raised. You can call it family business, but its still inherited wealth. The Trumps were a family business. Fred made a fortune, and his incompetent son Donald squandered it with one failed business after another.
You understand what meritocracy is supposed to mean yes? Which is why it’s so hilarious to see conservatives claim they desire it. You also understand that allowing massive generational wealth transfer leads inevitably to stratified caste systems, and eventually to feudalism, the true end goal of modern conservatism.
100% sales tax doesn’t sound like meritocracy at all, unless you want to call it meritocratic communism.
Umm, how exactly do you propose creating actually equal opportunity if you allow for generational wealth transfer? Simply pretend the advantage gained from wealthy upbringing doesn’t exist? You’re drifting off the narrative there WHD.
So if you work hard your whole life and become let’s say moderately sucessful – assets of $1,000,000 – it’s “unfair” to pass that on to your heirs? Money you have already paid taxes on?
The estate tax kicks in over 11.7 million dollars, so your hypothetical and umbrage are both safe.
If you wish to consider yourself as being in favor of individual merit being the sole and overriding determiner of “success”, yes. If not, you don’t believe in what you claim, instead you believe that those born in fortunate circumstances deserve an advantage over those that aren’t, by mere lucky circumstance of their birth. Furthermore, should you ALSO not be in favor of making up that difference through other means, ie social services, publically funded education, and the like, you then are in favor of that good fortune being continually being concentrated as the generations go on, until such time as those families become the defacto ruling class, over all others, feudalism, in practice, even if not officially named as such.
It’s also not a sales tax, but hey, reading, who needs it?
Excuse me, estate tax.
As for it at 100%, is there no way to pass to family a house, a car, a farm, a fishing rod, a collection of baseball cards or stamps, family heirlooms? Does an all-powerful government sweep it all up to send it to the Capital, the one equalitarian party returning a pittance, while everyone you know gets poorer every year?
Or we could just tax what we don’t want, progressively, such as consolidation, monopoly, aristocracy and the tendency to feudalism?
I can’t imagine anything more elitist than government agents sweeping in and taking EVERYTHING as soon as you are dead, removing it to the Capital, leaving partner and kids say, dependent on Dad, or Dad and kids dependent on Mom, destitute, because meritocracy.
Where did the sales tax come in? Unless that was a slip up, and you meant estate tax, you’ve missed the conversation. That said, I also don’t agree that the estate tax should be 100%. But it also shouldn’t have some special status – income is income. If there should be a special status on income, then I agree with you that income generated through work should be special. I might also believe that there should be a special rate on certain investments, but not like we do now, where safe bets get a tax break and foolish “investments” get a bank bailout.
Generally, this piece is all about selling the idea that businesses are inherently good, and as good things, they should be treated with praise and riches. The fact is, not all businesses are good. Very few tax breaks create jobs, only wealth for the already wealthy. And, quite frankly, not all businesses are going to survive. That’s the way it works. If we’re going to focus on helping small businesses survive, we really should focus those that actually create value for the community.
Also, just because someone is a “small business owner” doesn’t mean that anyone should care. I say this because I’m tired of people using the phrase “small business owner” like there should be a special title or something. For example, to all of those who include “small business owner” as a reason Ashli Babbitt, who breached the Capitol as a participant in a violent crowd that was chanting “hang Mike Pence” just feet from elected Congresspeople, shouldn’t have been shot, just…don’t. There are lots of reasons she shouldn’t have been shot, but all of those reasons were moot the moment she endangered the lives of our elected officials as part of an insurrection. It is sad, for sure. But I can absolutely say that I can think of a number of examples of people who shouldn’t have been shot, and yet were, that were doing far less dangerous-to-others activities, up to, and including, sleeping in one’s own bed.
The argument made basically says, all taxes are harmful to someone one way or the other, so the best solution is: no taxes, which means, no streets, no sewers, no police no infrastructure of any type. Not to mention the near existing $30T deficit, and how does that or the interest get paid or effect the economy, families, business’s etc. ? Yeah, instead of offering an alternative I have to agree with a couple of other posters, just don’t tax us uber rich, all you other suckers no problem, that and keep cranking up the deficit while the uber rich bank roll through tax avoidance schemes!
Well, where does one begin?
To start with we need to understand that Mr. Loon seemingly does not have a single day of private sector, for profit, capitalistic employment in his 35 year work career beyond lobbying and political patronage:
https://www.mnchamber.com/staff/doug-loon
As an actual practicing capitalist, I do not need surprise gifts from the government like the Trump tax cuts that reduced the corporate rate from in the 30s (based on income) to 21%. I prefer to earn my money and not have it gifted to me by a grifter in the dining room at Mar A Lago who informed his guests:
“President Trump kicked off his holiday weekend at Mar-a-Lago Friday night at a dinner where he told friends, “You all just got a lot richer,”
The Minnesota Chamber of Commerce is all for socialistic tax cuts where companies are not asked to create jobs, invest in growth, take a risks, just “Look what lobbying can deliver for you”.
I’ll take Biden’s Recover Act, Jobs Plan and Families Plan where twice as much money as the tax cut is offered up to the private sector and we are told to compete for it: the best win, the lazy don’t.
To paraphrase the 1948 film “The Treasure of the Sierra Madre”:
Lobbyists? We don’t need no stinkin’ Lobbyists
Lazy? I know many small business owners who “competed ” but their paperwork got lost in the beaucratic black hole.
Mine did not because I stayed after it to make sure it got done.
Persistence is competitive skill.
This is just too funny. No one’s paperwork got “lost”… the program ran out of money. You miss out on your socialist rescue dollars and blame it on government bureaucrats rather than you own endorsed politicians who dialed back the funding out a sudden concern about debt and deficits. Whatever. Meanwhile… you understand that EVERYONE doesn’t “win” in competitive environments right? Some win some lose, you don’t get the money just for showing up right?
Ah yes, let’s trot out the supply-side, trickle-down boogie man again and again and again … maybe if we try yet another time it will actually work. Maybe. Possibly?
What is your suggestion?
Economics that actually work. Raising the corporate income tax rate.
Actually regulated capitalism, with strong socialist protections to prevent the systemically inherent tendencies for capitalistic economies to devolve into feudal ones.
As I said:
I’ll take Biden’s Recover Act, Jobs Plan and Families Plan where twice as much money as the tax cut is offered up to the private sector and we are told to compete for it: the best win, the lazy don’t.
Construction, manufacturing, technology, healthcare all produce good paying jobs that advance our common goals.
I really do not care if a 5 person investment banking firm brings home 50 million or 55 million next year…
Where are these skilled people going to come from? There are massive and competitive opportunities for people wanting to work, especially ones with a real skill set.
$20 an hour for labor in construction or manufacturing is easy to get these days. Plus benefits and usually OT. Most require only a HS education.
“Most require only a HS education.”
And relevant work experience. The solution is practical occupational training.
We have a well established Technical College system in Minnesota that is not funded as well as when they were established in the 1970s and 80s.
Biden’s 2 years post high school education program gets at the problem too.
One more example of something Mr. Loon wants and needs and would prefer not to pay for…
Frequently I wonder if repubs care about deficits as 3 repub presidents have overseen massive tax cuts going mainly to the wealthiest as everything crumbles, deficits skyrocket, poverty and wealth inequality skyrockets, while these same corps vastly underpay workers, while overpaying themselves.
Not sure which is worse…their hypocrisy or ignorance.
What a collection of nonsense.
“Experience shows”? No, it doesn’t. There is no basis whatsoever for that claim. The economy performs better under Democratic leadership and their higher taxes on corporations and the wealthy.
Why would taxing corporate profits hurt workers? It might hurt stockholders, but not workers. Letting corporations keep more of their profits isn’t benefitting workers.
I’m sure Mr. Loon will take advantage of this forum to defend and clarify his statements with a thoughtful response.
Or not…
How much better off would this country be without lobbyists? Their very existence defies all logic. Find any reference to the value of “free advice” and it always comes back to “being worth what you paid for it”.
No thanks, Mr. Loon…
Ha, whatever intern collated this boilerplate is far to busy running errands for the “big boss” to reply.
When the corporate tax rate was higher, and I’m talking about the 50’s through the 70’s, the tax code favored more investment in research and development. Since R & D is deductible, corporations invested more. As the corporate tax rate has been driven down, down, and down by lobbyists like Loon, R & D has fallen. Well, at least here in the US.’
In any case, Loon should favor higher corporate taxes and a more generous tax rate for families with incomes under $100K. You see, people don’t pay taxes; taxes reduce family income, reducing demand for products and services. Personal income taxes really get paid by corporations. Loon has got it backwards. Families under $100K spend nearly all of their income. Let them keep more of their income, and corporate sales will soar!
Mr. Loon does not want his corporate members to be the successful heros by innovating and gaining efficiency through investing in their companies.
He wants to be the hero by showing them that investing dollars into his lobbying has a better return than investing in their companies’ competitiveness.
Ask him if he wants better broadband access across the state? Better roads and bridges? Transportation to get workers living in the city to jobs to third and fourth ring suburbs like Shakopee? An affordable housing construction boom? A solution to skyrocketing employer healthcare costs?
He want all of those things. He just does not want to have his members have to pay for them. He is the premier lobbyist for corporate welfare.
True. Japan enjoyed its greatest period of growth and innovation during a period when the corporate income tax was so high that it wasn’t worth declaring a profit. Instead, these companies poured their money into R&D and into providing the wages and benefits that turned Japan into a middle-class nation.
“Small businesses with no employees have an average annual revenue of $46,978. The average small business owner makes $71,813 a year. 86.3% of small business owners make less than $100,000 a year in income.”
https://www.fundera.com/resources/small-business-revenue-statistics#:~:text=8%20Small%20Business%20Revenue%20Statistics,%24100%2C000%20a%20year%20in%20income.
Not exactly a fortune, especially given the risk.
What risk? Seems to me someone engaging in the pursuit of one of those book lernin’ college degrees you find so meaningless, taking on debt not dischargable through bankruptcy, is taking a far greater risk than one putting up capital to throw out a shingle, knowing full well that the worst they might expect is poor business credit for a few years, and the need to take a job for someone else should their business model fail. In many cases, they’re right back to failing again, under a new name, within months. Good grief, the deification of mediocre “businesspersons” never ends, does it.
Matt – have you ever owned a business?
Small business owners with no employees don’t pay separate business tax unless they incorporate, so that limits the tax increase to around 25% of small business LLCs. Most of the small businesses without employees making $80k or less are sole proprietors who just report their net income on their individual income taxes. We can talk about those LLCs if you want but then we also get to talk about all deductions they can claim that would bring those tax rates down quite a bit.
Suffice to say that a small business person working alone earning $80 a year won’t pay much more if anything more than anyone else making that same salary. Biden’s corporate tax rate is pretty well targeted at corporations making $400,000 or more.
I’ll say it again: The intellectual mediocrity of our business class is one of our biggest national liabilities. These examples of anti-tax dogma illustrate the facile nature of “chamber” thinking like few other activities.
Anyone who has been paying attention to these claims will have long since noted that tax increases in past decades have never caused the damage these guys always claim they will, nor do the tax cuts they constantly demand deliver the magic prosperity they predict. Trump’s tax didn’t just blow a hole in the economy and the federal budget… the effect of that tax cut and it’s duplicitous promises to do deliver prosperity… were as predictable as the sunrise. Then we had a pandemic and it was time to say: “Goodnight Gracie”.
I don’t know why these people seem to think that Somalia is the worlds ideal business environment but the small guvmint mentality has never really made sense. Perhaps it’s just delusional grandiosity? Maybe these business people imagine themselves rising like a phenix above the ashes of civilization like a character in an Ayn Rand book? Alas most of these guys would collapse in a few weeks were it not for the public infrastructure the rely on every day just for basic commerce.
Suffice to say that whenever someone condemns taxes without even thinking about what those taxes pay for or provide… you are likely looking a dunderhead pretending to be an business genius.
The thing that puzzles me is the fact that these various chambers of commerce have members upon whom they rely for funding and support. Are these dunderheads who speak for the chambers REALLY representative of the membership? When these chambers enlisted as warriors for the Republican Party decades ago did the take a vote of some kind on that? Are there NO liberals or even Democrats among their members? Is there no one in the membership capable of comprehending the role that public infrastructure provides in a capitalist economy? And aren’t these guys supposed to be non-partisan? Aren’t they supposed to represent the best interests of their members? Whatever… nothing to see here… move along.
The Targets, Home Depots, Deltas of the world expressed their solidarity and commitment to equality and voting rights in the past year. Their simultaneous memberships in various C of C units kind of complicates that and they are rightfully feeling the backlash and it certainly filters down (up?) to the lobbying charlatans like Doug Loon. And he and his are in a quandary trying to find a new way forward that sustains their gig through these conflicting times.
In the meantime, just fight tax cuts, always worked in the past.
Whoops, tax increases. Doug Loon never saw a tax cut he did not like.
Setting Mr. Loon and the Chamber nonsense aside for a moment, it’s important to understand the origin of this anti-tax dogma is traced back to the neoliberal fantasies that emerged from the Chicago School of economics. When that “model” displaced the Keynesian models in the 1980 and 90s it wasn’t just Republican ideologues who embraced the notion that all tax revenue is capital that is just removed from the economy. Economics professors were actually teaching this nonsense in the nations universities.
The idea that tax revenue simply removes capital from the economy rather than recirculates it or directs it towards services that the economy depends on was always frankly… stupid. If you look at whatever “studies” guys like Loon point to (if they bother to use references of any kind) those studies literally just add up the tax revenue and subtract it from the GDP or State GDP as if the money literally just disappears. To see what’s wrong with such analysis all you have to do is imagine that analysis before the interstate highway system was built… such an analysis would conclude the interstate highway system would damage the nations GDP by pulling all the tax revenue used to build it out of the economy. Of course the exact opposite is what happened.
The economic reality is that almost all tax revenue in liberal democracies goes back out into the general economy. Pretty much the only tax revenue that doesn’t go back out is foreign debt service, and THAT scenario only exists because we refused to raise taxes and borrowed to pay for so much.
Oddly enough the business community in this country as Mr. Loon represents it has adopted a reliance on free lunches while decrying all stuff we give away to anyone else. Obviously all the infrastructure and services business rely on from courts to airports, not to mention section 8 housing and food stamps, aren’t free. This ideology is simply incoherent which is why whenever these guys get hold of budgets they blow them up and trigger recessions. This is a really good example of ideology and short sighted greed blinding a group of people to their own best interests. Obviously state of the art or just more efficient transportation, energy, communication, and health care infrastructure would grow the GDP and dramatically increase the competitiveness of US businesses, yet the Chambers and others always appose such improvements based on facile cost analysis. Look at how ferociously they’ve been fighting electric cars for instance. Whatever.
Of course, I’m assuming the most generous interpretation regarding the motivations behind these incoherent economics… one could alternatively assume that mere obtuse mentalities don’t produce these toxic outcomes. One could consider the possibility that some of these actors among the business community are perfectly aware of inequities and damage they cause with this narrowly focused competition for limited resources… some of them are quite wealthy because of the current financial allocations after all. But then we end up back with the question I asked in a previous comment about the chambers. Why doesn’t the membership realize that the leadership is promoting policy and economics that work for a few rather than the majority?
Well stated. The tax increases are being targeted to long overdue infrastructure improvements (roads, airports, electric power grid, broadband internet) that would improve the productivity of all businesses. They would be hard pressed to find a better ROI for these taxes.
Yeah, I was amazed a few years ago when a couple articles by economics professors questioning their models started trickling out. These guys were like: “Well… maybe taxes and government spending can actually contribute to the GDP and general economy?” Well… duh. Ever heard of the GI bill, or the post war recovery, or the New Deal? Yeah, taxes are how liberal democracies invest in their own stability and infrastructure. In investment… no ROI.