To The Daily Sun,
Tax inversions. Have you ever heard of them? You should have heard about them from your political leadership because their impact on tax revenues is important to you. Tax inversions illustrate a large structural problem within America's corporate tax system. A tax inversion is a strategic maneuver an increasing number of companies are choosing to undertake in response to a competitive disadvantage. The way it works is that, most often, an American company first buys or sometimes merges with a foreign rival. Then the new corporate entity shifts its domicile abroad in order to reap tax benefits. The new company is based outside the United States.
Don't get mad at the companies. They are making a sound rational financial decision based on the situation forced on them by the American government. Here's why it makes financial sense for these companies to leave America. America has a combined federal and state tax rate on corporations of about 40 percent. (In New Hampshire it is higher than that because the New Hampshire corporate taxes are higher than the national average.) In the rest of the developed world (OEDC) the corporate tax rate is an average of about 25 percent. Making matters worse, America taxes the income made by American companies whether the money is made in the U.S. or whether it is made abroad, should the money flow back to the U.S. ever. The companies can increase their bottom line by up to 60 percent by changing their home country.
This puts a lot of dollars at risk for companies. It keeps capital made by American companies off shore, which means it will not be reinvested in America, lowering future domestic growth which costs jobs and reduces opportunity. Taxes are not the only factor in play in these deals but it is a large motivator. The higher the percentage of earnings that come from off-shore the higher the probability the company will leave. This is what happens when lawyers try to do social engineering without a grasp of economics. It is called the "Hassan approach" to economic development. If you do not believe in America and prefer to be citizen of the world perhaps this makes sense to you. If however you live here it and have to deal with the consequences your enthusiasm might be ... dampened.
Politically this is a tough nut because a politician intent on solving the problem of companies leaving America has to explain why we have been using the tax code to shift jobs off shore, an unpopular topic. Then they are going to have to explain why not taxing the income of U.S. companies earned in other countries is a bad idea, another an unpopular topic. Then they are going to have to explain why we can no longer support the level of spending to which we have become accustomed yet another very unpopular topic. Finally, they will have to tell the voters that their personal tax rates are going up and benefits are going down because corporate tax dollars are declining ... if they are honest.
This is a self-inflicted wound. It is serious and it is growing. It could not come at a worse time. The answer put forward by the administration so far ... is to vilify the companies which is patently unfair. Neither political party is eager to tackle the issue because they will have to admit complicity in its establishment. The time has come for serious consideration of the fiscal and monetary position of the nation and this is but one of the issues.
Last Updated on Thursday, 03 September 2015 06:59
To The Daily Sun,
I vote Democratic. I am a social liberal and fiscal conservative who is sick of the Washington gridlock. In a conversation with my good conservative friend I found that we are in agreement on the need for action on our national budget.
We agree that the excesses in social and operational spending must be drastically curtailed. Social Security, Pentagon, Medicare, agribusiness (sugar, cotton), Medicaid, NASA, and on and on must be reduced for us to have a country that can afford to operate into the future. The tax structure must be completely changed to eliminate the benefits to special interest groups.
I think that there is starting to be a centerist group of congressmen from both parties who see that the current stalemate in both houses can be broken by those, like my friend and me, who see the need to make substantial changes in budget items close to their hearts. The first substantial sign of this is the cooperation by the Koch brothers and the liberal members of state and national political bodies on drastically changing the penal system.
One very important change that is needed to expedite the above is the elimination of gerrymandering of voting districts in the states. California has done this. Other states need to follow. As long as liberals and conservatives run from safe districts the far fringes in both parties are the ones who end up in the House in Washington. They have no incentive to vote other than as their districts want them to.
Last Updated on Thursday, 03 September 2015 06:50
To The Daily Sun,
Bob Meade was blowing smoke when he recently used his column to take aim, again, at Obamacare (Affordable Care Act or ACA). He lamented that our economy doesn't have enough jobs and indicated that the number of words in the Obamacare statute is partially to blame. He says all those words have burdened employers and created an atmosphere of uncertainty. (I'm somewhat amazed that he's able to upload his columns at all: given the paralysis and uncertainty he must be feeling from the wordy software license agreements on his computer.)
So, this time it's the number of words that is the job killer: not the mandate that citizens have to have insurance or the expansion of Medicaid or the loss of inadequate insurance policies that he's yammered on about in the past. There's a good reason for that. Obamacare is not a job killer, according to Forbes magazine (yes, that Forbes, the business magazine that proudly proclaims itself to be "The Capitalist Tool") which said that since the provisions of the ACA have gone into affect, more than 11 million jobs have been created, and the unemployment rate has been cut nearly in half.
History doesn't matter for Bob and his fellow fundamentalist free marketeers, just ideology. Bob is an evangelist for unrestrained capitalism. And, he is correct that it is a terrific engine of innovation and creation. However, left to its own devices, it will consume itself and most of us along with it. That's why we needed child labor, minimum wage, and anti-trust laws and the eight-hour workday standard among many other wordy regulations. It's also why we needed word-filled rules to stop industry from polluting our rivers so badly they've caught on fire and from making our air unbreathable. Government regulation is there to balance the inevitable negative effects of unrestrained capitalism. In the absence of adequate regulation, industrial waste has poisoned the air in Beijing and made the water in Rio de Janeiro undrinkable as they let business run rampant over the environment.
These fundamentalists have been consistently wrong about so much in the economy. Facts don't matter to them. Not only have the stimulus, the ending of the Bush tax cuts, and the Obamacare taxes on the rich not killed jobs, the predicted higher interest rates and inflation haven't occurred, either, and both the deficit and the rate of medical inflation have declined under Obama's policies. In fact, with President Obama in charge, the U.S. leads the world in economic growth.
The reason that Obamacare is not a job killer is the same reason that the clean air and clean water acts didn't kill our economy as the naysayers predicted. If the rules are applied fairly (the level playing field), competition develops in these new markets — antipollution devices, for example. Capitalists rejoice as these new opportunities are created.
Capitalism is a big part of the reason we have such a wealthy society. Regulation is how we keep things fair and maintain a livable environment. There's a balance there. We need both.
Last Updated on Thursday, 03 September 2015 06:40
To The Daily Sun,
On behalf of Altrusa International of Meredith, we would like to thank John Moulton and the staff of Moulton Farm for their support of Altrusa's Farm to Table program. Throughout the growing season, Moulton Farm has donated farm fresh vegetables to Altrusa to feed the hungry in the Meredith, Center Harbor, Moultonborough and Laconia area.
Every week, Altrusa members have delivered nutritious vegetables to food pantries, soup kitchens, and shelters throughout the region. The generosity of Moulton Farm has assured that those whose budgets don't generally provide fresh produce could enjoy the delicious freshness and nutrition of fresh corn, tomatoes, squash and other joys of the season.
This is the eighth year that John Moulton has helped Altrusa to serve hundreds of others through this program. We extend our heartfelt thanks to him and his staff.
Chairs of Altrusa International of Meredith's Farm to Table Program
Last Updated on Wednesday, 02 September 2015 10:49
To The Daily Sun,
After reading a Letter to the Editor by Michael J. Brady of Pelham (headlined) "I have reached my limit
on Clinton's e-mail controversy," I have to admit the Republicans are trying to find the extent of all those e-mails. And for good reason.
This last Monday (Aug. 31) night, 7,000 more e-mails were released. The State Department says roughly 150 contained classified material, whether it was classified at the time of Clinton's correspondence matters little because she knew the routine.
To even compare this to Colin Powell or Condoleezza Rice is a joke.
I think the Democrats think the people should overlook all the various problems she has gotten herself in, and make her the perfect candidate.
I think the Republicans have a good reason to have reached their limit and have her indicted if it can be shown she broke the law. Of course, it won't matter as the president will pardon her anyway.
The one thing is a fact and that is many of her fellow Democrats have lost faith in her. She has dropped in the polls, 45 percent in Iowa since May. Run, Joe, run.
L. Michael Hatch
Last Updated on Wednesday, 02 September 2015 10:45