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A friend just sent me, for the second time, a video of Elizabeth Warren.
Listen to Elizabeth Warren talk about the problem of business owners using roads to bring their goods to us. Roads that the "rest of us paid for"....
She is picking on companies for using the roads that "the rest of us paid for." It's unadulterated soak the rich, lets pretend that we can make corporations pay taxes that they wont just pass on as costs to us.
Ok. Nice point.... But she misses the bigger point..... The factory owner isn't the only one who benefits from being able to ship his goods on the roads that the "they" paid for. The "they" benefit from having his goods available at a reasonable price, brought to them on the roads they paid for. So whenever she buys goods brought to her on the roads she and others paid for, protected by the police she and others pay for, she gets the benefits of the infrastructure she helped pay for.
Another fact of the matter that she conveniently misses is that factory owners pay road taxes, gas taxes, etc. When they pay the taxes that the government declares in order to get a vehicle registered, then that vehicle owner has as much right to use the roads as the "they" that Elizabeth refers to herself being a part of.
What happens when you buy goods that aren't protected by the police, fire, etc.? Then the seller has to provide their own security and their goods cost more, because they raise the cost of the goods, the seller just passes the cost along to the consumers purchasing the goods. So where does this happen? Look at the high price of illicit drugs. The prices are high because of high risk, and the sellers having to cover the cost of protecting themselves from other drug dealers, and from the police.
So if factory owners cant depend on decent roads, decent police protection, etc., what happens? Then the factory owner pays for their own private security. If the mails aren't reliable, then companies have to hire their own private delivery force to deliver their bills. And they pass the cost of that along to their customers. And this is exactly what happens in places like Bulgaria. The local utility company for heat and lights doesn't trust the national mail service to deliver their bills, or it is too expensive, so they have their own people who come around and put a thin strip of paper in everyone mailboxes that has a printout of what that person owes.
Except here in the U.S. The government has decided to make first class mail delivery a government monopoly. And they have decided to say that even if you buy a mailbox yourself, if you set that mailbox out for public mail delivery, then the postal service owns the exclusive right to place mail in your mailbox. Any other person putting stuff in your mailbox can be charged with the crime of mail tampering. (They don't have to prove that you actually removed someone elses mail and changed it, or read it, or manipulated it. Just messing with the mailbox is enough evidence for them to claim you messed with the mail in it....) So private businesses have no way to go around a costly or inefficient monopoly, and are forced to pay whatever jacked up price that the US Postal Service demands. When that price becomes too high, guess what businesses do? They pester you with demands to change your account to paperless and get all your statements online, so they can deliver your bill to you online, and save money from dealing with the Postal Service.
No fiscal conservative denies the need of common roads, postal services, or fire, or police, or teachers. The issue is whether the government is providing these services in as cost effective way as private enterprise. Generally time and again, we see where private companies manage to setup things like delivery at a reasonable price which is paid only by customers who actually use their service. And they do this while making a profit for their investors (like people with retirement funds who hope to make some extra money while loaning their retirement savings to someone else to build a business with.) Compare this to government run delivery services such as Amtrak and the Postal Service, which lose astounding amounts of money, which then gets subsidized by all of us, whether we use the service or not. What would Elizabeth Warren say about forcing "the rest of us" to pay for services that we don't need or use, just so she and her congress critter friends can enjoy excellent Amtrak service in the Washington D.C. area, without having to pay the true price for that service that the rest of us pay for!
You see, whether the factory has to pay its own delivery force, or it pays UPS, or it pays the national postal service, it doesn't matter. If it pays the published price, it has as much right to use that service as anyone else who paid to build the service. But in the end, the factory doesn't pay those payments. Their customers do. The only way the factor makes payments to pay those costs is if it sells things to customers that they need. And if the costs are not passed along, then the profits will be smaller, which means the smaller "they" who built that business (such entrepreneurs risking their own savings, pension funds investing their clients savings, or people buying shares on the stock market) will get less return on their investment.
Should you have to pay 20% extra for lightbulbs, just so GE can have extra money to pay to the government? Or should we cut in half the profit that GE makes so that we reduce the dividends they can pay to share holders, such as retired teachers and police officers whose retirement money is invested in GE? Should police officers, teachers, and your elderly parents, enjoy a lower rate of return and a lower income on their retirement savings?
Thats the difficult question you have to answer when you want to make the assertion that GE paid no taxes, and claim that they should pay more taxes. First off, every company pays tons of taxes in the form of:
- business permits (and all the "environmental impact reports" they might have to file to get those permits)
- employment/payroll taxes on all their employees
- sales taxes on items bought for the use of the business
- inventory taxes
- corporate minimum taxes
- excise taxes such as gas and alcohol taxes
And where do those moneys come from?
Those more taxes come out of the pockets of customers in increased prices, or out of the pockets of investors who get less return on investment. Companies have no other source of money to pay the costs of operation!
And in case you want to claim the profits only go to fat cat owners or executives, whoever they might be, here are a few facts: Generally those executives have a pay that is set by a board of directors. The board of directors decides what the services of that executive are worth to the company. A lot of time that pay is largely incentive based to get that executive to exercise leadership to get the people in the company to do the things that will grow and prosper the company. Those executives don't just reach their hand in the till. That's called embezzlement. And the money they are paid is most definitely taxed as personal income....
When the profits are paid to stock owners as dividends, it then gets taxed on the incomes of those stock owners.... If the money is used to buy another company, the cashed out owners of the old companies will likely pay taxes on the profit they made in selling the business.... So while the money remains in GE coffers, it might sit there tax free. But as soon as it is used in almost any conceivable way, it is being taxed.
Here is a more interesting question: Should we attack the company based in the US who builds products here, and demand they pay more taxes? Or should we look at the company who makes stuff elsewhere, and siphons profit offshore to go to the other places where the goods are made? In the early days of this nation, our government was paid for through levies on imports, which are taxes on goods from elsewhere that raise the price of those goods. That forces the foreign companies to pay a portion of the cost of our infrastructure, and it raises the prices of those items to the point where differentials like our cost of labor aren't so great that local businesses cant compete with the foreign product.
Unfortunately, those increased import taxes raise the price of goods, meaning our citizens end up paying more for the same items. Do those higher prices benefit the manufacturers of the items? No, the higher prices are absorbed in the import duties consumed by government. Can consumers buy as many of those goods? no, because if their income is constant, they cant afford as much of a higher priced item than they can afford of a lower priced item.
So we arrive at the same conclusion. Taxing imports really just results in increased taxes to individuals.
Only individuals actually pay taxes. Companies only pay taxes with money that was collected from individuals.
So the real question is, why do we need such an expensive amount of government today, as compared with the amount of government and cost of government from 50 or 100 years ago?