Neither is he a typical Republican who will sell out American workers to the multinationals and let them maximize profits by manufacturing in destitute countries with rock-bottom wage rates and no regulation at all. He’s looking to provide an environment that is fair to American workers, fair to American corporations, and responsible on safety and the environment. It’s not Republican or Democrat. It’s America First.
Trump has said repeatedly what I’ve been saying for decades: If you don’t have borders, you don’t have a country. That also applies to sovereignty over the legislative process. If an unelected, international regulatory board is making your laws, instead of your own, elected representatives, you don’t have a country, either.
Trump promised he would pull out of TPP on “Day One,”10 And he did. The Monday following his inauguration, he wrote an executive order withdrawing the United States from the deal.11 He also placed a hiring freeze on some federal workers and defunded international groups that perform abortions.12
That promise was crucial and Trump came through with flying colors, unlike the RINOs in Congress who stabbed us in the back repeatedly over the past four years. Trump had to follow through on trade and immigration or we elected him for nothing. I said, “Don’t expect to get one hundred percent of what he promised; expect to get fifty percent, or at least more than we’ve been getting.” This and withdrawal from or renegotiation of NAFTA were the people’s “red lines.” On January 23, we won half that battle.
TAXATION AND REGULATION WITH SELLOUT REPRESENTATION
Just like the rigged trade deals, Washington and corporate America have completely rigged our tax code. The United States has the third-highest statutory tax rate in the world at 38.92 percent. Only the United Arab Emirates and Puerto Rico are higher. But the corporations don’t pay that rate. They pay an “effective tax rate” of about 23 percent.13 A lot of the disparity comes from legitimate business expense deductions. But not all of it.
Here is the kicker. Even though the statutory U.S. corporate tax rates are about ten percentage points higher than the average rates for the other thirty-three developed countries in the Organisation for Economic Co-operation and Development (OECD), U.S. effective corporate tax rates are about the same as the average among those countries. That means the U.S. corporations are finding a way to reduce their headline tax rate far more than the rest of the developed world.
Does that mean U.S. companies have much higher business expenses? To some degree, yes. A lot of those welfare utopias in Europe have much freer markets in terms of regulation.14 They have higher taxes, when you include value-added taxes (VAT) and personal income taxes combined, and they pay out more generous welfare benefits, but they have less regulation in many areas. Europe is moving away from socialism in this regard. Regulations have a cost and U.S. companies must absorb those costs just to do business.
But higher regulatory costs aren’t the whole story. The other component in that huge disparity is loopholes. The U.S. tax code is riddled with loopholes to allow special interests to avoid or lower taxes under very specific circumstances. What you must understand about this system is it’s very anticompetitive.
Corporations don’t pay huge sums to lobbyists to help even the playing field for them and all their competitors. They pay lobbyists to get them an advantage over their competitors. This is why the tax code is more than seventy thousand pages long.15 It’s rigged.
Let me give you the reductio ad absurdum example to make my point. Suppose I taxed every company at 100 percent of gross revenues, except one. For that one business, taxes were 15 percent. Obviously, that one business with the 15 percent tax rate would be the only one that could stay open. It would have a pure monopoly on all business, a 100 percent market share.
Well, our tax code operates on the same principle, albeit to a less absurd extreme. We start out at a ridiculously high tax rate that no business could pay and remain competitive. Then the corporations that can afford it send an army of lobbyists to Washington to carve out exceptions for themselves. We call those exceptions “loopholes,” because they are a way to wiggle out of the taxes the law says the corporation owes. While they’re at it, each firm lobbies for loopholes that give it a leg up on its competitors.
Are you starting to see how the game works? First, only corporations that can afford lobbyists are even in the game. That gives the biggest and most-connected companies an immediate advantage over their smaller competitors. But let me let you in on a secret. The big multinationals’ most dangerous competition isn’t their peers or even their smaller competitors. It’s the business that doesn’t exist yet.
The Larry Ellisons and Tim Cooks of the world wanted a free market when they were on the outside, trying to break into the business world with new ideas. But now that they’re on top, they seem to want to rig the game against their younger counterparts wherever they can.
The tech giants came into the business world in the 1980s and 1990s and disrupted everything. They put old, established companies out of business, but they created millions of new jobs that never existed before. And the economy grew, just as it did when the automobile industry put all the blacksmiths out of business.
What new businesses ready to do the same thing are out there now, unable to create new, higher-paying jobs, partially because of our rigged tax code? We don’t know. We won’t know until we get rid of this corrupt system and let new businesses compete on an even playing field.
The regulatory structure is basically a mirror image of the tax code in this respect. Liberals are always pushing for more regulation on businesses, while at the same time complaining there is too much consolidation, making the giant corporations even bigger. They don’t understand that the first problem causes the second.
Just like high taxes they can’t afford to lobby their way around, many new businesses can’t afford the cost of compliance with our gargantuan regulatory state. An Exxon or an Apple has the economies of scale to hire a floor full of lawyers; but the Steve Jobs or Jeff Bezos of tomorrow does not.
That’s why established corporations always end up supporting new regulations in the end. They may complain when they’re first proposed, but that’s just maneuvering for position on their part. In the end, they know they’ll help write the regulations, which they’ll lace with all kinds of favors for themselves. And the costlier compliance becomes, the more protected they are from new or smaller competitors.
This is what Bernie Sanders’ misguided supporters don’t understand. More regulation protects big business and the 1 percent. Cutting regulation allows the little guys they care about to compete.
Don’t misunderstand me. Like Trump, I don’t think corporations are evil in and of themselves. I’m not a 1930s street corner communist like Bernie. It’s the game that’s rigged. Just as Trump tried to tell the other Marxist Hillary Clinton during one of the debates: businessmen play by the rules Washington makes. They have a responsibility to their shareholders to maximize profits within those rules. And faced with a 38 percent tax rate and a Federal Register full of regulations with more pages than even the tax code, this is the only way to survive.
This all starts with the liberals, for whom no tax is too high and no amount of regulation too burdensome. Liberals say they want high taxes to help the poor and heavy regulation to protect workers and the environment. But what they really want is to attack free enterprise and private property everywhere they can. Taxes and regulation are weapons in their Marxist arsenal.
Don’t forget that liberals once had personal income taxes as high as 91 percent16 and industry was once even more regulated than it is now. They created the environment that corrupted the business world. It’s just got to the point where big corporations don’t really have any other choice than to play the rigged game by its corrupt rules.
All you’ll hear from the liberals about Donald Trump’s tax plan17 is that it benefits the rich. But what it actually does is rip out the rigging I’ve just described. First, it
lowers the headline rate to 15 percent, which is even lower than America’s competitors. But just as important, it eliminates a huge portion of the seventy thousand pages of loopholes written into the tax code for special interests. Taking away favors for big business makes the system more capitalist, not less. It allows small businesses to compete on a more even playing field.
That’s why you can expect stiff resistance from many Republicans on it, too. They’ll be all for lowering the headline tax rate to 15 percent, but they’ll want their friends in big business to keep all their special favors. Every loophole in those seventy thousand pages of tax code was put there by a lobbyist who bought off a congressman, a lot of them Republicans. They’re not going to give them up without a fight.
The rigged tax code is just another form of slime in the swamp and Republicans will call Trump a closet liberal for wanting to drain that particular slime out of it. Remember when Trump called out hedge fund managers on their own little loophole?18 Suddenly they sounded like liberals, attacking Trump for not giving enough to charity. Some of them openly endorsed Hillary Clinton.19
What does Trump’s charitable donations have to do with hedge fund managers being allowed to pay the capital gains rate instead of the income tax rate the rest of them pay? Nothing. They just don’t want to give up their government favors. RINOs call Trump a “populist” and imply he’s liberal or even socialist for attacking this loophole, but that’s the opposite of the truth. Eliminating that loophole is making the system more capitalist, because it eliminates an artificial advantage the hedge fund managers have over other investment professionals.
I believe we need taxation, but it has to be realistic. The maximum federal tax, which should be a flat tax, in my opinion, should be 20 percent. Everybody should pay 20 percent of their income to the federal government, including those on government pensions and disability. Hedge fund managers and those receiving dividend income should also pay 20 percent. There isn’t anything substantively different about dividend income from wages or salaries. It’s just that the people who receive large dividend incomes have always had the connections to have their taxes lowered, while everyone else pays through the nose.
One tax we don’t need is the so-called death tax. Readers of my last two books may remember that Russia and China have no inheritance taxes. We’re told Russia is a dictatorship. We’re told China is a communist country. Well, neither the Russians nor the Chinese pay an inheritance tax. Meanwhile, here in criminal America, Comrade Barack Hussein raised the so-called death tax surreptitiously through Treasury Department regulations after Congress had lowered it during the George W. Bush years.20
It’s not surprising our communist former president sought to raise the inheritance tax. “Abolition of all rights of inheritance” is the third of Karl Marx’s Ten Planks of The Communist Manifesto.21 Allowing people to pass to their children the wealth they’ve accumulated from a lifetime of hard work helps build a thriving, wealthy, self-sufficient populace over time. There isn’t much opportunity for the envy-peddling socialists in an affluent, upwardly mobile society.
I want Donald Trump to eliminate the inheritance tax completely and I’ll tell you why. Let’s say you work all your life and build a family business. Or perhaps you have a family farm and you want to give it to your daughter. If your farm is appraised above a certain value, your daughter will be driven off her own farm because she’d have to pay the criminals in the government up to 40 percent of its value in order to keep the inheritance. She’d have to sell the farm to afford the farm, which is obviously self-defeating. I’m going to lobby very hard for elimination of this tax during the Trump administration.
EDDIE NEEDS A FAIR MINIMUM WAGE
While I support vastly reducing regulations in general, I am concerned about the new secretary of labor, fast-food CEO Andrew Puzder. He’s for abolishing all regulations, including the minimum wage. He believes getting rid of the minimum wages will create jobs.
I have a different opinion on this than he and many other conservatives. It’s easy to say, “I’m against a minimum wage” in principle, letting the market decide the price of labor. That’s easy to say when you’re a millionaire talk show host. But if you’re actually working for minimum wage, would you like to see it go down and argue that it’s free-market capitalism? Do academic concepts pay your light bill or put food on your table?
Anyone who takes a purely academic view on this should try working for minimum wage first and see if they still cling so hard to their dogmatic theories. I was poor when I was young and I worked several minimum-wage jobs. I certainly didn’t like the pay. I would have liked to have made what the owner made, which isn’t as much as most people think. Owners of the kinds of small businesses I worked for weren’t millionaires, either, whether it was a pharmacy or luncheonette or similar business.
I took the jobs because I was glad to get them and learned what one benefit of minimum wage is: to motivate you to want to make more money. You get to the point where you say to yourself, “I can’t stand this minimum-wage job,” and you struggle to get a job where you can earn more. In order to do that, you have to acquire more valuable skills, so employers can afford to pay you more money. It motivates you to want to pull yourself up from the bottom of the labor scale. It’s that simple.
So, the market works even with a minimum wage in place. If you’re going to be dogmatic about the market, where is the limit? Would you like to see child labor reintroduced? Shall we have children working in factories around the clock, working for a dollar an hour?
There has to be some bottom to the labor cost. We can’t just let it be driven into the ground. We can see what the thieves in Silicon Valley are doing, throwing American workers out of jobs to bring in people from India to work for less. Is that what you want going on across America?
We need to be very careful with academic theories. Conservatives can be just as detached from reality as liberals on a few of these points. Unless you’ve worked for minimum wage yourself, you don’t understand what I’m talking about. If you were born into a family that took care of you from birth until you graduated from graduate school or medical school or law school, you frankly don’t know what you’re talking about when discussing the minimum wage.
You need to have worked a minimum-wage job, to have ridden the bus in the slush to two jobs and then gone to school when you weren’t working to know what I’m talking about. You had to have tried to raise a family while working two jobs and sleeping five hours a night before you can make an informed decision on the minimum wage.
We already threw Eddie under the bus by being dogmatic about academic free-trade theories, without taking into account how these trade deals with destitute countries would affect him. Now Trump has to try to go back and renegotiate those trade deals to be more equitable to the people in this country. We certainly don’t want to throw away everything we gain on trade by allowing corporations to drive wages down to what they’re paying people in Malaysia.
INFRASTRUCTURE
We are going to see something in the Trump administration that many of you are going to gag on: a trillion dollars in infrastructure spending. Many will say “Oh, no! You can’t do that! It’s going to blow out the budget, expand the deficit, blah, blah, blah…”
I want to say, “Wait a minute. Slow down.” There are different types of government spending. Even many conservatives don’t understand that not all expenditures are equal. If you spend a trillion dollars on welfare, by and large it’s money lost. It’s true the money goes into the economy, to a certain extent, but it doesn’t create anything. A lot of it is sent overseas. It’s kind of a negative form of government spending.
Of all the money Obama ripped off to give his “investors,” meaning his crony capitalist supporters, has anyone seen a single road, a single bridge, or a single tunnel? No, because there virtually weren’t any built.
Franklin Delano Roosevelt, who was a socialist, no question about that, created the Works
Progress Administration (WPA) under his “New Deal.” It affected my family long before I was born. My father was poor. He was one of tens of millions of unemployed Americans and an immigrant. He got a government job under Roosevelt’s program. He was a chauffeur for a local assemblyman.
I don’t even know how he got the job and he’s been dead many years now, so I can’t ask him. He wasn’t a political guy. I do remember him telling me about driving an assemblyman around Saratoga Springs, New York. He was able to put food on the table because of it.
Today, I drive through tunnels here in San Francisco and see the amazing tile work. I see LaGuardia Airport in New York and the Ronald Reagan National Washington Airport in Washington, D.C. I see the Florida Keys Overseas Highway, the Bonneville Dam on the Columbia River, and the Upper Mississippi locks and dams. These were all built by the federal government. These are all part of the infrastructure that made America great.
Donald Trump is a builder and he’s promised to rebuild our infrastructure. We know our bridges and roads are a disaster and our airports worse than those in Third World countries. They’re not going to rebuild themselves.
The immediate, knee-jerk reaction from the knee-jerkers is going to be, “Oh! You can’t do this! It’s new debt! No deficit spending! Government can never, under any situation, do anything right!”
Let me tell you something. There are two types of spending. According to a study by Wilbur Ross,22 if you spend $1 trillion rebuilding infrastructure, you’ll add $2 trillion to the economy. In other words, the $1 trillion invested would generate an additional $1 trillion return on investment (ROI).
Obama never studied ROI in Marxism 101. He was too busy learning the wonderful benefits of marching and destroying.
Trump will be attacked from the right and the left on his infrastructure plan, but it’s going to create good-paying, productive jobs. I’m not talking about Walmart greeter jobs, where you can say hello to people coming to buy cheap garbage made by the people in China your former employer shipped your old job to. I’m talking about jobs making things like we used to in this country before the Republicrats sold us out.
Trump's War Page 3
