Obama can't kick habit of government interventionism
President Obama evidently can’t look upon American commerce without finding cause to interfere with it or tax it, especially when entrepreneurs and capitalists successfully escape the federal government’s clutches. The president’s State of the Union Address last week perfectly exemplified his passion.
I thought the president gave a fine speech, delivered with all the gifts he commands, and eliciting the usual multiple standing ovations. But, as the saying goes, we should not judge a book by its cover.
Obama has clearly grasped the fact that his great legislative achievements, such as the stimulus package, the bailout of the automobile companies, financial regulation, and federal control of health care have not been as great popular successes as he hoped for, so he offers us what conservative commentator and columnist Charles Krauthammer has described as “tinkering at the edges.”
This brings me to his “tinkering” with manufacturing. Obama complained that American manufacturers have taken their business overseas and thereby provided jobs only to foreigners. But even though he admitted that the corporate tax rate of 35 percent is too high, his response was to blame capitalists rather than the government.
According to Obama, companies that transfer their operations outside our borders are not avoiding onerous tax burdens; rather, they are refusing to pay their “fair share” of tax money. Government, in other words, didn’t cause capital flight by its appetite for more and more revenue. No, it was, once again in his imagination, selfish corporations (I guess corporations really are people) who are disappointing the public’s presumed desire for federally funded programs of wealth redistribution.
Here are relevant excerpts from the president’s speech and my commentary:
“So we have a huge opportunity at this moment to bring manufacturing back. But we have to seize it. Tonight, my message to business leaders is simple: Ask yourselves what you can do to bring jobs back to your country, and your country will do everything we can to help you succeed.
“We should start with our tax code. Right now, companies get tax breaks for moving jobs and profits overseas. Meanwhile, companies that choose to stay in America get hit with one of the highest tax rates in the world. It makes no sense, and everyone knows it.”
Notice the double speak here. He’s asking business leaders to bring manufacturing jobs back to America while berating them for avoiding “one of the highest tax rates in the world.” One would think that the solution is to lower the tax rate. But by calling companies avoiding this burden, beneficiaries of “tax breaks for moving jobs and profits overseas,” it is clear that a lower tax rate is the last thing on Obama’s mind.
“So,” the president concludes, “let’s change it. First, if you’re a business that wants to outsource jobs, you shouldn’t get a tax deduction for doing it. That money should be used to cover moving expenses for companies like Master Lock that decide to bring jobs home.”
Obama spoke glowingly about a company that decided to tough it out in the high-tax American environment. He did not say how many jobs Master Lock shed in order to afford “one of the highest tax rates in the world.” Meanwhile, he called doing business overseas a “tax deduction.” That strains the meaning of the term beyond recognition. Wouldn’t it be simpler to lower taxes rather than to offer a “good” tax deduction for “moving expenses” (whatever they are) back to America?
The President went on. “Second, no American company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas.
“From now on, every multinational company should have to pay a basic minimum tax. And every penny should go towards lowering taxes for companies that choose to stay here and hire here in America.”
The president is proposing a tax outside American jurisdiction, one that tells business leaders that, no matter where you go, we will find you and tax you. And giving preference to companies that “choose to stay here” does nothing to simplify the tax code, which gives the lie to Obama’s specious call elsewhere in the speech for reforming it.
“So my message,” it is plain, is this: Play ball and we’ll give you favored treatment. Refuse to cooperate and we will make life difficult, if not miserable, for you. Is this the sort of “change” that Obama has been hoping for?
ABOUT THE WRITER
Richard Reeb taught political science, philosophy and journalism at Barstow College from 1970 to 2003. He is the author of “ Taking Journalism Seriously: ‘Objectivity’ as a Partisan Cause” (University Press of America, 1999). He can be contacted at rhreeb@verizon.net.
