Fear, Uncertainty, and Doubt: Big Business's Tax Code Strategy

Today's New York Times article titled "Major Companies Push the Limits of a Tax Break" strikes me as a microcosm of the challenges with the federal tax code.

It also reveals something else. It's a marketing strategy called FUD - Fear, Uncertainty, and Doubt - and it's being used by the rich and powerful to protect tax codes which benefit them by making the rest of us afraid to support efforts to change or eliminate those tax loopholes.

The article describes a 90-year old tax code modification supposedly meant to be helpful to farmers and small businesses. When discussing tax codes as "helpful" it's important to always remember that that help comes with a price tag. That "help" means that the government isn't taxing a transaction. That, of course, means less tax revenues into the federal treasury and, like it or not, we will not see our federal debt lowered and our federal budget come closer to balance unless both sides of the ledger - expenses AND revenues - are tackled.

Don't get me wrong. I don't oppose every tax code meant to help businesses, especially small businesses. What I vehemently oppose is what seems to have happened here. It appears from this article that this incentive originally intended to benefit farmers and small businesses was eventually expanded and perverted into something that the likes of JPMorgan, Wells Fargo, and GE may have abused.

How does that happen and why aren't we capable of doing something about it?

Perhaps this is one possible answer.

Whenever the topic turns to the economy, business, and taxation, we seem to allow the rich and powerful to control the discussion and to set the framework for what to do next. We allow the to do this by employing a strategy those of us in the sales and marketing profession know as FUD - Fear, Uncertainty, and Doubt. Here's how it works.

We allow them to manipulate and control us by controlling the discussion mostly through fear and with heavy doses of uncertainty and doubt. Too many of us are easily (and to some degree, justifiably) frightened by the threat of the loss of the most basic thing needed to survive in a modern society; namely and for starters, a job which pays enough (but not always enough) just for food and shelter.

The things that used to signal the arrival into the middle class - higher education, vacations, and even a little free time to pursue interests outside of two or three part-time jobs - are now available and affordable to fewer and fewer people. All this at a time when taxes are at historic lows, regulation on businesses of all types has been progressively shredded over the last 30 years, the wealth gap is wider than it's been since the Gilded Age, and the federal debt keeps ballooning.


When it comes to taxes, the rich and powerful use FUD to make the same argument they always make: the beneficial tax treatment of these "...asset exchanges spur investment and help create jobs." They frame the discussion about raising taxes and doing away with loopholes by saying that if they are taken away there will be less investment and fewer jobs. My response to that argument is pretty consistently this: if that's true then why is unemployment still just under 8% and why isn't the economy growing faster? You rich and powerful people are getting what you want and it's still not enough?

This is overly simplistic, I know, but I still believe it's a valid stance to take in this argument. It's still a legitimate way to tear down and take back the framing they want to use when it comes to the tax code. If tax breaks like this are so great, then why are we in the terrible state we're in and why aren't the rich and powerful investing more into a recovery?

And when it comes to changing the tax code as a means for helping to reverse the federal government's mounting debt, the discussion must be first and foremost about the sort of code changes like this one that benefit GE and Wells Fargo long before even thinking about code changes such as eliminating mortgage interest deductions.

It's far past the time to end the corporate welfare system. That must begin with changes to the corporate tax codes. They must pay more, not less. Corporations have already proven they'll adapt and, besides, how much more is left for them to outsource overseas? They've refused to do anything except hold us all hostage through fear of job loss while they sit atop record-setting profits.

It's time to call their bluff.

One of the greatest challenges we face for reversing tax codes that benefit only the strong, the wealthy, and the powerful is our ability and willingness to call them out on their FUD strategy and to tell them that, "We're mad as hell and..."Well, you know the rest.

More than that, our elected officials need to know they can't use FUD on us either. If they have the courage to stand up to big money and the power elite, then they need to know that we will stand with them. We need more people like Bernie Sanders and Elizabeth Warren who seem to actually care about the middle class enough to stand up to Wall Street, big corporations, and the infinitesimally small number of wealthy people in America who already have rigged the system far too long and far too much to their advantage.

The wealthy aren't doing anything much to help the rest of us, so why should we keep kowtowing to them and their interests? Let's close tax loopholes that benefit large and wealthy corporations. It's a better place to start than with my home mortgage interest deduction.

Click here to find your Congressional Representative and tell him/her what you think. It's the only way they'll know.

Click here to learn more about and to get involved with Coffee Party USA and the work they're doing to restore our democracy.

Right-to-Work and The New Gilded Age

(Credit: AP Photo/Dave Kolpack)

Here's a byproduct of the so called Right-To-Work laws I never knew: besides being a masterful bit of marketing in terms of its labeling, these laws have helped to move jobs from Northern states to Southern states and eventually to cheaper overseas markets.

In fact, the more I learn about them, the more I come to understand that they are anything but a vehicle to ensure anyone's "rights" or that there's work created by them for anyone. At least not work normally associated with what we fancifully recall as a middle class lifestyle.

As the New York Times op-ed piece entitled, "Workers' Paradise Lost" points out, union and non-union workers both benefit when unions are more powerful and influential. Corporations once literally had to compete for labor by offering good wages and benefits.

Anyone happen to notice, recall, or learn in their rapidly-disappearing civics classes about the wealth and prosperity the middle class in America enjoyed after World War II and up to about the late 70s and early 80s? (Bonus points will be awarded for naming the B-movie-actor-turned-president who launched the decline in earnest back then by firing federal union workers and being the willing mouthpiece and marionette at the end of Alan Greenspan's fingertips.)

Here's another new fact I learned from the Times op-ed.

The Taft-Hartley Act was pushed through in 1947 by "pro-business Republicans and Southern Democrats" in the immediate wake of the UAW's rise to prominence. This Act was how states in the South and out West were able to pass right-to-work laws and attract businesses away from their neighbors in northern markets with cheaper labor. I didn't know how it had gotten started and that it went back that far.

And what happened next and when corporations felt that the labor wasn't cheap enough in the South and West? What has been happening since the early 80s and as unions have continued to lose their influence over elected officials, corporations, and thanks to years of vilifying by corporations and the GOP, even the influence unions and their members had with their neighbors? Where did business look for even cheaper labor? It wasn't on these shores. Labor is and was increasingly powerless to fight the flight of manufacturing overseas. It's sad when you consider that they couldn't even get their neighbors to stand with them to defend those jobs, and that those neighbors all too often are still jealous of what they perceive to be the largess of being a union worker.

(To be sure, we as consumers also have ourselves to blame, too, for demanding the Walmartification of America with cheaper and cheaper goods, but that's fodder for its own post.)

All of us owe a debt of gratitude to organized labor for basically forcing corporations to share the wealth. That's not a dirty or even Socialist expression. Labor is what brings into being and delivers to market the creativity and genius of the entrepreneur. One cannot exist without the other. It must be understood, however, that only one side has the "accounts receivables" and, hence, control over how revenues are distributed. CEOs didn't always make hundreds and even thousands of times what they pay their workers, and corporate profits overall in America are at historic highs.

We also owe a debt to unions for things we take for granted today. Things like child labor laws, workplace safety, the 8-hour workday, the 5-day week, and so much more. When examined purely from the economic and business perspective, these changes would probably never have come into being without workers literally dying as part of the labor movement to win them.

These are all things worth thinking about the next time we're tempted to side with trickle down theorists and defenders of capital - as if they needed us to stick up for them.

Actually and come to think of it, maybe they do.

So long as they - and let's be candid, "they" are big money, corporations, and most assuredly the Republican party - are successful at duping so many of the middle class into believing the "us versus them" of non-union versus union, we're likely to see the scales continue to tip away from the middle class and even more toward the wealthy. It's like something I saw recently on Facebook that said (and I'm paraphrasing), "Don't be jealous of my union benefits. Demand your own." I agree with that sentiment.

The scales of labor-management are out of balance. I think it's important to understand whose thumbs are on it and how the scales continue to tip toward the 1-percenters and big business. If we don't bring the scales back to the middle then my advice is that we might want to start thinking up names for this new Gilded Age.

While it does sometimes seem like things never change, I still hope for something different in my lifetime.

During my daily commute I've been listening to the book "Don't Know Much About History: Everything You Need to Know About American History but Never Learned" (http://amzn.to/nGQl0J).

It's amazing how similar the times we live in now resemble the Gilded Age's concentrated corporate wealth dictating to government the policies and laws that only increased the imbalance and led to economic collapse.

My kids understand the the lunacy of our generation better than we do. They know how badly some of us have gone astray and screwed things up. I'm encouraged by their morals, ethics, and sense of right and wrong.

What's happening on Wall Street now and in places elsewhere in the country is another positive sign. Here's Lee Camp's take on it: http://youtu.be/E9BKKr_CAAI

The invitation is still open if anyone wants to meet up in DC on Oct 29. http://www.coffeepartyusa.com/