It's The Tax Burden, You Hoser!

President Obama’s infamous line “you didn’t build that,” was recently echoed by the equally economically challenged Hillary Clinton when she noted, “Don’t let anybody tell you that, you know, it's corporations and businesses that create jobs.”  Their staff, having to manage the public outcry and snickering, got both of them to walk back the comments but, most likely, what they said originally is what they really believe.

I bring this up because this thinking has become the prevailing viewpoint in the U.S., certainly among the progressives and left-leaners.   I recently had a debate with an old friend who shares the values of Obama and Clinton.  She posted on a social site that we should all boycott Burger King for their unpatriotic reverse repatriation of their new company headquarters.  The move of the hamburger chain to Canada through acquiring a Canadian franchise stirred a lot of emotion among those who would prefer the corporation to stay put and put up with the highest corporate tax rate among industrialized nations. 

In all but a few publications, the storyline was that Burger King shouldn’t be allowed to do this.  But the main story shouldn’t have been about Burger King’s choice to relocate, it should have been a cautionary tale that other corporations are considering the same thing; taking jobs and tax revenue with them.  The U.S. is the only country that taxes corporations on their domestic and foreign profits and, with their take up to 40% (it takes earning $150,000 in profit to get there), it’s double the corporate tax rates of Canada.   The conclusion each of us should have made was whether or not our corporate tax code needs some restructuring.  By lowering rates and just taxing corporate profits based on what they earn in the U.S., a good part of the estimated $4 trillion sitting offshore may make its way into the U.S. economy.

My friend didn’t agree.  It’s her belief that corporations are made up of millionaire fat cats and not stockholders.  And certainly she didn’t believe corporations have accountants and tax specialists that can draw up handy spreadsheets showing how a company can retain more profit based on tax advantages elsewhere, thereby making the shareholders happy and keeping the corporate fat cats around a bit longer.

There was a simple question I asked of her:  If you were offered a job that paid 20% more and all other things were the same, would you consider it?  Of course she said yes, but didn’t want Burger King to have the same option she herself had.  She told me they owed their fair share to the government because they were the users of government services.  She noted BK’s trucks used the interstate highway system to deliver the buns, were all too happy to work with farmers who get public subsidies (not my idea), and who put their children in public schools.  I mentioned there were lots of people on the public dole who pay no taxes, so was she suggesting they should be paying a share of the tax burden – especially because they use the roads, use schools and walk around with Obama Phones?

The most disheartening aspect of this mini-debate and the misguided belief of many of our elected politicians is their lack of understanding of what and who came first.  Yes, through government appropriations, roads, schools and shrines to government largesse were built.  But the government didn’t build them, we did.  Tax dollars paid for all big projects that governments are so proud of.  But the first drawing on the drafting board couldn’t have been done without the first taxpayer.  This isn’t to say that collecting community funds to make the community better isn’t a good thing.  It’s about the ownership, or rather the lack of understanding of who the owners are.

The government didn’t create us; we created government.  Even a bit reluctantly if my take on the Federalist Papers are correct.  The prevailing belief that we are subjects of the government and need to sit down and shut up was the smoldering ember that created the war to rid the continent of the British Monarchy.  You would think the president, among others, would heed the advice of the Spanish philosopher George Santayana who wrote, “Those who cannot remember the past are condemned to repeat it.”