Dave Johnson Archive

Republicans are proposing a huge, huge cut in corporate tax rates. They are also proposing to let giant, multinational corporations keep much of the money they already owe on profits they have stashed in “offshore” tax havens.

Lower tax rates mean higher after-tax profits, which increases the value of stock holdings.

Who owns corporate stock, and therefore will receive the benefits of these tax cuts?

Do We All Benefit From Corporate Stock?

Lets look at just who owns corporate stock.

Republicans like to pretend that we are all invested in the stock market, if not by directly owning stocks, then through “our” retirement plans. This is usually repeated and believed by comfortable people who actually do have 401k or other individual retirement accounts (IRAs) through their workplace.

But 45 percent of Americans have no money for retirement at all. Only 44 percent of Americans put anything into a 401k, even if their company offers one — and this number includes workers with only $100 in the plan.

After eight years of complaining about “Obama deficits,” Republicans are proposing huge, dramatic, unprecedented tax cuts, especially for corporations.

President Trump wants the corporate tax rate cut from 35 percent down to 15, denying the government $2 trillion of revenue over the next decade. He is also proposing dramatic cuts to personal income tax cuts that will especially benefit billionaires like him.

Republicans call corporate tax cuts “pro-growth,” saying they will give the economy a boost. Trump’s Treasury Secretary says the plan will “pay for itself with economic growth.”

So now they’re for “stimulus”?

But here’s the real question: do tax cuts actually boost economic growth?

What Tax Cuts Actually Do

In 2012, the Congressional Research Service looked at data from past tax cuts and the effect they had on the economy, and issued a report titled Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945.  What did the study find?

There is not conclusive evidence, however, to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth. Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth. However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.

Polls show that the public likes President Trump’s plan to spend $1 trillion on infrastructure. That’s because they think he actually plans to spend $1 trillion on infrastructure. He doesn’t. Not hardly. Not by a long shot. In fact…

Infrastructure Spending Is Popular

Polls show the public really likes it when Trump says he plans to spend $1 trillion on infrastructure.

Gallup: Trump Family Leave, Infrastructure Proposals Widely Popular,

Americans are far more likely to agree than disagree with President Donald Trump’s proposals to require companies to provide family leave for parents of a newborn and to spend $1 trillion on infrastructure.

CNN: CNN/ORC poll: Most back boost in infrastructure spending, oppose growing military budget,

Trump’s most popular budget proposals include reducing taxes for middle-class Americans (84% approve) and increasing spending on infrastructure (79% approve).

While we’re talking about taxes…

The Zero Hour with RJ Eskow recently spoke with economist Dean Baker, co-director of the Center for Economic and Policy Research, about “A New Way to Make Corporations Pay Their Fair Share. ”

The idea is, as Baker explains further in the LA Times, to make corporations give the government stock instead of taxes:

If the tax reformers are serious, and I hope they are, here’s one simple way to largely eliminate the gaming opportunities that have made these people rich.

Instead of traditional taxes, the government could require corporations to turn over a portion of their stock, say 25%, in the form of non-voting shares. The government would benefit from any dividends or share buybacks but would have no voice in running the company.

This system would eliminate almost all opportunities for gaming since a company would not be able to deny the government its share of profits unless it also withheld profits from its other shareholders. And we would not call that “tax avoidance” but outright theft – the sort of thing that gets people sent to jail.

In a democracy, We the People are in charge. We are the boss of the corporations. At least that’s how it’s supposed to work.

Apparently, that isn’t so much the way it is anymore. The United States used to regulate corporations to protect people from concentrated power. Now concentrated power has taken over our government, which fights the people for the benefit of corporate profits.

Or, to paraphrase John Kenneth Galbraith: In democracy, We the People regulate corporations. In deregulated America it’s the other way around.

The Face Of Deregulation

This is what can happen to you now in the United States if you get in the way of something a corporation wants:

As a presidential candidate, Donald Trump promised to spend $1 trillion to modernize America’s infrastructure. There were no specifics. As economist Brad DeLong put it, Trump only offered “plans to have plans.”

Now Trump has released a budget outline, and the plans to have plans turned out to be a plan to have no plan at all. Trump’s “America First” budget delivers the opposite of his campaign promises, and it should come as no surprise that when it comes to infrastructure, the rubber doesn’t meet the road.

Transportation Funding Gutted

Trump’s budget guts transportation infrastructure funding, eliminating funding for many popular programs like mass transit funding for cities, Amtrak long-distance trains, and rural air service. It forces privatization of the Air Traffic Control system. According to the Washington Post,

Despite Trump’s push for new spending on transportation and other infrastructure, his $16.2 billion proposed Transportation Department budget represents a 13 percent decline from current funding. A host of rural and urban communities nationwide would lose popular programs.

StreetsBlog explains that, “In keeping with the budget’s general hostility to cities, transit would be hit especially hard.”

Saying on the campaign trail that Wall Street banks and hedge funds are “getting away with murder,” President Trump promised voters he would “drain the swamp” and “reduce the corrupting influence of special interests on our politics.” He was playing on the public’s sentiment that Washington is a swamp of Wall Street and corporate interests, connected insiders who feed off of taxpayers.

Trump’s “closing argument” television ad explained exactly who his villains were. Showing clips of Wall Street, stock tickers, world leaders chumming with Hillary Clinton as well as Lloyd Blankfein, the Chairman and CEO of Goldman Sachs, and billionaire philanthropist George Soros, Trump says in voiceover:

It’s a global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations and political entities.

It’s starting to look like President Trump’s promised $1-trillion plan to rebuild the nation’s infrastructure will be as bad for us as his health care plan turned out to be.

Infrastructure Report Card

The American Society of Civil Engineers (ASCE) has issued their 2017 Infrastructure Report Card. We didn’t do so well. Our “grade” is a miserable D+. Why? Go outside and look around at our out-of-date and crumbling roads, bridges, dams, airports, water systems, and electrical grid.

President Obama was able to address a bit of the problem in the 2009 “stimulus.” This passed because Democrats had supermajority control of the Senate at the time. But then they lost enough seats that Republicans could block things, and block they did. Republicans filibustered everything after that.

Now, after blocking infrastructure projects for seven of the last eight years, Republicans are suddenly talking about how we need to fix our infrastructure. What does this mean?

Who could be against rules that try to protect workers from having their pay stolen, having their health and safety put at risk, and being subjected to civil rights and labor law violations? See if you can guess who.

Last August, President Obama implemented a ‘Fair Pay And Safe Workplaces’ executive order that aims to stop companies from getting federal contracts if they violate labor and civil rights laws, steal workers’ wages and risk their health and safety. Actually, it just says the government will take violations into consideration, and yes, he waited eight years to implement this.

So of course, Republicans being who they are, have now voted in the House and Senate to repeal this act, exposing workers once again to having their pay stolen, having their health and safety put at risk, and being subjected to civil rights and labor law violations.

Obama’s executive order also required companies bidding on federal contracts to disclose if they had been busted for violating federal and state labor laws. Government procurement officers would then try to work with these companies to come into compliance with the laws and could deny contracts if they refused to.

Now that Republicans are running Congress and the executive branch, they’re planning to “reform” (cut) corporate taxes (again). This time they using the subterfuge of “this will make companies more competitive.” What does that mean? Of course, under Republicans, it really means one and only one thing: cutting taxes on the rich — rich people.

The top corporate tax rate used to be 52 percent. Under President Ronald Reagan it was 46 percent. Then Congress “reformed” corporate taxes and dropped the rate to just 35 percent. (Except for giant, multinational corporations. They were handed a “deferral” break that cut their taxes to zero.)

Corporations used to shoulder 32 percent of the total tax burden. Now they shoulder only 10 percent of the burden — a drop of two-thirds. The difference has been made up from cuts to infrastructure, schools, health care, scientific research and all the things our government does to make our lives better — and to help our economy prosper over the long term.

That’s the trade-off when taxes are cut. It means our government has to cut the things it does to make all of our lives better.

The United States ran the most enormous, humongous trade deficit last year since 2012. The gap between our exports and imports widened by 0.4 percent to $502.3 billion in 2016, the Census Bureau reported today. The government also found that the trade deficit amounted to $44.3 billion in December, down $1.5 billion from a revised $45.7 billion in November.

The goods deficit with China alone hit $30.2 billion in December, up $1.8 billion from the previous month.

The shocking trade deficit our country ran last year includes the services surplus. What happens if we separate services from goods? Exports of services decreased $1.3 billion to $749.6 billion in 2016. Imports of services increased $13.1 billion to $501.8 billion in 2016. Services ran a surplus of $247.8 billion. Exports of goods decreased $50.5 billion to $1,459.8 billion in 2016. Imports of goods decreased $63.0 billion to $2,209.9 billion in 2016. The resulting goods trade deficit was $749.4 billion. This is an enormous, humongous number. (Reports of this number will vary, due to “seasonal adjustments” and rounding. It is reported here as $734.3 billion, still an enormous, humongous number.)

What this means is in 2016 we moved $749.4 billion (or $734.3B) worth of jobs making, mining and growing things out of the country. And that included a third-quarter surge in soybean exports.

As the CEO of the company that owns fast-food chains Carl’s Jr and Hardee’s, Andy Puzder has championed replacing human workers with robots and sexist advertising while racking up labor rights, health and safety violations.

He’s now on the brink of running a government department with a mission to “foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.”

Given his penchant for wage theft and his leadership of a company routinely charged with sexual harassment, this Trump nominee isn’t qualified for this job. The Labor Department is supposed to protect working people from those things and other abuses, not kill jobs, depress wages and ignore dangerous and hostile working conditions.

Wednesday, February 1 is a national call-in day to oppose Donald Trump’s nomination of Andy Puzder for Secretary of Labor.

Dial 1-844-612-6113 or click here to make the call to express your concerns.

Andy Puzder, CEO offast-food giant CKE Restaurants (Hardee’s and Carl’s Jr), is President Trump’s nominee to be Secretary of Labor. As one more Ayn Rand devotee nominated to Trump’s cabinet, his mission is clear: to spearhead Trump’s War on Workers.

December’s post, Trump Labor Secretary Nominee Sees People As Throw-Away Commodities, explains the many ways this is a dangerous, anti-worker nominee,

The mission of the Department is “To foster, promote, and develop the welfare of the wage earners, job seekers, and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.”

… Andy Puzder is against raising the minimum wage. He opposes the new overtime rule requiring companies to pay overtime to employees making less than $47,476 per year when they work more than 40 hours. Puzder even opposes meal and rest breaks for workers.

Donald Trump, in what’s been hyped as an “unprecedented” move, has instituted a freeze on the hiring of federal employees. Hyperbole aside (it’s hardly unprecedented, since Ronald Reagan did the same thing on his first day in office), one thing is already clear: this will hurt a lot of people.

Trump’s order exempts military personnel, along with any position that a department or agency head “deems necessary to meet national security or public safety responsibilities.” That offers a fair degree of latitude when it comes to filling positions in certain areas.

But Trump’s appointees aren’t likely to ask for “national security or public safety” exemptions for the many government jobs that help people in ways Republicans despise. So who stands to lose the most under this hiring freeze?

1. Social Security Recipients

Trump and his advisors seem to have had Social Security in mind when they included this language:

“This hiring freeze applies to all executive departments and agencies regardless of the sources of their operational and programmatic funding …” (Emphasis mine.)

While there may be other reasons for this verbiage, it effectively targets Social Security, which is entirely self-funded through the contributions of working Americans and their employers.

Social Security is forbidden by law from contributing to the deficit. It has very low administrative overhead and is remarkably cost-efficient when compared to pension programs in the private sector.

The business-oriented media are loudly proclaiming that president-“elect” Donald Trump’s proposed tax cuts for the rich and corporations will “boost” the economy.

● WSJ: Trump’s Proposed Tax Cuts Could Boost U.S. and Global Growth, Says World Bank

● CNBC: Trump tax cuts could boost earnings by 20 percent next year: Yardeni

● Fortune: OECD Says Trump Tax and Spending Plans Will Boost Global Economy

● Fox Business Video: Why Trump’s tax cuts will boost the world economy

● Investors Business Daily: Here’s How Much Trump Tax Cuts Could Boost The Stock Market

The word filters down to the local media: (The exact word: “boost”…)

● Indianapolis Business Journal: Trump’s tax-cutting plan will boost economy

Really? Is THAT what happens when taxes are cut for the wealthy and their corporations?

Presidents Reagan and both Bushes cut taxes for the rich and their corporations, promising that the “benefits” would “trickle down’ to the rest of us. Kansas gave huge tax cuts to corporations and the wealthy to “boost” investment and jobs. For decades Puerto Rico offered tax breaks “attract businesses.” How’d that work out for them — and us?

Ninety-four percent of us pay into Social Security from every paycheck we receive. A few of us stop paying into Social Security in the first few working hours of the year.

The “Tax Freedom Day” Scam

Every year you hear a lot about Tax Freedom Day. This is the day the public supposedly has “earned enough money to pay its total tax bill for the year.”

According to the Tax Freedom Day website: “Americans will collectively spend more on taxes in 2016 than they will on food, clothing, and housing combined.”

The trick, of course, is the word “collectively.” As in “Bill Gates walks into a room full of homeless people. Collectively the room owns billions of dollars of wealth.” Non-billionaire Americans don’t pay nearly this much in taxes.

Tax Freedom Day is an anti-government propaganda gimmick where the billionaire class suggests that we stop “working for the government.” It’s a trick: most of us don’t pay that much in taxes and those who do are making so much money they hardly notice it.

Let’s see how this “Tax Freedom Day” formula can be applied to framing America’s retirement crisis.

President-“elect” Donald Trump today announced his nomination of Robert Lighthizer for the cabinet-level office of US Trade Representative (USTR). Lighthizer, who served as deputy USTR under President Ronald Reagan, is known for criticizing Republican “free trade” ideology. Before serving in the Reagan administration he was chief of staff for the Senate Finance Committee.

Lightizer’s nomination signals that Trump is likely to oppose the wide-open “free trade” ideology and policy that ruled the last several decades, enriching the Wall-Street “investor” class while wiping out US-based industries like textiles and electronics manufacturing, devastating entire regions and communities like the “Rust Belt” and Detroit, as well as much of the American middle class.

But Lightzinger and Trump’s public positions are at odds with most of Trump’s nominees to other positions, most Republicans in Congress and with the billionaires, “investors” and giant corporations that usually line up behind and fund the Republican party. How will Trump handle the expected opposition from these elements of the Republican coalition? If Trump would give a press conference perhaps we could know more.

Meanwhile, according to Fox News, Trump said,

“Ambassador Lighthizer is going to do an outstanding job representing the United States as we fight for good trade deals that put the American worker first,” Trump said Tuesday in a statement announcing his pick. “He has extensive experience striking agreements that protect some of the most important sectors of our economy, and has repeatedly fought in the private sector to prevent bad deals from hurting Americans. He will do an amazing job helping turn around the failed trade policies which have robbed so many Americans of prosperity.”

Coal miners, their communities and Faith groups are calling on President-presumed-Elect Donald Trump to honor his campaign promise to help coal workers. In an “Open Letter to President-Elect Donald Trump from coal miners,” hundreds of coal miners from Appalachia to Western coal lands asked for help for coal communities across the country.

They want Trump to take action to make sure coal CEOs and companies keep promises to restore the landscape and local environments by “reclaiming” the old mines, which would mean jobs in coal communities. They also asked Trump to protect the pension and health benefits they were promised. The companies and CEOs made millions from the mines and should not be allowed leave behind a devastated environment and ruined communities.

The letter was organized by Interfaith Worker Justice (IWJ), a network of Faith groups and worker centers working “to mobilize people of faith and work advocates in support of economic justice and worker rights at the local, state and national levels.” It asks Trump to stop coal CEOs and companies from abandoning their responsibility to clean up old mines.

In a democracy We the People pitch in and build public infrastructure that We the People all get to use equally.

So when people talk about our country’s infrastructure, they usually mean our public roads, bridges, mass transit, water and sewer systems. All of these are good for all of us and our economy. We share in the investment and we share in the return on that investment.

Likewise, when people think of infrastructure projects, they think of government projects hiring people, purchasing supplies and building or maintaining something. They think of lots of good, union jobs with good benefits and lots of good, local American construction companies and American suppliers getting contracts.

This is what Republicans have obstructed since they got enough votes in the senate to obstruct with. A few examples:

● 2011, Republicans filibuster Obama infrastructure bill
● 2013, Bipartisan Transportation and Housing Bill Filibustered
● 2015, $478B Infrastructure Bill Blocked by Senate GOP

On Friday the White House announced it was dropping its effort to pass the Trans-Pacific Partnership (TPP) in the “lame duck” session of Congress. It looks like TPP is really dead. Let this be a lesson to us.

TPP “Buried By A Wave of Antitrade Political Sentiment”

On Friday the White House announced it was dropping its effort to pass the Trans-Pacific Partnership in the lame duck session of Congress.

From the Wall Street Journal: “Obama Administration Gives Up on Pacific Trade Deal:”

The Obama administration on Friday gave up all hope of enacting its sweeping Pacific trade agreement, a pact designed to preserve U.S. economic influence in fast-growing Asia that was buried by a wave of antitrade political sentiment that culminated with Tuesday’s presidential election.

… Just over a year ago Republicans were willing to vote overwhelmingly in support of Mr. Obama’s trade policy. But as the political season approached and voters registered their concerns by supporting Mr. Trump, the GOP reacted coolly to the deal Mr. Obama’s team reached with Japan and 10 others countries just over a year ago in Atlanta.

(Note: the term “antitrade” in this WSJ report is a propaganda expression intended to drive support for policies that really have very little do do with trade and everything to do with corporate supremacy over government sovereignty. As if the United States is not already trading with TPP countries or will stop trading with them with TPP finally dead.)

It seems that lots of media/political/business people “on the coasts” don’t get how big a deal trade played in Tuesday’s election.

Sold On Free Trade

In the late 70s the country was told that “protectionism” is bad for the economy and was sold “free trade” as a way to bring prosperity and jobs. “Trade” in this usage meant one and only thing: close a factory here and lay off the workers. Open a factory “there” to make the same goods, bring those goods back here to sell in the same stores to the same customers. It’s called “trade” because now those goods cross a border. The “sell” was that all those laid-off workers would be “freed up” to get better jobs.

Well, they never got better jobs — those were also outsourced or privatized or relabeled as low-wage “contractors” with no protections or benefits. So instead they had their homes foreclosed, their local stores forced out of business and their downtowns boarded up. Local and state tax bases dwindled so schools became terrible, infrastructure crumbled, public services cut and cut and cut. Meanwhile the investor class that pushed this and executive class that managed it pocket the wages these regions used to generate for themselves. (They also got huge tax cuts.)

Given Donald Trump’s shady business practices I’d be afraid to do business with him, let alone let him run the country. – Kelly Conklin of Foley-Waite LLC

The Main Street Alliance, a national network of state-based small business coalitions, has released a political video warning small business owners that Trump’s economic policies show “a misunderstanding of what it takes to make our economy thrive.” The video was released through the Main Street Alliance’s Action Fund.

The video features Kelly Conklin, who owns Foley-Waite LLC, a woodworking company in Kenilworth, New Jersey. In the video Conklin says:

Donald Trump is a recession waiting to happen. And on November 8th you have a choice, whether we are going to go ahead on a steady course or whether we are going to plunge the country into one of its darkest eras ever. The master of disaster or a proven entity who can do the job.

There is a push underway for a huge corporate tax break from the next administration. Multinational corporations owe more than $720 billion in taxes on profits stashed in tax havens. They are proposing to bring those profits back if the government lets them pay only a fraction of what’s owed. This is being sold as a “tax bonanza” to pay for infrastructure. Actually it’s a “tax-break bonanza” for corporations. Don’t be bamboozled.

Bloomberg Politics has a story today, Clinton Readies Post-Election Push on Highways, Corporate Taxes:

Clinton says on her website that in her first 100 days as president she’ll seek approval of the “biggest investment in American infrastructure in decades,” creating tens of thousands of jobs. Gene Sperling, a Clinton economic adviser, said that a $275 billion infrastructure plan would be among her top three domestic priorities at a forum this month sponsored by the National Association for Business Economics.

This is absolutely the right thing to do and would get her Presidency off to a great start. We badly need to repair our aging infrastructure, because the economy could use it and because of all the jobs is create. Good for Clinton. (Of course, the need is much, much more than $275 billion. The American Society of Civil Engineers’ (ASCE) Infrastructure Report Card estimated in 2013 that we need to spend $3.6 trillion just to get things back in shape, never mind modernized.)

$275 billion is an excellent down-payment on the problem. Where does the $275 billion come from?

“The man of great wealth owes a peculiar obligation to the state because he derives special advantages from the mere existence of government.” – Teddy Roosevelt 1906

You and I pay income tax on our income. But what if you get a huge chunk of income by inheriting vast wealth? Think Paris Hilton, the Waltons, the Trumps and the Koch brothers, for example.

Our country was established by people escaping from places where a few people owned and controlled everything, and the rest of the people served their interests. We established a country where it is supposed to be a self-evident truth that all men people are created equal. “We the People” established a country “of the people, by the people and for the people.”

How do we keep it that way as inequality rises to the levels we were supposed to be escaping? The Walton family, for example, has more wealth (and resulting influence on government) than a third of all of us put together.

Estate Tax

The estate tax — a tax on the wealth passed down in extremely wealthy families — was established in 1916 to help our country avoid becoming a place where a few families owned and controlled everything. It currently only affects inheritances of more than $5.25 million, at a maximum rate of 40%. (This means if you inherit $5.45 million you don’t pay a penny. The tax only applies to amounts above that.)

One of the biggest fights coming up in the newly elected Congress next year will be “corporate tax reform.”

If you follow policy news you’ve been hearing that Congress wants to “reform” corporate taxes (again). When you hear talk of “reform” from our corporate-captured Congress it means you need to run as fast as you can — and organize. The way they use the word, it always means give them more and We, the People get less.

Senator Schumer Talking About Massive Break On Taxes Corporations Already Owe

Senator Chuck Schumer (D-Wall Street) might be Senate Majority Leader after the election. In a Tuesday CNBC interview he said he is hoping to work with Republican House Speaker Paul “Gut the Government” Ryan on “some kind of international tax reform tied to a large infrastructure program.” In the interview Schumer said:

If you can get overseas money to come back here, even if it’s at a lower rate than the 35 it now comes back at, and you can use that money for a major constructive purpose such as infrastructure, if you did an infrastructure bank, for instance, you could get $100 billion in equity in the bank and get a trillion dollars of infrastructure.

“Tax cuts skewed towards the wealthy elite starve our communities of much-needed resources while further tilting the scales towards large corporations and the rich.”
– Stephen Rouzer at Main Street Alliance

If you cut taxes for the rich and giant corporations, what happens to the rest of us? Tax cuts mean budget cuts, so what suffers is education, infrastructure and all kinds of things government does to make our lives better and our local businesses stronger.

Republicans argue that pushing wealth and income to the top few has a “trickle down” effect. They say wealthy people (like Paris Hilton) are “makers” who “create jobs” and therefore deserve to have heaps of money pushed their way for their benefit. They say that government spending on things that make the lives of We the People better really just makes us into “takers.”

But in reality, policies that push more and more of our country’s resources into the largest hands put our smaller hands at even more of a disadvantage. The giant corporations have huge advantages over small, local businesses just due to their size; huge tax breaks on top of their size-given advantages just make it that much harder for smaller businesses to compete. So the “WalMart business model” of undercutting and bankrupting a community’s small businesses and draining entire regions of wealth gains even more power. After decades of these “trickle down” policies, this is also known as “look around you.”

“Multinational corporations’ use of tax havens allows them to avoid an estimated $100 billion in federal income taxes each year,” says a new report just released by Citizens for Tax Justice (CTJ), Institute on Taxation and Economic Policy (ITEP) and U.S. Public Interest Research Group Education Fund (U.S. PIRG).

That report, “Offshore Shell Games 2016,” explains how “U.S.-based multinational corporations are allowed to play by a different set of rules” when it comes to paying taxes.

Congress – for obviou$ rea$on$ – refuses to stop this “deferral” loophole. And then these same companies fund “think tanks” and other propaganda mills that tell us we have a huge budget “deficit” and “debt” problem and therefore need to cut spending on things that make people’s lives better.

From the report’s executive summary:

Most of America’s largest corporations maintain subsidiaries in offshore tax havens. At least 358 companies, nearly 72 percent of the Fortune 500, operate subsidiaries in tax haven jurisdictions as of the end of 2014.

-All told, these 358 companies maintain at least 7,622 tax haven subsidiaries.

-The 30 companies with the most money officially booked offshore for tax purposes collectively operate 1,225 tax haven subsidiaries.

The U.S. Census Bureau reported last week that the August trade deficit rose 3 percent to $40.73 billion from July’s $39.5 (slightly revised). Both exports and imports rose, with imports rising more than exports. August exports were $187.9 billion up $1.5 billion from July. August imports were $228.6 billion up $2.6 billion.

The goods deficit was $60.3 billion, offset by a services surplus of $19.6 billion.

Imports from China increased 9.5 percent.

Is Increased “Trade” Good If It Really Means Increased Trade Deficits?

“Trade” is generally considered a good thing. But consider this: closing an American factory and firing its workers (not to mention the managers, supply chain, truck drivers, etc affected) and instead producing the same goods in a country with low wages and few environmental protections, then bringing the same goods back to sell in the same stores increases “trade” because now those goods cross a border. This is how “trade” results in a structural trade deficit. Goods once made here are made there, the economic gains move from here to there.

China has a huge overcapacity in steel production because their economy is slowing, so internal demand for steel has fallen. Rather than cut production and lay off some of their own workers, China is exporting the problem. China is “dumping” steel on international markets below cost, forcing closure of steel facilities and layoffs across the world. Some competitors are even going out of business.

April’s post, “The Big Fight Over Chinese Steel” explained how China reacts as a country, while we react as a “market” with a number of companies in it, which gives China a huge advantage:

China increased its steel production capacity by 540 percent between 2000 and 2014. Then the market slowed. …

China, of course, wants to keep Chinese people employed. And China is a country that sees and does things as a country, not just a “market.” They have national industrial strategies that involve providing financing, low-cost energy, even free land to companies that operate according to the plan.

“Market” economy countries do not generally have national plans, so their companies compete individually against countries like China.

The candidates discussed “trade” for a few minutes during the first presidential debate on Monday. Once again the opportunity for a meaningful dialogue on an important issue slipped away. Where do we go from here?

That was the subject of a teleconference Wednesday night between activists from around the country and Sen. Jeff Merkley (D-Ore.). The call was titled “Defeat the Trans-Pacific Partnership: bad for workers, bad for democracy, bad for People and the Planet.”

On the call, Sen. Merkley said that we have to “stop this gigantic trade deal, we have to stop it dead in its tracks.”

Merkley said to the activists on the call that they “have to be incredibly attentive during this period,” because even though the TPP is now opposed by top congressional leadership as well as both major presidential candidates, the tremendous pressure from multinational corporations on Congress could change that and tilt key members toward passage.

“We have to have a force inside the Congress and a grassroots force outside creating pressure and you all are that outside grassroots force. Because it is only with that attention and pressure that the swing votes will move,” he said.