While Republicans push tax reform, the entire world is taking another look at just how much wealth corporations have been able to hide from taxing authorities. The Panama and Paradise Papers have unlocked just how much wealth has been successfully hidden from our governments. Arguing for tax breaks for corporations while the American People read about how corporations like Apple and Nike have hidden billions of dollars a year from the US government is ridiculous.
This incestuous relationship between government and corporations is a big part of the problem. With Panama, we discovered where politicians, royalty, and businessmen were hiding their wealth. With Paradise, we discovered that Corporations, too, are simply above the laws of the common man.
This helps the arguments of socialists who view free markets and businessmen as enemies of the people.
Government clearly isn’t the answer. Governments (the people running them) are the ones responsible, not only for creating these international systems of money laundering, but for participating in them as well.
This leads me to suspect that the best alternative to the failed system within which we operate today is to focus taxation on consumption, not income or earnings. The rich and powerful will always find a way to hide their income and earnings, but it is damn near impossible to hide their consumption. If we ended income taxes and corporate taxes and focused on consumption in and outside of the United States, the US government would dramatically expand their access to revenue. What’s the worst thing that could happen? The rich would consume less? Resources would be conserved?
Our tax system, on paper, seems aimed at the rich, but in reality most of the negative effects of our tax system are felt by the poor and the middle class. Republicans defending the virtue of America’s richest citizens aren’t virtuous capitalists – it is far more likely that they are corrupt Corporatists or irrational idealists.
Now, any resentment felt by “the people” toward the rich shouldn’t be turned into some kind of Eat The Rich Populism. Rather, let’s just change the tax system to reward those who save, conserve, and value every penny and dollar they earn. Liberals think that punishing earnings is a form of wealth redistribution. It isn’t. Panama and Paradise have demonstrated that taxing income and earnings is a joke. The wealthy find the loopholes and the middle class pay through the nose.
Tax money when it is spent, not when it is earned. Doing so is one of the most well-researched tax-strategies on earth and yet no one is using it. Why? Because our politicians, just like our aristocracies and corporations, are using tax loopholes that the rest of can’t afford to access to avoid paying their taxes, while the rest of us work for nearly half the year just to pay our taxes and fees.
Why should the government be getting interest-free loans from the poor and middle class anyway? Tax returns aren’t returned with interest.
If we continue to let the rich, to let our politicians and corporations get away with hoarding wealth overseas and avoiding the taxes the rest of us are forced at the point of a gun to pay, then capitalism is going to get overthrown. The only way to save capitalism is to ensure that our governments treat us all as equals. That means taxing consumption. Consumption is transparent, objective, and easily tracked. Apparently earnings and income and wealth are, for the wealthiest amongst us, quite easy to hide. Capitalism needs to be corruption-free. Panama and Paradise have demonstrated that it is not. Either we clean up our own house or we invite something far, far worse.