Why Don’t Republicans Want You To Know Where Their Money Is Coming From?

October 14, 2010

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I don’t hide the fact that I find the Republican party disgusting for giving massive gifts to corporate America, but I find the Democratic party at least as culpable for having no spine and allowing it to happen. With the Citizen’s United ruling on January 21st of this year, the floodgates opened completely in terms of buying elections. At this point in time political ads can now be paid for by any corporation and the ad itself does not have to disclose where that money came from. That doesn’t seem so bad, does it? Picture this: Imagine a television ad that shows police brutalizing people, or overbearing and threatening border guards harassing people. The ad says to vote for candidate X who will reign in police and border guard power, and slash spending on those things. Now picture that same ad paid for by North Korean or Chinese corporations, or even holding companies with terrorist sponsors. How about ads secretly paid for by the Westboro Baptist Church that wants guarantees of free speech rights at funerals regardless of state or local laws? (my simple solution for Fred Phelps is to have local laws that allow privacy in an certain radius for military funerals, as if the funeral were private property for that specific event only).

Those are just extreme examples, don’t worry, I’m not advocating those things.

The Republican butt-kissing of corporate power is so ingrained at this point that they actually have voted down The DISCLOSE Act, which would require the source of any money spent on all on political ads to be known and public. That’s corporate dollars, union dollars, and private dollars – DISCLOSE doesn’t discriminate. Seems like a no-brainer, right? I wonder what republicans have to hide – shady corporate money, maybe?

Ahh yes, those Republicans. The champions of small business. Small business like Bechtel and Koch Industries.

… wait, what?

That’s right, thanks to government business classifications, those companies and many more are called “S Corporations“. This means that they may have revenues well into the billions, but because that money is passed directly on to owners who then pay taxes, they are considered small business. What is a big business, then? One that takes in profits that are taxed and then passes those profits on to shareholders. John Boehner recently claimed that under the current Democrat tax proposal “about half of all small business income will be taxed [at a higher rate]. ” Well, if you take the actual number of businesses only 3% of REAL small business will be taxed at a higher rate. Boehner can only claim that 50% of small business income would be taxed at a higher rate when he includes multibillion dollar companies like Bechtel and Koch. These companies fit Boehner’s definition of a small business – being non-shareholder (private) companies – but have very little in common with the small business that used to line main street in your home town.

In other words, he’s holding up continuing tax breaks for Mom-and-Pop businesses because he wants to pass off Bechtel and Koch as small business without the average person knowing about it.  This is the same John Boehner who blamed the current financial crisis on “3 things – Fannie Mae, Freddy Mac, and subprime lending” without saying that it was de-regulation and laws pushed through by Republican majority congresses that allowed those things to happen. They call it freedom for business, I call it corporate power screwing people over because government allowed it.

What are the Democrats doing about it? Well, once again they’re looking for their spine. At least they have their heart in the right place; the current administration wants the George W. Bush tax cuts to be extended only for the first $200,000 of a person’s income, or $250,000 for families. While Republicans claim those tax breaks would affect us all because they keep pushing the trickle-down economy lie, the real numbers tell a different story: fewer than 750,000 people, less than .25% would be affected by the top tax rate under the Democrat proposal.  Trickle-down does not work. It is simply an expression created to hide the fact that big business is allowed to feed on the average Joe and legal loopholes and laws are created every year to favor corporations and the rich. Data simply does not support any claim that trickle-down does work.

With massive evidence that the disparity between income classes only continues to grow bigger, the Republican Party of No is just pushing for more laws to make the rich richer at everyone else’s expense. Hooray for the Corporate States of America – would you trust BP, Dow Chemical, or Toyota with unchecked power?

4 Comments (+add yours?)

  1. Squeaky
    Oct 14, 2010 @ 18:01:52

    Zarberg, I like today’s column and I agree with you for the most part. The Republicans are very pro business and the Dems are spineless. The Republicans do seem to be a little overboard at times being proponents of the businesses, but the Dems are too far the opposite…they’re all for putting it to “the man. That would be fine if I believed in government redistribution of wealth, but I don’t. I’m not a huge believer in trickle down either, but you and I have both taken multiple Econ classes and there are years of proof that it is the best thing we have. Hitting businesses of any size with incredibly high taxes isn’t fair in my opinion at all. At the same time, giving them special tax breaks isn’t either. I try to remind myself that our economy is based on the success of these businesses and that we have to give them some protection.

    I fully agree with you that all funding needs to be disclosed. I don’t however agree that all of the businesses making donations should have to disclose all paying members. For example, I’m a member of several groups related to firearms and other subjects that Janet Napolitano would deem “extreme” and I’d probably end up on more lists. Personally, I don’t need that. If the NRA or Northern Colorado Gun Owners decides to make contributions to something, I don’t want my name all over that list even though I’m a card carrying member.

    I’ll finish up by saying that many small businesses do fall into a sole proprieterships and partnerships. If the tax cuts are lowered into the 200k – 250k range it will impact them and will slow down the economy more—in my opinion.

    Great job today.


  2. Tiberius Kane
    Oct 25, 2010 @ 16:11:52

    Why do we have different laws for very successful people (S corporation) and different laws for moderately successful people (mom and pop corporation)? The desire and execution of disparate tax laws is just one example of liberal inequality and inequity that I oppose.

    The Constitution of the United States, Article I, Section 9, paragraph 3 provides that: “No Bill of Attainder or ex post facto Law will be passed.” A bill of attainder is a legislative act that singles out one or more persons and imposed punishment on them, without benefit of trial. We have two people in the same situation but one is singled out and taxed at a progressively higher rate solely because they are more successful. I, as most Repbulicans, feel this is wrong and unconstitutional.

    When will 0bama disclouse all of his donors like John McCain did?


  3. Zarberg
    Oct 25, 2010 @ 16:18:21

    Your comments would make better sense in a world where the rich couldn’t avoid taxes due to loopholes made through nepotism and cronyism, and a world where politics were immune from the monitary power of lobbyists. I’m sure you think I’m idealistic and possibly even naive for saying that, but I’ll come right back and say anyone who believes “trickle-down” works or believes lowering taxes is what will bring jobs back is equally naive and idealistic.

    Again, if the flat tax took into account the fact that it’s (generally) more punishing on lower income brackets, I’d be all for it. As it stands now the rich are able to pay a smaller amount of their income in taxes as wealth goes up due to the ability to hire lawyers and accountants to find loopholes, despite having a higher tax bracket.


  4. kosmo
    Oct 25, 2010 @ 20:15:26

    I think there might be some confusion about S Corporations. Mom and Pop establishments can definitely set themselves up as S Corps, and in fact many do in order to get the liability protections that aren’t available to partnerships and sole proprietorships. LLCs and LLPs have filled this gap a bit in recent years, though.

    An S-Corp essentially blends the tax benefits of a partnership or sole proprietorship (no double taxation of profits) with the limited liability of a corporation. However, (in general) it’s no better than a sole proprietorship or partnership when it comes to taxes (none have double taxation of profits), nor better than a regular corporation (c-corp) when it come to liability (both protect the personal assets of shareholders).

    There are a ton of tiny S-Corps out there … but also some ones with huge profits, because the major cap on S-Corps is the number of shareholders (not to exceed 100), rather than anything tied to revenue or profits. There are some huge companies who founders had the good sense (and ability) to avoid selling off large chunks via IPO … resulting in some huge, but closely held (often just family members) companies.


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