September 9, 2011
by Wayne Ruple
U.S. Congressman Mike Rogers told diners in Jack’s Restaurant in Heflin last week that a lack of jobs is America’s biggest problem coupled with consumer confidence.
And to help remedy the problem Rogers said he is supporting a bill dealing with manufacturing which he hopes, if passed, will bring many factories back to America.
He said the bill exempts any manufacturer from paying taxes for the first two years they come back into the states and also reduces the regulations they would be under.
“The workers will pay taxes,” he said while pointing out that such a program has worked in Alabama with many of the auto industries. “It’s been a boon for us. They pay no taxes” he said of the auto manufacturers, while workers pay taxes on their salaries and then what they have left over trickles down into the economy. “I’m excited about that,” he added.
But according to GoodJobsFirst.org “Alabama’s remarkable tax giveaways have not brought the state broad prosperity; indeed, it still has one of the nation’s highest poverty rates.” Since 1993 Alabama has spent roughly $1.4 billion of taxpayer’s money subsidizing some of the worlds wealthiest companies to locate here including ThyssenKrupp, Mercedes-Benz, Honda, Hyundai and Wal-Mart.
But “trickle down” doesn’t always occur as planned. An article in savannahnow.com notes that “serious growth never came” to the small community of Vance, where Mercedes-Benz located it’s plant. “The plant is ringed with unsold land” – some of which jumped to $10,000 per acre, notes the article. And an assistant vice president of First Financial Bank in Vance told savannahnow.com that a planned housing development was an “immense failure.”
“Whether it (giving Mercedes $430 million in subsidizes) was an appropriate use of public tax dollars remains an issue,” noted savannahnow.com. Alabama even agreed to pay workers for first years on the job and spent an estimated $220,000, including training, per worker as most of the jobs paid around $60,000 per year.
In 2008 the plant reduced production, shortened the paid workweek to four days and offered buyout packages. Last year the company needed more workers but decided to use 500 temporary workers.
And while bringing good pay to workers, each facility over time has had ups and downs including Honda, who in 2009, cut their output in nearby Lincoln and “workers forced to take unpaid leave and were offered buyouts,” due to economic downturns. GoodJobsFirst.org says “Wal-Mart was found to have more workers than any other employer in the state relying on publicly-funded health insurance."
Rogers also stated that a major problem in the states is that the US has the “highest corporate tax rate on the planet of 35 percent.”
However, The Week magazine for Sept. 2 in a “Briefing” article noted that while the rate is the highest in the world, “In reality, most U.S. companies pay far less by exploiting tax breaks and hoopholes” until some pay no more than 4.5 percent or less.
What the lunch crowd at Jack’s were not told is that of the 500 major companies on the S&P stock index, 115 companies paid less than 20 percent over the past five years.
And as the “Taxing corporations” story pointed out, “Nearly 40 paid less than 10 percent” with Boeing, a company mentioned in Roger’s presentation, paying a mere 4.5 percent on profits for the past five years.
Capital IQ reports that General Electric will pay little or nothing, thanks to its 975 lawyers and accountants, on its $14.2 billion in global profits.
And what might come as a greater shock to the fried chicken and hamburger eaters is that during the 1950s 30 percent of all federal taxes came from businesses but now only a mere 9 percent of federal revenues come from corporations – a paltry $191 billion compared to individual taxpayers who must pay $899 billion or 91 percent of the tax burden.
“It’s unpatriotic, it’s unfair, and we can’t afford it” Samuel King of the Greenlining Institute told The Week. King said Congress is willing to cut Medicare, Social Security, food safety, education and health without collecting additional monies from the wealthy corporations.
Said The Week, “It is estimated that U.S. companies have parked more than $1.5 trillion offshore” to prevent paying taxes.
Citizens For Tax Justice issued a report in June listing 12 major Fortune 500 companies that pay an effective tax rate of negative 1.5 percent on $171 billion in profits while reaping $62.4 billion in tax subsidies from the government.
According to the CIA’s Gini Index the distribution of income and wealth in America is among the worst on earth. America has a rating of 45 while the worst country on earth with the largest difference between rich and poor is Namibia with a 70 rating and the best nation is Sweden with a 23 rating. Nations with better ratings than the US include Iran, Nigeria, Russia, Jordan, Ghana, Yemen, Vietnam, India, Egypt, Algeria and other so-called Third World nations.
In his speech, Rogers said Gibson Guitar has been “raided by the feds and told to move to Malaysia.”
Indeed, according to The Wall Street Journal, Sept. 1, 201l, federal authorities have raided Gibson but no charges have yet been filed. The feds claim ebony exported from India to Gibson was “fraudulently” labeled to evade Indian export laws. Gibson has worked with environmental groups to demonstrate responsibility in forestry issues and a spokesman told the Journal that a wood broker may have made a mistake. There was no mention in the article that government officials told Gibson to leave America.
Rogers said that during the last election, Americans said they wanted the spending and borrowing to stop in Washington. “There has been a lot of stuff stopped, but there hasn’t been much passed,” he said.
And with the nation $15 trillion in debt, he expects talks in Washington to start getting very ugly. “One party wants to spend less, one wants to spend more,” he added. “The credit card is maxed out. We have got to get spending down and revenues up. We’ve got to repeal Obamacare and repeal the Dodge/Frank bill” ( supposed to have restrictions preventing a future Wall Street financial meltdown)
But istockanalyst.com noted in a July 19, 2010 article that, “history will likely judge the financial overhaul bill that president Obama will soon sign into law as a major dodged bullet for Wall Street -- and a time when its army of Capitol Hill lobbyists really earned their pay.”
Rogers said Social Security and Medicare are “worthy” of trying to maintain but “The administration is trying to do through regulation what they can’t do by statute.”
McClatchy Newspapers recently surveyed a random sample of small business owners across the nation and found that regulations and taxes were not their problems – rising insurance costs and bureaucracy to secure government backed loans seemed to be the major stumbling blocks..
During a question/answer period one man asked why there is always talk in Washington about cutting Social Security and other benefits but not the pay of congressmen and senators. “Why are there always cuts to the poor and disabled since they are easy targets. Why not make cuts elsewhere,” asked the man who suggested a 30 percent cut in pay for Rogers and a reduction in his staff of 18.
Rogers responded, “You want live people you can deal with when you call my office. If you are not happy you can run me off if you don’t like the way I do it,” while adding that congressmen haven’t had a raise. “We cut them. We haven’t got a raise in three years. I don’t need this job. I took a pay cut. We want to make sure that those who are getting Social Security and disability benefits aren’t scamming the system and get rid of them. There is a lot of that going on. The system perpetrates it.”
Rogers agreed that the Republicans spent too much in past years but suggested Democratic spending is “on steroids.”
Cleburne County Commissioner Emmett Owen questioned Rogers about high gas prices that are “killing the working people.” He added, “I see it everyday. People can’t afford to come to work or get off unemployment because they can’t buy groceries and take care of kids with these high gas bills.”
Owen also suggested maybe it is time for term limits on senators who “get all this power and you can’t get them out.”
“You can run me off anytime you want but it is a seniority based system in Washington – it is driven by seniority. You can run everybody off and you will not get the time of day,” said Rogers.
On lowering gas prices, Roger said, “We need to get the tree huggers out of our way and start drilling off the coast of Florida, Virginia and South Carolina. Cuba has already given rights to China. The biggest thing in the US is that the administration (Obama) will not let us. We’ve got enough natural gas.”
Owen said there are thousands of wells off the coast of Alabama that are being leased to foreign countries and questioned why American companies are not getting tax incentives to drill or open capped wells.
Rogers said “Obama gave $2 billion to Brazil to help them drill. If we had drilling there would be competition” to drive down prices. “Competition is going to bring it down,” he said. “We can make a car that runs on water (hydrogen) but we’re only spending $4 billion on new energy. We’ve got to incentify” and indicated that, with the governments’ help new energy saving, non-gas, vehicles could be produced at an affordable price.
Another man asked Rogers how much the nation was in debt when Obama took office and after the nation borrowed money for two wars. “Obama came into office with debt” the man said.
The Washington Post recently reported that between 2001-2009 the defense budget rose by 70 percent to $699 billion and the US spends, “more on defense than the planet’s remaining countries put together” with much paying for the military’s “socialist economy” and wasteful weapons programs.
Roger’s said one of his greatest accomplishments while in office is the Medicare Part D that provides prescriptions drugs for seniors. “I don’t make any apologies,” he said.
One local resident, skeptical of global warming, said that American businesses would be far better off if the government would stop passing regulations that affect them. “Follow the money trail – there is no global warming. We are all smart enough to make our own decisions,” she said.
Rogers agreed, saying that her comments were “music to my ears” because he feels Americans can mass produce hydrogen powered cars to get the nation off of reliance on oil.
Another local resident said it cost Exxon Mobile about 60 cents per gallon to get crude from the well to the pump. “Gas prices have nothing to do with supply and demand. It is all about what goes on in the commodity exchange. Why can’t we make these people (on the commodity exchange) be buyers and sellers instead of gamblers? And talk about taxes, Wal-Mart pays no taxes. Exxon Mobile doesn’t pay a dime in taxes. Their CEO received $987 million in perks and not taxed. Most all businesses located overseas don’t pay taxes. Why are they getting a free ride? As for Obamacare, the US government pays health care on over 100 million people and private health care providers make 50 percent profit. Why are we running health care insurance through private companies so they can get rich and nickel and dime you? You (politicians) all are letting insurance companies rip the taxpayers off. Bush was in office for eight years and his administration was one of the most corrupt in American history. Bush left with $1.8 trillion budget deficit debt that Obama inherited. And, why don’t we put the brakes on the wars?”
Rogers responded by saying he would like to see the country go to a flat tax. “We ought to have a flat tax with no shelters, no nothing. That is the only way to be fair. GE made $26 billion last year and paid zero in taxes. It’s not fair,” he said.
However another resident took exception to that idea saying that contributions to colleges would fall because people who make a lot of money make donations to colleges.
Another resident said he feels many congressmen and senators are so old that they don’t know what they are voting for while another man suggested that voters should start writing letters to all congressmen and senators “and the idiot on Air Force One.”
Asked about signing pledges, Rogers said he had only signed a pledge and that was the first year he ran. He said he now has a voting record that can be checked and confirmed. “I am 100 percent NRA, 100 percent anti-abortion and I’ve never voted for a tax increase,” he said.
And while noting that America has many problems, he ended his presentation by saying that “We are the envy of the world.”