There is Such a Thing as a Free Lunch

For the super rich, corporate executives and others in power that is.

David Kay Johnston has written another book on taxes, FREE LUNCH - How the Wealthiest Americans Enrich Themselves at Government Expense (And Stick You With The Bill). He writes story after story how you're paying for your own economic destruction, often through the United States tax code.

Of each dollar people earned in 2005, the top 10 percent got 48.5 cents. That was the top tenths greatest share of the income pie since 1929, just before the Roaring Twenties collapsed into the Great Depression

A few truths Johnston expands upon:

  • Government can have a huge effect on the US economy
  • The US government has not created free markets but rigged ones
  • The U.S. is not a laissez-faire economy

Johnston writes about Magnequench was a magnet manufacturer that was sold off and moved to China. It's critical technology makes smart bombs. Johnston tells the tale of how it was sold off as a glorified bribe by GM to China to get into the mythical billion consumers market. (I should note that Hillary Clinton addressed this particular sale in her Stop Outsourcing National Security plan). Even worse is now the United States has lost it's technical know-how on making these magnets and even shut down it's only mine for the raw materials.

Just as a reminder, American corporations do not pay US tax on profits earned overseas as long as the profits are not repatriated. The US corporate tax code also allows corporations to reduce their US tax bill by whatever taxes they pay to other governments. Now maybe one might see what corporations are so intent on these bad trade deals.

Johnston has a chapter on lobbyists, which begins:

Influencing Government is one of the fastest-growing industries in America. In 1975, Washington lobbyists collected less than $100 million in fees. Has their fees grown at the same rate as the economy, lobbyists would have taken in about $250 milion by 2006. In reality, they took in 10 times that - more than $2.5 billion

Johnston writes his text in narrative. Contained within are great stories, detailing the outrageous and outright theft of our money. Johnston asks what to do and his answer is to clean up Washington and get rid of the lobbyists, with their favors and their money. I agree with that one.

Other topics covered are how sport centers, teams, even golf courses, which your average American cannot even afford a ticket to, are subsidized by the U.S. taxpayer while these privately owned enterprises reap the profits. Land being seized and compensation at a fraction of what the property is worth, huge tax subsidies and breaks for large retailers which the costs of would never equate with jobs or future revenues and additional drive the competition into bankruptcy, home owner title insurance rackets, predatory student loans, subsidized by the U.S. taxpayer to boot, Enron and their government enabled Ponzi and Cartel schemes, John Snow (who personifies this entire corporation of our government) the point people die, the prescription drug lobbyist bill....

Well, the book reads like the corporate version of a slasher horror movie, but this time the victim is the entire US middle class .

I highly recommend this book. It's loaded with facts about the true state of America for most Americans, such as this one:

An estimated 200,000 young people do not attend college each year simply because they lack the resources. Many do not finish because they cannot sustain the cost for four or more years

One of the worst things to have happened is Johnston left The New York Times. There are hardly any reporters covering taxes, including blogs, so I fear the US tax code will enter even more obscurity than it already is.

List of New York Times articles written by David Cay Johnston.

Bill Moyers interview with David Cay Johston.

Forbes Q&A

NPR radio (audio) interview.

Democracy Now! interview.

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Comments

free lunch

As someone who thinks of himself as a Populist I don't like advocating more taxation for anybody (or corporate entities either) at the same time am vehemently opposed to corporate welfare, and loopholes as well as the "revolving door", no-bid contracts, corporate fascism, and a host of other ills that occur when politicians and CEOs get in bed together.

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