Ayn Rand USA: In 20 Years Corporate Profits Are Up 4X and Their Taxes Have Fallen by 50% — Meanwhile the Workers’ Payroll Tax Has Doubled

Corporations have decided to let middle-class workers pay for national investments that have largely benefited businesses over the years.

Source: AlterNet

Author: Paul Buchheit

Ayn Rand’s novel “Atlas Shrugged” fantasizes a world in which anti-government citizens reject taxes and regulations, and “stop the motor” by withdrawing themselves from the system of production. In a perverse twist on the writer’s theme the prediction is coming true. But instead of productive people rejecting taxes, rejected taxes are shutting down productive people.

Perhaps Ayn Rand never anticipated the impact of unregulated greed on a productive middle class. Perhaps she never understood the fairness of tax money for public research and infrastructure and security, all of which have contributed to the success of big business. She must have known about the inequality of the pre-Depression years. But she couldn’t have foreseen the concurrent rise in technology and globalization that allowed inequality to surge again, more quickly, in a manner that threatens to put the greediest offenders out of our reach.

Ayn Rand’s philosophy suggests that average working people are ‘takers.’ In reality, those in the best position to make money take all they can get, with no scruples about their working class victims, because taking, in the minds of the rich, serves as a model for success. The strategy involves tax avoidance, in numerous forms.

Corporations Stopped Paying

In the past twenty years, corporate profits have quadrupled while the corporate tax percent has dropped by half. The payroll tax, paid by workers, has doubled.

In effect, corporations have decided to let middle-class workers pay for national investments that have largely benefited businesses over the years. The greater part of basic research, especially for technology and health care, has been conducted with government money. Even today 60% of university research is government-supported. Corporations use highways and shipping lanes and airports to ship their products, the FAA and TSA and Coast Guard and Department of Transportation to safeguard them, a nationwide energy grid to power their factories, and communications towers and satellites to conduct online business.

Yet as corporate profits surge and taxes plummet, our infrastructure is deteriorating. The American Society of Civil Engineers estimates that $3.63 trillion is needed over the next seven years to make the necessary repairs.

Turning Taxes Into Thin Air

Corporations have used numerous and creative means to avoid their tax responsibilities. They have about a year’s worth of profits stashed untaxed overseas. According to the Wall Street Journal, about 60% of their cash is offshore. Yet these corporate ‘persons’ enjoy a foreign earned income exclusion that real U.S. persons don’t get.

Corporate tax haven ploys are legendary, with almost 19,000 companies claiming home office space in one building in the low-tax Cayman Islands. But they don’t want to give up their U.S. benefits. Tech companies in 19 tax haven jurisdictions received $18.7 billion in 2011 federal contracts. A lot of smaller companies are legally exempt from taxes. As of 2008, according to IRS data, fully 69% of U.S. corporations were organized as nontaxablebusinesses.

There’s much more. Companies call their CEO bonuses “performance pay” to get a lower rate. Private equity firms call fees “capital gains” to get a lower rate. Fast food companies call their lunch menus “intellectual property” to get a lower rate.

Prisons and casinos have stooped to the level of calling themselves “real estate investment trusts” (REITs) to gain tax exemptions. Stooping lower yet, Disney and others have added cows and sheep to their greenspace to get a farmland exemption.

The Richest Individuals Stopped Paying

The IRS estimated that 17 percent of taxes owed were not paid in 2006, leaving an underpayment of $450 billion. The revenue loss from tax havens approaches $450 billion. Subsidies from special deductions, exemptions, exclusions, credits, capital gains, and loopholes are estimated at over $1 trillion. Expenditures overwhelmingly benefit the richest taxpayers.

In keeping with Ayn Rand’s assurance that “Money is the barometer of a society’s virtue,” the super-rich are relentless in their quest to make more money by eliminating taxes. Instead of calling their income ‘income,’ they call it “carried interest” or “performance-based earnings” or “deferred pay.” And when they cash in their stock options, they might look up last year’s lowest price, write that in as a purchase date, cash in the concocted profits, and take advantage of the lower capital gains tax rate.

So Who Has To Pay?

Middle-class families. The $2 trillion in tax losses from underpayments, expenditures, and tax havens costs every middle-class family about $20,000 in community benefits, including health care and education and food and housing.

Schoolkids, too. A study of 265 large companies by Citizens for Tax Justice (CTJ) determined that about $14 billion per year in state income taxes was unpaid over three years. That’s approximately equal to the loss of 2012-13 education funding due to budget cuts.

And the lowest-income taxpayers make up the difference, based on new data that shows that the Earned Income Tax Credit is the single biggest compliance problem cited by the IRS. The average sentence for cheating with secret offshore financial accounts, according to the Wall Street Journal, is about half as long as in some other types of tax cases.

Atlas Can’t Be Found Among the Rich

Only 3 percent of the CEOs, upper management, and financial professionals were entrepreneurs in 2005, even though they made up about 60 percent of the richest .1% of Americans. A recent study found that less than 1 percent of all entrepreneurs came from very rich or very poor backgrounds. Job creators come from the middle class.

So if the super-rich are not holding the world on their shoulders, what do they do with their money? According to both Marketwatch and economist Edward Wolff, over 90 percent of the assets owned by millionaires are held in a combination of low-risk investments (bonds and cash), personal business accounts, the stock market, and real estate.

Ayn Rand’s hero John Galt said, “We are on strike against those who believe that one man must exist for the sake of another.” In his world, Atlas has it easy, with only himself to think about.

Paul Buchheit teaches economic inequality at DePaul University. He is the founder and developer of the Web sites UsAgainstGreed.orgPayUpNow.org and RappingHistory.org, and the editor and main author of “American Wars: Illusions and Realities” (Clarity Press). He can be reached at paul@UsAgainstGreed.org.

Emphasis Mine

see: http://www.alternet.org/economy/ayn-rand-usa-20-years-corporate-profits-are-4x-and-their-taxes-have-fallen-50-meanwhile?akid=10427.123424.9d7q5C&rd=1&src=newsletter839254&t=5

Ayn Rand. Just Go Away

For a time, I was a devotee of Ayn Rand’s ideas. Now I see what a pernicious philosophy rational egoism is – and how dumb!

From: RSN

By: Victoria Bekiempis, Guardian UK

“Ayn Rand is one of those people whom you just want to go away, but won’t.

I say this not with hate or ignorance, but with deep familiarity.

When, as a self-absorbed college freshman, I first came across the Russian emigre author of The Fountainhead and Atlas Shrugged, she seemed like the coolest thinker ever – what selfish person doesn’t want to hear that being selfish doesn’t just feel good, but actually is good, too?

I quickly devoured nearly all of her atrocious tomes with a sort of blind hunger – that ferocious pseudo-intellectual reading you do only to confirm your beliefs, if you will. Indeed, I devotedly hung on her every word, even becoming an officer of my university’s Objectivist club. At one point, I may even have been president.

Much to the lament of my philosophy classmates, I was that girl who frequently (and loudly!) argued in favor of Rand’s illogical claims that altruism doesn’t exist; that selfishness is a virtue; and that “rational egoism” is the only right way to live.

Thankfully, I grew out of that phase. Not surprisingly, but a few years of minimum-wage work cleaning up cat faeces, without benefits, and other thankless, unstable odd jobs made me question Objectivism‘s foundations and rekindled an earlier interest in anarcho-syndicalism.

Eventually, leaving Rand was no more different or difficult than, say, leaving a friend who had grown to annoy me over time – sure, I was very intimate with her ideas, but that just gave me more insight into their outright dysfunctionality, and the strength to say “sayonara!”

What’s scary is that so many Americans have not grown out of that mentally puerile phase. Instead, this contingent – now largely comprised of Tea Party radicals – remains mired in her pop philosophy.

(Only now has Republican Congressman Paul Ryan, perhaps realizing that supporting an atheist adulterer might hurt his veep chances, changed his tune from Objectivist fanboy to follower of Thomas Aquinas.)

Granted, it’s doubtful that any political group so suspicious of the intelligentsia would actually read Rand’s 1,200 page magnum opus, Atlas Shrugged, but her ideas are clearly being used to justify inequality, giving credence to institutionalized wealth-based elitism.

This has to stop, and stop now. But not just for the reasons that typically get brought up. Anti-Rand commentators have long pointed out both the pragmatic and personal problems with Rand. As evidenced by the Great Recession, for example, anything even remotely close to the unfettered capitalism advocated by Rand plainly does not work.

Also, as evidenced by her personal life, she was more a hypocritical, questionable character than a moral role model. As a teenager in Russia, “she watched her family nearly starve while she treated herself to the theater.” She railed against government benefits but cheerfully collected social security and Medicare. She championed integrity, but bastardized Nietzsche’s best ideas.

And her writing skills aren’t just mediocre; if anything, her penchant for 200-page monologues and wooden characters suggests that they’re non-existent. And she has this thing for rapey scenes; and her approach to BDSM goes for a Mad Men-esque chauvinist chic – not healthy sex positivism.

Of course, all that doesn’t actually say anything about her “philosophy”; it just makes the case that she’s a jerk and a hack. That said, her theory – and summarily, its corollaries – are belied by the abject sketchiness of their most basic premise: rational egoism. Far smarter, more articulate people than me have pointed this out, but what needs to be emphasized is that Rand conflates descriptive psychological egoism (people act in their self-interest) with normative ethical egoism (acting in self-interest is the right thing to do). Part of this “ought-from-an-is”-type assumption is that altruism does not exist – very much the backbone of her belief system.

West Valley College‘s Sandra LaFave does a great job following this line of thought and pointing out why it doesn’t work. The basic claim of egoists, LaFave notes, is that people “always and invariably act in their self-interest”. However, most moral codes call for altruism, which, in egoists’ account, is “demanding the impossible”. Moral codes, so egoists’ thinking goes, should not demand “the impossible”, so we should take up a “more realistic” system such as – ta-da! – ethical egoism.

To accept this conclusion, you have to accept the premise that psychological egoism is a given fact in the first place. To date, neither Rand nor anyone else has been able to prove definitively that the proverbial soldier who dives on a grenade acts selfishly, not altruistically.

Even if, for the sake of argument, we accepted that all acts were selfish, there certainly seem to be a great many unselfish-looking selfish acts (diving on the grenade to save your comrades), as well as selfish-seeming selfish acts (blowing your kid’s college tuition money on a shopping spree.) LaFave points out that this “empirical distinction” renders across-the-board selfishness more of a semantic trick than something that meaningfully describes ethics. Go ahead and claim all human acts come from self-interest, fine. This seems kind of silly, however, when the morality of said selfish acts will still be measured by how altruistic they seem.

Another key concern is that psychological egoism might not be final stage of an individual’s ethical development. We start off selfish, say some theorists, but we must move beyond convention and toward post-conventional social contract and conscience for true moral growth. Even if we were to concede that these foundational problems do not deal a death-blow to Objectivism – which would be very generous of us (yet generous in a selfish way, of course) – it still seems perverse to peg so much on so shaky a foundation.

The kernel of this belief system is nothing more than a philosophically hollow shell. It should absolutely not play a role in policy-making – especially when the end result would be disastrous. I outgrew Rand; now I wish America would, too.”

Emphasis Mine

see: http://readersupportednews.org/opinion2/277-75/11863-focus-ayn-rand-just-go-away