“Some men rob you with a six gun/And some with a fountain pen”
In her 2011 opening address to the North Carolina state legislature, Governor Bev Perdue called for a two percent reduction of the state’s corporate income tax, a move that would reduce the state’s tax receipts by more than a half a billion dollars over the next two years. This call from Perdue, a Democrat, is one that has been championed by the Republicans of North Carolina for a long time. Besides being one more bit of proof that there is very little difference between the Democrats and the GOP when it comes to kissing corporate tail, this call flies in the face of logic.
Like most other places in the US and elsewhere around the world, the state of North Carolina is facing millions of dollars in cuts. Libraries are being closed, public employees are being laid off and positions are not being filled. Schools are increasing class sizes, laying off teachers and threatening some districts with closures. Even police and other law enforcement (usually untouchable) are concerned about layoffs. Yet, Perdue and the legislature want to cut corporate taxes. Already, the income tax surcharge on North Carolina’s wealthiest taxpayers ended with the 2010 tax cycle. So, what are they thinking? Why is it that working people are expected to take cuts to their pay and benefits while the wealthy are not expected to take cuts and, in addition, are given a break ?
The rationale behind this call to reduce corporate taxes is as old as the tax system. According to those who champion this nonsensical idea, the reason North Carolina isn’t creating jobs is because corporations do not want to pay the 6.99% tax in North Carolina. If that tax is reduced, the tax cut’s proponents claim that more businesses will set up shop in the state. Ronald Reagan used a similar argument when he was president. He called it the trickle-down theory. (As far as I can tell, it felt a lot more like getting trickled on). The most recent national politician to make this idea into law is President Obama when he extended the tax cuts for the wealthy.
The big problem with this theory is that it doesn’t work. Jobs have been leaving this country by the millions since Reagan instituted his tax cuts and they haven’t come back. Corporations don’t want a tax cut. They want no taxes at all. Their bottom line is profit and most of them will go where that profit is the greatest. In other words, where labor costs are minimal and taxes are even less. It is the people of North Carolina that work in North Carolina’s factories and buy the corporations’ products, yet the politicians would have us believe that the corporations are doing us a favor by being here, and should therefore have to pay a lower rate of tax than the rest of us.
It should not be the duty of the government to facilitate a race to the economic bottom for those who live and work in North Carolina or any other state. Nor should it be the function of any government entity to enhance the coffers of its corporations at the expense of its citizens. Yet, by lowering the tax rate on corporations, this is exactly what North Carolina is doing. With less tax monies, there will be less money for services like schools. Already corporations come to North Carolina looking to pay lower wages, given the lack of unionized labor there. They should not also benefit from paying a lower rate of taxes than those who work for them.
The scenario described above is one that rightwing forces (with no small amount of acquiescence from liberals) have been putting into place nationwide for decades. The cost of this endeavor has been the safety and health of workers; the impoverishment of entire neighborhoods in the United States and nations around the world; and the impending destruction of the educational system, to name the first that come to mind. If this scenario comes true, it may never reverse.
The point being made here is that working people deserve a decent life just as much as those that employ them do. Just working is not enough. The worker uprising in Wisconsin is a recognition of this. As for those who tell private sector workers that it is the public sector workers’ fault for the current economic mess–that is, pure and simple, a lie. It is the rapaciousness of Wall Street and the governments that work for it that are to blame. These and other lies pitting workers against each other are just one more attempt by those in power to divide those who are feeling the pain of neoliberal capitalism’s heartless and avaricious greed. It’s a testimony to who controls the conversation around corporate taxation when merely demanding that they pay taxes at a rate comparable to the rate individuals pay is considered a radical proposal. It is also a testimony to the need to change that dynamic. Worker protests like that in Wisconsin are a good beginning.