When I was younger, I often heard the term “crony capitalism.” It was an abstract concept, one that was difficult for me to grasp due to its various meanings.
During the various election seasons, I often heard Democrats say Republicans were “in bed” with big business and I fought that statement with every breath I could muster. However, I soon came to realize, they were right.
Republicans are in bed with big business, but so are the Democrats. Both are subject to the whims of Wall-Street, Silicon Valley, and global corporations like Walmart, Big Pharma, and many others. Where they differentiate is that the Democrats also have the Unions, so they get the best of both worlds.
I used to ask, “why would a corporation support a law that clearly goes against their self-interests?” Little did I know that they were supporting their interests, just in a different way. You see, crony capitalism is when government and big business lobby one another for mutual gain. Corporations give money for elections and politicians support legislation that are beneficial for the corporations. How is this possible? Well, corporations like Walmart, Big Pharma, Unions, and Banks have access to Washington through powerful lobbyists.
For example, an increase in the corporate tax rate won’t hurt Walmart’s bottom line. It hurts the small start-up trying to make a buck and launch their product. It may hurt Walmart for a little, but at the end they get a greater share of the market once that small business dies.
Why would Warren Buffet support a higher tax rate for the rich? Because it doesn’t apply to him. The top 1% have access to the best accountants, attorney’s and financial managers money can buy. They move their money to the Cayman Islands, shell corporations, or living trusts. Want proof? Warren Buffet’s company, Berkshire Hathaway, owes almost a billion in taxes and has been fighting it in the courts for years. If Buffet is so pro-tax why doesn’t he just have his company pay it?
Hillary Clinton has supported an inheritance tax, death tax, and higher taxes on the wealthy. Do you know where Chelsea Clinton’s inheritance is? In a blind living trust. It is untouchable. Would we have the ability to do that? Probably not.
Google, Facebook, and Amazon, all of these companies owe taxes around the world. Some have even been threatened by foreign governments. Shouldn’t they pay their taxes? If memory serves me correctly, all of the CEO’s are liberals who support higher taxes on the wealthy and corporations.
Again, it’s easy to support something when you have the means and ability to avoid it completely. That is why you always see two-classes in communist countries. The rich and the poor. No matter how high the tax-rate on the rich goes up, they will always be rich. They know how to hide their money. They have connection to government officials and can sway votes. The rich know all the tricks of the trade and if they don’t, they know people who do.
These big corporations never do anything that goes against their interests. If they advocate for the minimum wage, it is not because they care about their employees. Make no mistake, it will benefit them in some way.
This is not the free-market. Government and Big Business in bed together is the opposite of a free-market. It is what we have been trying to guard against and both parties are at fault. That’s something that happens in a Banana Republic or Russia.
Lower taxes help everyone, especially the poor. The rich will get rich regardless. They will hide their money in “foundations” and “charities” or shell corporations.
Isn’t it time we actually helped the poor and middle class by letting them keep more of their money?
Isn’t it time we give start-up business a low tax structure so they can re-invest that money back into their business?
Most of all, isn’t it time that we create incentives for businesses to spend money in America again?