Barack Obama's Corporate Tax Policy

Our country is moving towards a socialistic society everyday as our federal government increases its power and size. A socialistic society is one where the central government is very large and taxes its people heavily to support all their social programs such as health care to aid their people. The United States is moving in this direction. John Edwards and Barack Obama, both Democratic presidential candidates that insist all of America’s problems are due to large corporations. This is Edward's main campaign principle and slogan he is running on. They both believe large businesses are making middle class Americans lives more difficult in terms of less wealth. Edwards and Obama want to punish big businesses and tax them heavily to support the middle class. This policy is supported by nearly all the liberal people in this country. This is scary because Edwards and Obama do not understand basic economics since the result of their actions to raise taxes on big businesses will have a huge fall out. Corporations will see their stock values decrease as their revenues go down forcing the United States into a recession. Another possibility for corporations to maintain their profit margins through higher taxes is to pass the tax burden onto the consumer. Corporations may also try to stay profitable or competitive by laying more people off and sending more jobs overseas increasing the national unemployment rate. Corporations will be forced to reduce and possibly eliminate benefits such as 401K, pensions, and health care insurance to stay competitive. Hence, this action could have an opposite effect on the middle class by sending more people into poverty.

Even a moderate corporate policy of providing tax relief to companies that keep jobs in the United States and heavily taxing those companies that allows jobs to move overseas has flaws. This action would benefit companies whose competition is only in the United States. American companies would not be able to compete against global companies that have access to cheap labor. The result of such a policy may have an opposite effect on the American middle class if United States corporations are forced out of business. It is these philosophies that will continue to destroy the United States’ capitalistic society and send us further towards becoming a socialistic state. Edwards and Obama are brainwashing Americans into believing that the federal government is the savior while big business and capitalism is the enemy. Edwards and Obama are correct with his assessment that large corporations and their lobbyist certainly influence political decisions and policies. They are right that this practice has got to stop, but it is not just corporations to blame since it takes two to tango. The government and its members are allowing it to happen. Edwards and Obama fail to see the main culprit of our problems and what is hurting the middle class is the federal government’s excessive and double taxing of its citizens to maintain failed social policies they had no business creating in the first place. Instead, logic should dictate that by lowering corporate taxes it would help businesses become more profitable and encourage growth and employment and prevent jobs from going overseas. Edwards is a lawyer and should understand that frivolous litigation against corporations, which he supports, is also lowering their profits and causing the same effect as raising taxes.

There are a lot of factors contributing to companies moving jobs overseas, but the main reason is financial. Labor is substantially cheaper overseas due to a plethora of reasons. First, many up and coming industrialized nations such as India and China do not have any enforced labor laws. This means employees do not have many rights and are forced to work for sub par wages. Second, corporate taxes in most industrialized nations have lower federal tax rates than in the United States. Third, India and China corporations do not have nearly as many governmental controls and bureaucracies to deal with such as trade or environmental restrictions. These measures make it almost impossible for American corporations to compete with foreign corporations. Hence, they are forced to move jobs overseas or go bankrupt. The unfortunate realization of the above claims is that our government has little control over correcting the problem. Other than lowering taxes, the United States can pressure India and China to meet acceptable labor laws and environmental regulations, but they cannot make it happen. Thus, preventing jobs from moving overseas is going to be hard to correct, but it certainly will get worse if corporate taxes are raised.

There are other factors, excluding cheap labor, which will continue to force more American jobs overseas. Today, the American “blue collar” worker averages over fifty years old. When they retire, there will be no Americans willing or capable of doing the work other than illegal aliens. First, many Americans refuse to do any labor jobs for a variety of reasons. There are those lazy Americans that are content to earn welfare and there are those spoiled “over parented” kids unwilling to do any labor work. Secondly, children lack the proper education and preparation to do “blue collar” jobs. Although there are trade schools that teach children how to perform labor jobs, however regular schooling falls short of teaching children how to use their hands to perform even the most mundane task. Schools have taken physical education, art, shop, home education, and any other classes out of their curriculum. These classes would prepare kids for “blue collar” jobs because it teaches them not only how to use their hands, but it instills the coordination, confidence, and physical strength needed to do “blue collar” labor jobs. It teaches and trains youths that there is more to education than a computer and the Internet.

No matter what the reason is for jobs moving overseas, it is obvious that our government has absolutely no clue on how to stop and prevent it from happening in the future. When our leaders stress higher corporate taxes and standardized testing at the expense of a balanced education for our children, it only indicates the growing trend of jobs moving overseas will continue. Leaders are out of touch with the American people and reality when they blame corporations for causing the problem. Our leaders have an elitist attitude with a super ego personality that inhibits them from recognizing it is their policies that is causing the epidemic.