Free trade might very well be "the engine of our economy," but that engine hasn't done much to drive the average annual income of the bottom 90% of American workers. On the other hand, it has proven to be enormously lucrative for the financiers and factory owners who arrange the overseas deals.
As David Cay Johnston sees it, the tax laws subsidizing the free trade that impoverishes American workers or causes them to lose their jobs is just one aspect of the corporate socialism that has taken hold of America since the election of Ronald Reagan. Under the guise of fostering the so-called invisible hand of the market economy through deregulation and privatization, taxes paid by the bottom 90% on the income ladder have been lavished upon the corporate elite as subsidies.
According to Johnston, "Sam Walton practiced corporate socialism. As much as he could, he put the public's money to work for his benefit. Free land, long-term leases at below-market rates, pocketing sales taxes, even getting workers trained at government expense were among the ways Wal-Mart took every dollar of welfare it could get. Walton had a particular fondness for government-sponsored industrial revenue bonds, which cost him less in interest charges than the corporate bonds the market economy uses to raise money." [pp. 99-100]
Mayor Rudy Giuliani gave "an unannounced gift of $25 million in public funds" to both the New York Yankees and the New York Mets during his last days in office. That is, he "let each team hold back $5 million a year on their rent for Yankee and Shea stadiums, which the city [taxpayers] owns, and use the money to plan new stadiums."
"The Yankees used some of this money to hire lobbyists to arrange a further taxpayer subsidy for their new stadium." According to the Independent Budget Office for the city, the taxpayers' subsidy to the Yankees amounted to $275.8 million. When Johnston confronted Yankees President (and former Giuliani aide) Randy Levine about the morality of taking money from taxpayers who have far less money than George Steinbrenner, Levine not only conceded "that taxes are taken by threat of force," but also that "gifts from taxpayers to those who invest in big projects 'are the way government works today.'" [p. 72]
According to Johnston, when the Supreme Court refused to even hear the case of citizens from Toledo, Ohio -- who had their businesses and homes seized by the city, in order to give Chrysler the land it needed to rebuild its Jeep plant -- it "sent a clear signal that the policy of the United States is that the government can take from the many to give to the few - and those who object will not have their grievances heard by the courts" [p. 93] In the face of such legally sanctioned corporate socialism, the most effective response would be a widespread taxpayer revolt.
Finally, as if to guarantee that it's the taxes of the bottom 90% that are used to subsidize their wealth-creating enterprises of the corporate socialists, the Bush administration and Republicans in Congress pushed through tax cuts that not only gave 53% of the savings to the top ten percent of income earners in the United States, but also 15% of the tax savings to the 300,000 people who constitute the top tenth of one percent on the income ladder. In 2005, their average annual income was $25,726,965.
On February 19th, Barack Obama asserted that "we're going to rollback those Bush tax cuts that went to all the wealthy people, and we're going to give tax cuts to ordinary families, people who are making less than $75,000. We will offset your payroll tax." Like Obama, Senator McCain once opposed Bush's tax cuts for the rich. But, he's flip-flopped during his run for President and now will uphold them if elected.
Consequently, if David Cay Johnston is correct when he answers the question, "Why are the rich getting so much while the middle class struggles and the poor fall behind?" by concluding that "the elites have captured the government and are milking it for their own benefit" [pp. 22-23], then free trading, tax cut flip-flopper John McCain hardly seems to be the candidate to roll back corporate socialism's assault on the bottom 90% of the income ladder.
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