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Taming Our Monsters

By       Message Fred Gohlke       (Page 2 of 2 pages) Become a premium member to see this article and all articles as one long page.     Permalink

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Limiting Excessive Growth
Growth requires nutrients.  We provide corporations with physical and human resources and a legislative environment that supports their operation.  It is our right, indeed our duty, to see that these resources are not abused.  When we let corporations become 'Too Big To Fail' , we fail to meet that obligation.

To re-establish economic equilibrium, we must exercise our right to prevent abuse of the nutrients we provide.  We can do that by making excessive size a burden; by levying a progressive tax on gross receipts, without reserve or allowance.

We need a gross receipts tax; a fee for the use of the resources we offer entrepreneurs to develop their ideas.  The tax is not concerned with the profitability of the taxpayer.  Whether or not the enterprise is profitable does not change the amount of resources it exploits in its operation.

If, by the nature of its business, an enterprise must be large, it is not injured by the gross receipts tax because all competing businesses must attain a similar size and will pay a comparable tax.  However, when a company attains unjustified size by manipulating the rules in its own favor or dominating its competitors to the detriment of the public, the tax adds a cost to its operation.

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When a corporation grows to a size that exceeds its value to society, the gross receipts tax acts as an umbrella, increasing its cost of operation and giving its competitors a cost advantage that prevents their suffocation.

Competition is critical to a free market economy and a progressive gross receipts tax enhances competition immeasurably by preventing the suffocation of smaller businesses.  This allows the surviving companies to maintain their own direct employment as well as the indirect employment of the support services that supply them and their employees.

The Gross Receipts Tax
The gross receipts tax is levied on the annual gross receipts of all taxable entities, animate or inanimate, from all sources and for all amounts received in their name by entities they control (including franchises), less amounts paid to external vendors in which the entity has no managerial, directorial or financial interest of any amount or kind.

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The tax is progressive.  Assuming inception of the tax at $1,000,000 and a base rate of 2%, 2% is added to the rate each time the receipts increase by one decimal position, with the tax rate increasing proportionally from one order of magnitude to the next.

Annual Gross Receipts    Tax Rate
           $1,000,000        2%
          $10,000,000        4%
         $100,000,000        6%
       $1,000,000,000        8%
      $10,000,000,000       10%
     $100,000,000,000       12%
   $1,000,000,000,000       14%

Public Benefits

A Progressive Gross Receipts Tax has a number of beneficial aspects.  It is gentle because it only becomes burdensome when companies exceed their benefit to society.  It lets taxpayers pursue their own interest in their own way and leaves size decisions in the hands of management.  It benefits stockholders because management is encouraged to pay profits out in dividends instead of funding voracious, anti-social growth.  It makes huge corporations provide revenue for the government that nurtures them.  It eliminates "Too Big To Fail" companies without additional regulation.

In addition to allowing the dynamic growth of small businesses, with the attendant direct employment of our people and the rebirth of the supporting businesses that are the cornerstone of vibrant communities throughout our country, this tax will eliminate inflation.   Right now, huge corporations with 'pricing power' benefit from inflation because it adversely affects their smaller competitors.  People and businesses at the lower end of the economic ladder never have pricing power.  For them inflation is an unmitigated evil.   The progressive nature of this tax makes inflation bad for large companies because their tax rate increases as their gross revenue rises.  The progressive gross receipts tax will encourage large corporations to fight inflation.

Enacting the Tax
If we are going to get a progressive tax on gross receipts, we are all going to have to stand up an be counted.  This is not something we can accomplish exclusively by classical non-violent means.  Protesting and letters to the editor are not going to get those who control our political system to loosen their grip.  We're going to have to 'invade' Washington.

All the people who gathered to spread the Tea Party and the Occupy Wall Street message are going to have to gather again, and they're going to have to bring all their friends and relatives.

When our public officials see that we, the people, are serious and that we are going to get this law enacted, we'll get their attention.  We may be met with force, as was the Bonus Army during President Hoover's administration, and we may have to fight back!

Our best hope for a peaceful settlement will be if our President has the courage and the integrity to order the police forces and military to stand down and respect the wishes of the people.   If we get that kind of support from our President, our Congress will enact this simple, obvious, and desperately needed protection for the people.

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Do we have the courage to fight the "unholy alliance between corrupt business and corrupt politics"?

Let's find out!!!

Fred Gohlke

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I was born just before the Great Depression. I learned our country's virtues in a one-room schoolhouse and it sickens me to see them trampled as they have been. My perceptions of "right" and "wrong" have been strong motivating forces in my life (more...)

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