ELDER PATRIOT – Hillary Clinton has cobbled together a rather incongruous coalition of support. She has the overwhelming support of Wall Street, Hedge Fund CEO’s, Corporate Chieftains, the international banking community, and the leaders of foreign governments.
She is also strongly supported by illegal immigrants and those who sympathize with them, as well as welfare recipients and members of the public service unions.
At first glance it seems rather odd that these groups would coalesce around the same candidate. After all, they have only one thing in common. They all feed from the government trough that, over the years, has been filled from the tax dollars of the middle class.
Under the policies of her husband (NAFTA,) George Bush (greatly expanded growth of international trade and the dislocation of jobs to the Pacific rim,) and Barack Obama (corporate inversions, vastly increased illegal immigration, and unlawful use of the H-1B visa program,) employment opportunities for the middle class in our country has shrunk.
As the middle class has shrunk in size it has created an abundance of qualified workers without jobs. This has resulted in a downward squeeze on wages leaving us with fewer workers earning less money.
It doesn’t take an economist to understand that continuing to increase the tax burden on a shrinking base of workers who themselves are earning less money is an unsustainable financial model.
Yet, this is exactly the model Hillary Clinton is campaigning on.
Mrs. Clinton is promising to raise taxes on those earning over $250,000 to fund the programs she’s proposing. That was the same claim that Barack Obama campaigned on but as always happens, the middle class shouldered the brunt of his profligate spending. We now have the lowest labor participation rate since the great depression and an additional $10 trillion in debt burdening our children’s futures.
The fact is politicians do not create jobs, they can only structure tax policy to incentivize economic investment by taxpayers with the hope that new businesses will be formed, and existing businesses will be updated and expanded, and that this will result in new jobs. Of course, ever greedy bureaucrats also crave the increased tax revenues that they can use to expand their business, the business of political control over government revenue.
They claim to create jobs through two mechanisms. The first is investment of federal funds directly to corporations. This rarely creates new jobs for American workers, however, because the money is virtually always directed in the form of government contracts to the largest corporations that already have the economies of scale necessary to absorb the new business. This helps the corporation and the stock market but does little to nothing to improve things for workers in the United States.
Direct funding of corporations also benefits the political class when politicians agree to accept large contributions to their campaigns from those corporations. This group, large corporations and international banks, overwhelmingly support Mrs. Clinton and are the financial engine of her campaign.
We have become so numb to this immorality that Mrs. Clinton has even been brash enough to openly solicit such contributions before agreeing to give her approval to any transactions.
The second manner that the politicians claim to create jobs is to offer private sector investors exemption from paying taxes on any earnings on the amount they invest or, on the amount they lose if an investment fails. The tax write-offs for real estate are especially appealing.
Naturally the incentive to invest in economic expansion and, in the process avoid paying taxes, is greatest among those in the highest tax brackets. This is because those who earn less use their money, every dollar of which is taxed, to pay for life’s necessities.
Conversely, the rich have far more income than they need to live on and rather than pay onerous sums in tax required of those in higher tax brackets, they elect to reinvest it. The more they invest the greater the tax savings. It’s the reason why the “rich” who consistently reinvest in America will never pay their “fair share” of taxes.
Donald Trump has taken advantage of these incentives to grow the Trump Organization to the point where he has directly created more than 23,000 jobs. CNN/Money calculates that number grows to 34,000 when including the jobs created in neighboring businesses due to increased economic vitality.
Trump’s taxes makes for damaging political fodder but it ignores the fact that a person like Donald Trump, who has the temerity to challenge the establishment quo that both political parties have created only for their advantage, directly created 23,000 new taxpayers and another 11,000 indirectly due the increased economic vitality he brought to the larger economy.
While Trump may or may not have paid his “fair share” of taxes there can be no denying that his efforts created 34,000 new consumers and new taxpayers who will pay far in excess of any tax break that has benefitted Trump.
It is disingenuous for Barack Obama, Hillary Clinton or any other politician to claim they created jobs. The best they can do is to create tax policy that encourages investment.
It is entirely deceitful for them to criticize the investor whose vision, tenacity and penchant for risk allowed for any amount of job creation when those same politicians never put a penny of their own money at risk.
It is similarly hypocritical to condemn an investor for going bankrupt in the attempt, or for taking advantage of the loss-carry forward provision in the IRS code since that can only be utilized in any significant manner for another “like kind” investment. That means that Mr. Trump or any other investor has to make a similar additional investment elsewhere to benefit more than $3,000 per year on his taxes. That makes Trump a serial investor. Is that now a bad thing?
Remember, it is these same politicians that have created $20 trillion in debt for which they’ll never be held accountable.
Mrs. Clinton’s attack on Donald Trump for not paying his fair of taxes is not only disingenuous it suggests the very tax strategy that stands to benefit the poorest among us, and that she wants to expand, is somehow immoral.
The sad reality is that the largest portion of Mrs. Clinton’s support is coming from the same people who have been disenfranchised by the establishment and its favored treatment of super rich – hedge fund managers, mega corporations, international banks – and that has turned them into a permanent underclass.
Mrs. Clinton has lauded President Obama’s handling of the economy and said her only concern if she were to become president is to lessen the income gap between the rich and poor.
It strains credulity that Mrs. Clinton can, or wants to, serve both of these groups equally.
It’s equally sad that those immigrants and native-born poor will be voting for policies that will block their path to ever joining the middle class.
The vast majority of her supporters are the ones suffering the most as a result of the policies that so greatly benefitted the super rich. Yet, now they are rooting for the candidate that, it is proven, has been bought and paid for by them. This is the very definition of Lenin’s “Useful Idiot.”