GET BUSINESS OUT OF POLITICS!!

Author Tony DeMaio

I hear this refrain often. It is often accompanied by associated phrases like “There is too much money in politics.” “We need campaign finance reform.” “Big money talks—the little guy doesn’t stand a chance.” “Political campaigns should be funded by the government”. Similar phrases are bandied about and abound. Little thought is given to the disaster of the LAST attempt at “Campaign Finance Reform.” As a matter of fact, I suspect little thought is given to ANY implications of the statements. It appears to simply be more “sound bite” politics.

I cannot help but think of the story about the mother who came home from shopping to find her two boys fighting in the back yard. She separated them, and demanded to know, “Who started this?” Johnny said, “Billy did—HE HIT ME BACK!!”

Many years ago, the supreme court of the United States opined, in a case where a state was trying to tax the federal government (bank), “The power to tax is the power to destroy.” And did not allow the state to tax the federal government. (McCulloch vs. Maryland) Subsequently, in 1913, Congress (ab)used that (taxing) power to tax white phosphorous matches out of existence by the imposition of a tax that made them prohibitively expensive relative to sulfur matches.

Today, Congress has enacted many (mostly tax) laws pertaining to business—though in reality, those taxes are on the consumer. If you wish to “go into business”, be prepared to buy a “business license” (tax). If you are in the trades, be prepared to purchase a “permit” to do any work. Be prepared to pay a tax on the property you use (either through the rent/lease or directly). Be prepared to provide benefits mandated by various legislatures—e.g. health benefits and drug/alcohol programs. Be prepared to pay several taxes on your employees—Social Security, Medicare, unemployment, and disability. Be prepared to pay a minimum wage dictated by the state and/or federal governments. Be prepared to modify your building and activities to OSHA specifications. Be prepared to file many “disclosure” statements with a “filing fee”—and a large fine if you are late. (I was informed by one businessman that he had to hire an accountant to keep track of all the things he had to file. He more than paid for the accounting services in the fines he avoided.) Be prepared to have the government demand that you hire a certain number of employees from each ethnic group, sex, age, race, etc. Be prepared for various lawsuits for discrimination, safety hazards, dangerous products, etc.—many brought by the government. Be prepared to have the government determine that you must hire disabled persons—then modify your work place to accommodate them (e.g. elevators, ramps). Be prepared to modify your work place for the convenience of the public (e.g. restrooms that can accommodate the handicapped, handicapped parking spaces). Be prepared for your business to be assessed for various bond issues, though it has no power to vote (taxation without representation). Be prepared to pay an inventory tax on the goods you must keep in reserve. Be prepared to pay tax on the gas, electricity, and the phone. Be prepared to accommodate any endangered species that might be threatened. Be prepared to have the government mandate that you must hire only union employees. Be prepared for the government to tell you which company you may or may not buy or merge with. Be prepared for the government to tell you that certain salaries are not tax deductible. Be prepared for a “healthy” corporate income tax—both state and federal. Be prepared for sexual harassment suits. Be prepared for affirmative action suits. Be prepared for “wrongful termination” suits. Be prepared for the government to inspect your product and determine whether or not you may sell it; and/or how you must label it. Be prepared for the government to tell you that you must prepare your product in a certain way; then when it turns out to be harmful, the government will stand by and watch as you are sued by the public (MTBE). Be prepared to pay a “weights and measures” fee to check your equipment and make sure you are not cheating the public. (In some localities, this fee is paid FOUR TIMES—to the city, county, state, and federal governments.) If under “fair trade” laws, be prepared for the government to tell you how much you must charge for your product. Be prepared to recall any product if the government so mandates. Be prepared to have your garbage examined for “illegal contaminants”. (It is perfectly reasonable for the government to pour hundreds of thousands of gallons of oil on the ground to build a road; but it is illegal and an environmental disaster for an underground gas tank from a private gas station to leak one drop.) As a matter of fact, be prepared to be told the maximum amount of water your toilet can flush.

When business attempts to influence government to “get off their backs”, the left screams, “GET BUSINESS OUT OF POLITICS.” Folks, when you dance with the devil, you should look ahead to when the music stops. For some reason, you seem to believe you have a right (and perhaps a duty) to “regulate” and control business. When business attempts to defend itself, you scream “no fair”. Business is trying to survive. They are trying to protect themselves from government meddling. One need only look at what happened to Bill Gates and MicroSoft when THEY attempted to “Stay out of politics.” They ended up in a fight for their life—probably because they did not contribute anything to the various political parties. They learned quickly, and now give generously to BOTH parties. One need only look at Tyson Foods to know how a business can use a “co-operative” federal government to stifle or even destroy competition. The coal business in Utah is great—for the Riati family.

This tirade was brought to you by the following news announcement:

“Financial News

“Merck Announces Second-Quarter 2005 Earnings Per Share (EPS) of 33 Cents; Excluding Net Tax Charge Primarily Related to American Jobs Creation Act (AJCA), EPS were 62 Cents”

Please note that fully over HALF THE PROFIT OF THIS COMPANY WAS “EATEN” BY A SINGLE LAW. That does NOT consider all the OTHER taxes and regulations. (Do you still wonder why drugs are so expensive? Do you really think it is “corporate greed”? Do you think it might be “government greed”?) Not only THAT, but the dividends distributed to the shareholders will ALSO BE TAXED. I note that today, Merck is selling for $31.35. A quarterly dividend of 33 cents would be a whopping return of about 1%. Over 4 quarters, that would be 4%. I also note that the 10 year treasury bill is yielding 4.22%; there is no associated risk with a treasury bill. Such are the “obscene profits” of the drug companies. They would be better off buying treasuries than running their business.

It’s not “bad enough” that you are taxing companies out of existence, but you are sufficiently cowardly to want to disarm them while you do it. If you want to “Get business out of politics,” I suggest you first “GET POLITICS OUT OF BUSINESS!”

This entry was posted on Sunday, February 7th, 2010 at 11:24 pm and is filed under Authors, Economics, Opinion, Tony Demaio. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.