Lowe’s, Ticonderoga, and the era of Fly By Night Capitalism
The Lowe’s corporation decided a week ago to suddenly can their workers, strip their much-ballyhooed sign, and flee Ticonderoga practically in the dead of night.
This cut-and-run, fly-by-night approach to American capitalism has been stewing uncomfortably in my mind in the days since.
It has mixed painfully with the latest economic news, which confirms that American companies are “hoarding” more than $2 trillion in cash while they wait to see whether we plunge into another recession.
By keeping their money out of the economy, it turns out, business leaders have literally erased the value of the Federal stimulus effort, where taxpayers tried to prime the national pump through huge levels of spending.
This isn’t the Great Depression, when nobody had any money to invest. And it’s not the 1970s, when regulations and taxes were at onerous levels.
Many of these corporations are posting record profits, and their executives are far, far wealthier than ever before in American history.
So how does all this connect with Lowe’s and the decision to quit Ticonderoga?
When the company closed down last week, a spokeswoman told the Plattsburgh Press-Republican that they couldn’t see “a scenario that led to profitability for the store.”
What that means is that the company — like so many American corporations these days — isn’t willing to make the investment needed to build a market, build profitability and grow prosperity.
And they are also unwilling to do the decent thing that neighbors do in hard times: stick.
Consider this. The company opened the Ticonderoga store just two year ago. Two years!
During Lowe’s brief adventure in carpet-baggery, the region suffered the devastating impact of a national recession, and the closure of the Lake Champlain bridge, which cut off the flow of Vermont shoppers while crimping the buying power of New Yorkers in the region.
We also endured historic floods this spring that literally shut down the region to visitors and dragged the economy in the Champlain Valley to a halt for more than a month.
Consider also that Ticonderoga is one of the most undervalued communities in the region.
The town has a stable timber products industry, is poised between two fabulous recreational lakes, is home to one of the nation’s greatest historic monuments, has great schools and neighborhoods, and is positioned at a crossroads between New York state and Vermont.
This is a town that has a future, with the right vision and the right investment.
But while most of the the region’s businesses were partnering, getting creative, working with government officials, struggling to keep their doors open and their mood upbeat, Lowes — with $3 billion of cash in reserves — was quietly preparing to pull the plug.
It is painfully ironic to read Lowe’s corporate motto: “Let’s build something together.”
Right.
Shameful as this is on a local scale, my big fear is that the same thing is happening nationally.
Corporations are perfectly happy to move into areas where the economy is already strong, where consumer demand is already present, where someone else has done the hard work of building prosperity.
If the government manages somehow to revive the economy, or if the good times roar back to life magically, then you can be sure the board room pocket books will fly open.
But what about the old idea of businesses putting up their own capital to invest and build? What about spending time and taking risks to help a community and a market grow?
The idea that profits should grow not from Wall Street schemes, but from thousands of healthy towns and bustling cities and from millions of productive workers? The idea of sticking during a crisis?
In modern American corporate capitalism, one has to ask whether those values are as dead as the gold standard. Or as dead as the jobs of those 86 people in Ticonderoga, whose livelihoods vanished in the middle of the night.
Well – obviously their first and only priority is making money. Sticking during a crisis is the same thinking. They said they couldn’t see a path to profitability, so they left. Big box stores in rural America are a two-edged sword. Convenient, cheaper, and more available stuff, but they can pack up and go leaving a wasteland. The jobs are a red herring. Those people were working somewhere else before Lowes and probably at a place that Lowes drove out of business. Somebody somewhere will now need more employees.
How many people lost their jobs in Jay, Ticonderoga, and Port Henry because this store sapped their local business over the past several years? Those who opposed this store as strip development blight out of character with the rest of the community and a drain on local economies were right. Who will move into this 440-car parking lot and empty 150,000 square foot big box?
Lowe’s should have renovated a building downtown – which, in addition to adding to the community, would have demonstrated their commitment to the community they have now defaced.
John McHugh, Ticonderoga Town Supervisor Robert C. Dedrick, Betty Little, and Teresa Sayward are among those responsible for this debacle.
Brian, you reported when local politicians used the Lowe’s project to batter the APA for “crippling economic growth” in a story that did not include Lowes opponents (http://bit.ly/ngSIyj).
Perhaps if the local media had a more balanced approach to the Lowes issues when they were first raised, things might have turned out differently.
NCPR should now be holding those elected officials accountable by asking why they pushed for such risky development without concern for the locally owned businesses and historic character of Ticonderoga – and most importantly, what are their plans for this blighted area now?
Corporate capitalism focusses too much on short-term results. Decisions made are amoral (and sometimes immoral). CEO, Board and stock shareholders’ interests are paramount with little regard for the impact on local communities. Just the way it is, and part of the risk communities take in seeking these kinds of businesses.
Oh the other hand, I assume any remaining local lumber yards and hardware stores must be tickled to hear that Lowes is closing.
Big plans and big ideas always come from outside the community, and almost always step on toes, slander the locals, ignore the environment…and almost always fail.
In Potsdam, we too have a new and underutilised Lowes. Should the employees there get their resume’s out? How about all those folks at the much contested Wal Mart? That parking lot’s never been full. Will these type of places come into our communities just long enough to trouble the rest of the business community, and then pack up and leave?
I don’t know anybody named Lowe…or Walmart, Walton or McDonald for that matter. Those folks have never been a part of this community, and never will be. I do know folks named Evans, White, Merriman, Bicknell, Vanness, Snell, Blanchard,Sergi, Hazen, and the rest. You see these people at concerts games and meetings all the time. They are our real community and I’ll be doing business with them in the future, just as in the past
John Warren is correct. Many people were predicting the effects of these big box stores on Ticonderoga and the surrounding local economy and the fact that these businesses might be short-lived. These predictions were based on evidence provided by previous experience. The predictions were ignored.
That’s the problem with chains and other big corporations. They certainly have their upside, but one big downside: easy come, easy go. But as mentioned above, even after they go, they do not leave the rest of the local economy unscathed.
It’s worth adding that Red Fox books in Glens Falls, which also recently closed, stuck with it for five years before reluctantly throwing in the towel.
What is the answer though? Corporations are actually acting immorally if they do not maximize profits for the people that own them. As an owner you assume when you buy the stock that they are not going to go on some sort of self help crusade for a small town, but make decisions to optimize the profits. They are not social service organizations they exist to generate profits for their owners. I personally think that in the long run you in fact generate more profits by having a longer term approach which Lowes does not seem to have at all.
I think we should always know what and who we are dealing with as community members when we deal with corporations. Which to me means you do not allow them tax breaks, that you as a community assume that they may leave in a year and how that would impact the community and what concessions you would demand from the corporation in that case.
Hey, welcome to the Bandwagon, Brian M.
It is worth noting that Adam Smith, himself(!), warns of unrestrained capitalism.
There is an interesting analogy to the era of resource extraction (this is from a professor named Gordon who I can’t find the reference to at the moment) when increased transportation allowed resources to be extracted in one location and to be processed dozens or even hundreds of miles away. The people who worked at the source of the extraction were the least well paid and they were forced to live with the environmental destruction and eventual loss of work when the forests were denuded and wildlife disappeared, streams were fouled etc; or mines were played out and poisons ran down hillsides.
The few who profited most from the environmental degradation could live virtually anywhere they wanted and bought vacation homes all around the country.
Before massive scale resource extraction became feasible the owners and the people who worked for them for the most part lived in the same communities and in the same environment, so there was incentive to do the right thing.
That Revolution in Industry led from having (for example) timber, iron, farming, leather, tanning, and textile businesses initially all around the country to massive centers of production — like Pittsburg for steel — and finally to the closing of diverse industries like Republic Steel, and Native Textiles, and dozens of paper mills all around the North Country and to the opening of sweatshops in China and now Viet Nam, and Pakistan.
The Revolution in Finance is doing the same thing, again. It is time to strip power from Wall Street and put it back in the hands of people. Your IRA is the snare they trapped you with.
The history of large corporations is long and said. Look at what happened to Detroit. Look at what has happened to Buffalo and Rochester.
The true power of a place like New York City is and has been in the many small independent stores.
Where does the lion sleep? Anywhere the lion wants to sleep. When you decide to sleep with the lion, you take a risk.
Mervel, you have bought into the idea that the main purpose of business is to maximize return to shareholders. That is a very small vision of what a corporation’s obligations are.
If, as Mitt Romney and many others insist, corporations are people, then it follows that corporations MUST have other obligations — just as people do.
People have legal, ethical and moral obligations to their country and to local governments, obligations to family, to community, to churches, to other people. Business must start to accept greater responsibility to its workers, to communities and to the Nation as a whole that makes businesses success possible.
“In modern American corporate capitalism, one has to ask whether those values are as dead as the gold standard.”
Brian, I think that was asked and answered a long time ago.
Wal-Mart has made three attempts over 12 or 14 years to build in the Lake Placid/Saranac Lake area and the reasons as to why W-M/Lowe’s/pick-your-favorite-big-box is a bad “investment” in these small communities is shown perfectly with what just happened with Lowe’s in Ticonderoga – it is a text-book example. So, this neither shocked nor surprised me.
I had been involved with the effort to try to make W/M take on a reasonable responsibility if they were to locate in Saranac Lake (and am either vilified or praised depending on where you come down on the impact these corporate behemoths have on small communities) But their corporate representatives showed no interest in working with the community, although they did put out a lot of rather transparent propaganda about how they would improve our town, usually by quoting the same tired talking points that we disproved over and over again, using the exact evidence that PNElba mentions above. Somehow, those corporate reps just never got it but some community residents believe their corporate rhetoric and that these stores are just the economic silver bullet that is needed.
We (Saranac Lake) have dodged that bullet so far and the Ticonderoga Lowe’s perfectly reinforces what happens to small communities that welcome these big boxes in all their corporate glory.
As was mentioned an an earlier comment, some of our elected representatives became very involved (with some rhetoric bordering on vitriolic) in the great sign debate (like Lowe’s needed the oversized sign they were insisting on – nobody would have had any trouble finding that store with something as small as a 2’x4′ sandwich board out front) and insisting how this Lowe’s was paramount to improving the Ticonderoga economy. I guess all that evidence wasn’t good enough. We have one local elected official in the Saranac Lake area that just has this “gut feeling” that we shouldn’t have a size cap for these big box retailers. This official does not have a background in retail development but apparently all that evidence doesn’t weigh in as substantively as the “gut feelings”. These politicians need to be very careful with their rhetoric (and need to do their homework first!!) as the economic impacts on our small communities is significant and in today’s economy can make or break a town.
And all this said without even touching on the issue of where all these cheap big box store goods come from – that’s another discussion.
Knuck, Mervel is right that corporations are obliged to maximize return for their shareholders, and that really isn’t a bad thing if a long time frame is used. The trouble is that CEOs have compensation packages that reward short term performance, and of course they’ve also got those dandy golden parachutes. The compensation packages are, of course, set up by those very same CEOs and approved by boards that are made up of other CEOs. These cozy arrangements are not at all good for shareholders in the long term, but they have led directly to the creation of an uber-wealthy class that funds much of the far right politics of today.
Did anyone notice that the Republicans are in favor of raising payroll taxes on workers? There’s a reason that our economic inequality is reaching banana republic levels.
Knuckle,
Those other reasons if they are not in the long run associated with maximizing the value of the corporation do not make any sense. Of course corporations and business in general, small and large must follow the civil rules of our society. Society (government) has a duty to protect the liberty and rights of individuals in the community and to enforce the law. Romney is essentially correct. Companies produce revenue those revenues go to suppliers (people), employees as wages (people), the owners of the company in profits (people).
But the other side is also true, I don’t think government should be involved in encouraging through the use of our tax dollars businesses or giving them zoning breaks or not enforcing pollution controls etc. In particular in the Adirondacks I think special consideration can and should be given to all large businesses that may be allowed.
But I just don’t think we can think of any corporation or business as secure in today’s world.
Observation-
all the lumber Lowes sells/sold i never saw one piece of it stamped from the Adirondacks. Even Ward Lumber sold me studs the other day grade stamped from Czech Republic. Buy local should not only apply to our food, or individuals, for that matter.
Next time there is a big debate,Political hoopla, and yes some of those darn Zoning issues about letting a big box store open in the neighborhood, i hope we all know the answer now.
Lions don’t eat cabbages, and i’ve never seen one lie down with a lamb.
Knuck, Romney was playing a cruel joke with legal words. If corporations were truly people, when they broke the law all in management, the board of directors and the stock holders would go to jail.
By the way, I wish I had all of the tax breaks these so called people, the corporations, get. Just imagine being able to deduct every dollar you spend as a deduction.
Corporation’s obligation to share holders, to turn a profit, is a hook and primarily self serving to the corporation, but go ahead and take a nibble…
Of course its self serving to the corporation’s owners. The point of a corporation is to be self serving for those who own it. It is simply one legal method of organizing a business. If you want to raise money you sell parts of your business to people who now own a part of the business, that is all it is. I do think there are problems with it I think that could be changed and pete brings up a good one about the corporate veil.
I just think we need to vastly lower our expectations or idealizations of what a corporation should do or its responsibilities. Which goes back to giving them special breaks for things, they don’t deserve any special breaks for locating somewhere unless you are going to give every business the same special break.
Maximizing shareholder value and, as Walker points out, maximizing short -term profits are two very different objectives.
One of the advantages for a corporation to be considered a person is that the corporation can go on essentially forever while any ordinary flesh and blood person has a limited span of years, and resources. That means a corporation can fix a game in a way that defeats any ordinary person.
Finance and economics are not the laws of Physics. People can define what the objectives of corporations should be. People can decide that there must be some limit to the amount of interest a business can charge, or whether short-selling stock can be legal, or how much cash a corporation may hold without returning it to investors or using it to purchase back stock, buy equipment, etc.
The problem is that corporations have been defined as people — legally. Not in the sleazy way Mitt tried to worm out of the truth. And as people with free speech (defined by the Supreme Court as Money) they hold greater sway over our elected officials and even professional economists who get to define what the objective of business is, because corporations have much more money than, just for example, I do.
If I had a billion dollars and a hundred years I could start a school of economics that would radically re-define the objectives of a corporation. Maybe I would define that the primary objective of a Corporation would be to provide goods and/or services. Maybe one of the objectives that I defined would be that employees of any business with stock MUST be provided shares of the corporation as part of their compensation package. As shareholders employees MUST have a seat on the Board of the Corporation and have a say on executive compensation.
John Warren –
I reported the Lowe’s/APA story carefully in 2006, interviewing voices across the political spectrum, while also attending the public forum where all sides of the debate were encouraged to speak.
I found no one who spoke out as “Lowe’s opponents.” Not a single person, not a single group.
Your suggestion that we ignored or downplayed the voices of opponents is simply and factually wrong.
In cases where opposition to big box development has formed in the North Country, NCPR has indeed included all sides of the debate.
You will find more than a dozen stories on the subject on NCPR’s website, dealing with debates from Canton and Potsdam to Saranac Lake and Lake Placid, as well as in-depth coverage of debates over retail store size caps.
–Brian, NCPR
It would be nice if the pro-big-box anti-master plan advocates took the Lowes closing as a lesson in what can easily happen, but….
I would say that the laws of supply and demand are indeed as reliable as physical laws. If you want to cap interest rates for example all that will happen is fewer loans will be given and people will be made worse off. Price controls don’t work and never have, you cannot countermand some of the basic laws of economics and have good results. For example if you penalize companies for closing they will just open fewer stores and take fewer risks. It’s one of the reasons that socialism has failed. We can’t control the actions of others and get good results. If Lowes wants to be short sighted and close that is their right, however we should know that in the future when and if large companies ask for big breaks. Things like giant real estate ski developments for example.
“By keeping their money out of the economy, it turns out, business leaders have literally erased the value of the Federal stimulus effort, where taxpayers tried to prime the national pump through huge levels of spending.”
Brian’s statement makes no sense.
The fact that business are hoarding cash is a result of Obama’s desire to tax everything that moves. They will invest it when the tax policy changes, don’t you worry.
The taxpayers didn’t direct the stimulus money anywhere.
Where do you think it went, Brian? Unions and government pensions, mostly, and all under the Obama administration’s direction, not the taxpayers.
Most of the stimulus money never saw the light of day. No big surprise there.
JDM, you never cease to amaze with statements that bear no relationship to facts or reality.
“The fact that business are hoarding cash is a result of Obama’s desire to tax everything that moves.”
“Where do you think it went, Brian? Unions and government pensions, mostly, and all under the Obama administration’s direction, not the taxpayers.”
These are big statements in need of documentation for accuracy.
If the laws of supply and demand are so reliable, explain the price of gasoline in terms of supply and demand.
“I would say that the laws of supply and demand are indeed as reliable as physical laws.”
Mervel, with all respect, this is faith-based. Plenty of examples of dirigiste economies where government purposely alters price, supply or demand to serve particular interests. Look no further than our own ag subsidies, which artificially and IMO immorally squeeze out third-world ag producers. We should be getting a lot of our produce from Africa. They can produce it more cheaply, after all. But we don’t allow their imports, while flooding their market with govt-supported grains, killing their ag industry. Everyone has an industrial policy that cheats your “law,” and many of them, eg Germany with its protection of its midsized manufacturers, win. The US has an industrial policy. We rarely admit it, though. Like lots of things, it’s a societal choice.
“The fact that business are hoarding cash is a result of Obama’s desire to tax everything that moves. They will invest it when the tax policy changes, don’t you worry.”
Obama has, with a few small exceptions, consistently lowered taxes: http://www.nytimes.com/2010/10/19/us/politics/19taxes.html
http://voices.washingtonpost.com/ezra-klein/2011/02/the_obama_administration_has_r.html
The problem is deeper than big box corporate capitalism. The problem is that we have an economic system which requires continual growth in a finite world. Although many pretend otherwise, we are as a species approaching the limits of sustainability in terms of the environment and the consumerism demanded to drive our economy is speeding up the reaching of that limit beyond the increases in our shear numbers. At some point we have to control both our numbers and our consumption or face catastrophe. “We have met the enemy and he is us”.
But they don’t cheat the laws of supply and demand; you make the point above. Government can indeed set a law which mandates a particular price, I didn’t mean that you could not do that, but what those price controls do is simply restrict supply causing unintended consequences the natural price will be found given the restrictive circumstances imposed. Ag subsidies cause many problems they distort the market I totally agree. That is what I mean by not being able to cheat the law of supply and demand.
If you look at countries which go overboard in trying to control market forces you find they fail and indeed hurt the economy. If price controls worked we would just set prices and tell everyone to go to work. If the economy could successfully be controlled by fiat of the government we would certainly do that but that plan has been tried and it has failed over and over again. Look at the housing crisis, none of those garbage mortgages could have been made, bundled and sold without the US government through Freddi Mac and Sallie Mae. No one would have made those loans or bought those loans without the US government backing them up. Look at Nixon’s failed wage and price controls. The list goes on and on.
The best thing to do is not let government get in the back pockets of all of these corporations and use the power of government for private gain. That means no tax breaks, no zoning breaks, no subsidies for these corporations.
“‘By keeping their money out of the economy, it turns out, business leaders have literally erased the value of the Federal stimulus effort, where taxpayers tried to prime the national pump through huge levels of spending.”
Yes. a failed effort. Some have trouble swallowing that pill.
Small and large businesses go belly up in an economy like this. We see a bigger effect with a larger one.
“There are plenty of explanations as to why many taxpayers did not feel richer when the cuts kicked in, giving typical families an extra $65 a month. Some people were making less money to begin with, as businesses cut back. Others saw their take-home pay shrink as the amounts deducted for health insurance rose.
And taxpayers in more than 30 states saw their state taxes rise, according to the Center on Budget and Policy Priorities.
That is what happened here in North Carolina. The Treasury Department estimated that the federal tax cut would put $1.7 billion back in the hands of North Carolina taxpayers this year. Last year, though, North Carolina, facing a large budget shortfall, raised a variety of state taxes by roughly a billion dollars.”
oa, thanks for the link. Too little is the problem here. Reagan did 25% across the board that had a positive, effect nothing here. Live and learn!
myown and oa are already on the case, but fully one-third of the stimulus consisted of tax cuts. so to say, as jdm does, that stimulus money didn’t go to taxpayers is tautologically nonsense. a mistake like that tells you right away how much credibility to pay to everything else in his comment: zero. he has no idea what he’s talking about.
Lowest tax burden since 1958.
Repeat.
Lowest tax burden since 1958.
JDM, you should probably write that on a post note and stick it your monitor. That way you can read it before posting comments about taxes. Would save us all some time in responding to you.
The manner of the closure was a bit crass. Lacking respect for what the locals did to help. It was as you describe under cover of night.
Replace the sign with the title “Lowes Folly?” The building would make a great recreational facility- running track, soccer practice, store a few boats (oops- competes with existing storage), new hospital facility, move the whole village shopping district inside- yea might hurt those owning those properties.
A point for Ward, they don’t sell only the local white pine that they saw. People pay a premium for what is visible not what is hidden like studs.
How about this: reqiore a bond from the business we bend over to bring in that provides for compensation we don’t get a reasonable amount of our expectations met. It might provide compensation for unemployment, deferred taxes and retraining of workers. A bit like a pre-nuptial agreement.
Scene: The Barroom
“So she dumped you huh?
“Yea”
“How long were you together”
“Two Years”
“Mmm”
” She left in the middle of the night, just told those she needed to but not me and left”
“Well”
“Didn’t even leave what I gave her”
“What was that?”
“Her sign for the mailbox?”
“Oh”
” I thought I had learned”
“How”
” When it happened before”
“Before?”
“There have been others, in other places”
“Really?”
“Sort of the same story, meet them, get used to them, give them gifts of affection, even move in together. But after a bit they don’t like my income.”
“What’s your plan?”
“Move back to my hometown?”
“What’ll that do for you?”
“They are used to my income. They don’t mind a little rust on the pickup.”
“Any prospects?”
“A girl up the street from my folks. We used to get along together. Built a playhouse in the woods of a vacant lot. Maybe we can build something else together”
” I hope it works out for you”
“Thanks”
http://www.recovery.gov/Transparency/fundingoverview/Pages/fundingbreakdown.aspx
Here ya go myown. Read it and weep!
Brian Mann,
You may have interviewed voices across the political spectrum, but you didn’t interview voices from across the spectrum of supporting or opposing big box development in the Lowes case – if you did, please, point us to the story.
You found no one who spoke out as Lowe’s opponents? Did you try a Google search? How about asking folks in Saranac who opposed the Wal-Mart there? Certainly you reported what Lowe’s had to say, they were from outside the area, why not ask one of the MILLIONS of people who oppose similar development – people like James Kunstler in Saratoga – I’m sure he would have had something to say.
And you have ignored my main point – will you revisit those politicians who were vocal opponents of any development restrictions in this case and ask the tough questions?
And BTW, the next time you have trouble finding an opponent of some outrageous and incompetent development idea, just let me know.
hermit thrush says this: “so to say, as jdm does, that stimulus money didn’t go to taxpayers is tautologically nonsense”
JDM said this: “the Obama administration’s direction, not the taxpayers.”
I didn’t say the money didn’t go to the taxpayers, hermit. I said that the taxpayers did not direct how the money was spent.
I was referring to Brian’s statement which implied the taxpayers did direct how the money was spent, which I consider not true.
I
Dave: “Lowest tax burden since 1958.”
Shazzam!
I thought my taxes were too high. Now I know that I have the lowest tax burden since 1958.
Well, Gooollllllyyy!
I can’t wait to pay higher taxes, now that I know we have the lowest tax burden since 1958.
“If you look at countries which go overboard in trying to control market forces…”
Mervel, you said the magic words: “Go overboard.” But there are things governments (and corporations, esp. in the 1890s and lately) can do to control market forces, and they do them regularly. And they often succeed (eg China, Singapore, Korea, Germany…), often with socialistic policies. Market economics definitely are a “force,” but they’re not immutable, like thermodynamics. And letting the market go completely free also has unintended (or maybe they’re intended) consequences, like monopolies and starving old people.
It’s now clear from your responses that you’re not against any government activity in the economy. And we basically agree, though perhaps not on what constitutes the proper degree of govt activity. Always good sparring with you.
“Lowest tax burden since 1958.”
Dave, that is a small part of the “tax burden”. What about sales tax, what about state income tax, what about property tax, what about county tax, what about town tax, what about all the taxes that have been changed into fees. Fees to register a car, fees to register a business, fees to keep a business running…….
I assume that all of these have gone down or are fewer since 1958?
“Perhaps if the local media had a more balanced approach to the Lowes issues when they were first raised, things might have turned out differently.”
It is the local media’s fault that a store went out of business? Good idea, we have a new scapegoat. The APA will be relieved.
oa,
Oh yes we have to government, in fact good government is a tremendous blessing. To know that if I call the police I don’t have to pay them a bribe to show up or that I basically can be assured that vulnerable people with no one to help them are not going to starve or die and can have some dignity. We need that safety net. In these cases I am more worried about large corporations having the resources and power to influence government and to get special consideration from government then I am about their decisions in the market place.
“Dave, that is a small part of the “tax burden”. What about sales tax, what about state income tax, what about property tax, what about county tax, what about town tax, what about all the taxes that have been changed into fees. Fees to register a car, fees to register a business, fees to keep a business running…….
I assume that all of these have gone down or are fewer since 1958?”
Yes, that is a correct assumption.
We have the lowest total tax burden since the 50s – that includes federal, state, and local.
You don’t pay taxes when you are out of work or poor. We have more out of work people today and more poor people today thus a smaller total tax burden. The actual tax rates however are higher than in 1958.
Dave, yes and no. Some of what I list has gone down and some has gone up. Do you feel that tax rates should be higher, or do you think that we should keep the rates where they are (or lower them) and try and collect more taxes?
Brian Mann or anyone else. Deos anyone know whether or not Lowes received any tax breaks from Ti for doing them the great favor of locating the store there? The big box stores usually come in to an area and beat up the local taxing entities to get huge breaks on the promise of creating jobs. In this case and any others if they were granted tax breaks(esp property and school) they should be required to repay them in full. They should also be required to pay any infrastructure costs a municipality incurs to get services to the store, and actually pay them up front. Just my humble opinion.
Paul, some specific taxes might have gone up, some specific taxes might have gone down…
But what is not up for debate is the fact that our total tax burden – that includes Federal, State, and Local combined… in other words, the total taxes we pay overall – is the lowest it has been since 1958.
I think it is high time we begin to insist that public debate about these important issues be grounded in fact.
It is kind of an interesting argument though. What is more important, tax rates or tax revenue or total tax burden? They are all different.
For me I believe we need more tax revenue. How we get more tax revenue could be any number of ways. I mean it may make us feel good to have the highest corporate tax rates in the industrialized world, but it does not help us with tax revenue from corporations.
I also agree with rich above. I think when we give breaks and build infrastructure for corporations we need explicit assurances from those corporations about the future.
JDM, maybe you should go to your link, read it this time and weep. About a third of the money paid out went to individuals through various tax credits. They then turned around and spent this money. And from the graphs you were nice enough to supply a link for we can see that 10’s if not 100’s of billions of dollars in stimulus money made it into individuals’ pay checks that they undoubtedly spent a large percentage of.
This is where Brian’s point comes into play, the buck stopped there. Rather than make investments in new capital with this money, corporations are choosing to sit on it. They know they can continue to sit on it until the government comes around with a favorable tax deal. They are basically blackmailing the American people simply because they do not want to pay anything approaching their fair share of taxes.