Originally published by Seth Mason on ECOMINOES.com.
When I was young and naive, I believed that those who use the terms “crony capitalism” and “corporatism” must be anti-capitalists by default.
But I didn’t understand that Corporate America doesn’t play by the rules of free-market capitalism. I didn’t realize the degree to which Corporate America uses the federal government to crush competition from small business.
Obama’s latest “tax deal” is an excellent example of crony capitalist and corporatist subterfuge. Obama proposes lowering the corporate tax rate from 35% to 28% in exchange for raising the top individual rate to 40%. Here’s the thing about that: corporations have teams of tax accountants that crush down their federal tax liabilities to nearly zero (or less than zero in the case of GE and dozens of other corporate behemoths). Successful small business owners are often in the highest tax bracket, but corporate bigwigs often aren’t because they make the majority of their money from capital gains. In other words, Obama’s tax deal is smoke and mirrors: he proposes RAISING taxes on small business in exchange for sliding down a relatively-meaningless corporate tax rate. (“Look at me, I’m pro-capitalism!”)
By raising taxes on small businesses with his grand tax “bargain”, Obama would be fighting small business competition for his corporate masters, not making U.S. companies more competitive, as he claims he would be.
The Orwellian “Marketplace Fairness Act”–or Internet sales tax act–is another great recent example of crony capitalist and corporatist subterfuge. The act is being sold as leveling the playing field for mom-and-pop businesses. And that’s what it would do, right? WRONG! Many corporate behemoths with strong online sales support the Internet sales tax. Why? Because corporate behemoths can afford to pay a little more for online sales; small businesses with online sales can’t.
The federal government and the sitting U.S. president do their masters’ bidding by creating obstacles for small business. Calling them “crony capitalists” and “corporatists” isn’t anti-capitalist. But allowing them to continue to dismantle small business and the Main Street economy is.