As many of you may know I have long advocated the complete absolute outlawing of the practice of political lobbying. Some argue that the lobbyist is guaranteed a job as a part of free speech. The practice is nothing more than bribery. I find this appalling. And I'm confident you will will too after reading this.
Three University of Kansas professors completed a verifiable analysis of the American Jobs Creation Act of 2004. They studied rates of return for money spent on lobbying. Their data and findings were covered in an article by Dan Eggen in the Washington Post on April 12th . Here is a link to that story . What they discovered was that a cabal of predatory multinational corporations were getting a return of $220 for every 1$ they spent on lobbyists. On top of that they received a gift of a 100 million dollar tax break.
This "law" with a name that defines charlatanism, allowed these vulture capitalists who amassed profits overseas to inexpensively bring that money back into the States. The normal tax rate on such profits was 35 percent. But this repatriation of profits as it is referred to, allowed these predators to haul their money home, paying only 5.25 percent!This act of treason was a tax holiday was sought by big pharmaceutical and high-technology corporations simply because they didn't want to pay taxes. They concocted a scheme and were quite successful at pulling it off. According to Mr. Egan's article:
"The largest recipients of tax breaks were concentrated in the pharmaceutical and technology fields, including Pfizer, Merck, Hewlett Packard, Johnson & Johnson and IBM. Pfizer alone repatriated $37 billion, representing 70 percent of its revenue in 2004, the study found. The now-beleaguered financial industry also benefited from the provision, including Citigroup, J.P. Morgan Chase, Morgan Stanley and Merrill Lynch, all of which have since received tens of billions of dollars in federal bailout money."
In 2006, the Washington Post business columnist Allan Sloan wrote about Ford Motor Co.’s abuse of the laughably named act:
"It’s almost enough to make you laugh — bitterly, of course. Here was Ford Motor Co. announcing yesterday that it had cut 10,000 jobs last year and that it will cut up to 30,000 more. But shedding jobs at muscle-car acceleration rates didn’t stop Ford from pocketing hundreds of millions of dollars courtesy of the American Jobs Creation Act. … Hello? How can you simultaneously cut jobs and benefit from the American Jobs Creation Act? Welcome to the wonderful world of Washington nomenclature."
Mr. Sloan said that Ford saved $850 million in taxes, not the $250 million the company suggested in its press release.
So how do vulture capitalists that don’t believe in paying their appropriate share of taxes pull this off?
Mr. Eggen reported:
"The provision was championed in part by the Homeland Investment Coalition, a group of companies and trade associations that was formed to push for the repatriation holiday. The Pharmaceutical Research and Manufacturers of America (PhRMA), one of the disbanded coalition’s members, said in a statement Friday that “repatriation of profits provided a new source of investment for American companies.”“PhRMA supported the legislation four years ago as part of a broad business coalition because of the additional economic benefits the bill would provide,” senior vice president Ken Johnson said. “It meant jobs and skilled training for American workers, as well as a shot in the arm for local economies.”
Well heck, that doesn't sound so bad...
Creating jobs provided the political cover for members of Congress to sign on as a co-sponsors of the bill. But did the American Jobs Creation Act of 2004 actually lead to jobs being created?
Flat out no.
How about providing “a new source of investment for American companies”?
Your kidding right?
The profits were simply pocketed.
It was merely a handout to America's most profitable Vulture Capitalists.
And the supporters of this tax holiday tried to get yet another gift from U.S. citizens.
As reported reported in Mr. Eggen's article:
"… the Congressional Research Service and others have since found that many companies cut jobs in the wake of the tax break and that nearly all the money was used for stock buybacks or dividends. Supporters failed in a bid to include a similar tax break in this year’s stimulus legislation, and a Senate subcommittee has launched an investigation into how companies used their tax savings under the 2004 program."So the good news is they weren't successful at getting another round of freeloading at taxpayer expense included in the stimulus package.
How about those big Pharmaceuticals? Did they create any jobs with the profits they got a tax holiday from? Not according to the Associated Press.
Here is their chart showing employment at these firms 2 years after President Bush signed the Job Creation Act into law.
Look how merely one member of this corrupt coalition; the pharmaceutical industry "influenced" members of Congress to work on their behalf.
The Ways and Means Committee is the main tax writing committee of the House of Representatives. The 2004 sad excuse for a bill was primarily a creation of the House.
Former congressman Bill Thomas (R-Calif) served as chairman of the House Ways and Means Committee during the run-up to the bill’s passage.
He is listed as the prime House sponsor of the American Jobs Creation Act.
Surprise! Surprise! The pharmaceutical industry gave his campaign more than $407,000.
The bill had 40 sponsors. All but one were Republicans.
A review of the campaign contributions records of these 40 men and women collected by the Center for Responsive Politics showed that since 1998, the pharmaceutical industry gave their campaign committees $4.49 million. Of those 40 co-sponsors, 14 served on the Ways and Means Committee: They have received, since 1998, $2.5 million from Big Pharmaceuticals.
Recall that, thanks to the act’s tax break, Pfizer repatriated $37 billion.
That's some math lesson!
The lone Democrat who conspired to help with the looting was former Rep. Nancy L. Johnson, of Connecticut (where drug-maker Pfizer has a significant presence), received more than $692,000 from Big Pharma. She has since departed from office but...
Surprise! Surprise! She is now a senior public policy adviser (That means lobbyist) for Baker, Donelson, Bearman, Caldwell & Berkowitz and serves on the Pfizer U.S. Health Advisory Board.
The bill had no opposition in Congress.
The Senate voted 69-17 on the bill; The House, 207-16.
Their compliance and submission allowed an average rate of return of 22,000 percent for the corporations who lobbied for this bill, according to the Kansas professors.If $1 invested in lobbying earns a $220 return,
which is what the Kansas study has determined,
then the pharmaceutical industry has invested,
for the 41 sponsors and co-sponsors of the American Jobs Creation Act of 2004,
about $4.5 million. That’s a return of $990 million.
Isn't that an enticicing return for buying only 7 percent of the members of Congress?
Now this is only one case study on one bill.
Imagine every K street flim flam artist and every bill.
Outlaw this "pay for play" con.
Turn K Street into a parking lot.
Throw the participants in jail or deport them.
The devastation caused by predatory capitalism is becoming obvious to all but the most obtuse of Americans. This is not a criticism of private ownership, that is a good thing. It's the economic slavery created by a new elite capitalist class of criminal thugs that must go. How do we accomplish this?
To regain our Constitutional freedoms, we must establish and insure equitable economic principles. We can begin by implementing the Second Bill of Rights suggested by President Franklin D. Roosevelt in his State of the Union Address in January, 1944.
Roosevelt's remedy was to create an "economic bill of rights" which would guarantee:
- "The right to a useful and remunerative job"
- "The right to earn enough to provide adequate food and clothing and recreation"
- "The right of every family to a decent home"
- "The right to adequate medical care and opportunity to enjoy and achieve good health"
- "The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment"
- "The right to a good education"
Roosevelt stated these rights would guarantee American prosperity and security, and that America's place in the world depended upon how far these and similar rights were carried into practice. He was dead right.