the corporate income tax
ERNEST F. HOLLINGS, former U. S. senator
2010 -- A hue and cry erupts in Washington over the State Legislature
and Governor of Arizona adopting an immigration law. At least Arizona
acted. We can't get Washington to act. There are now twelve to fourteen
million illegal immigrants in the United States. They didn't come over
the border last night. They've been streaming over the Mexican border
and Arizona's border for years because Congress passes half measures and
even half measures are not enforced. The cry ought to be against Washington's
failure to act on immigration rather than whining about racial profiling.
Now there's a hue and cry about the Majority Leader, Harry Reid, calling
up immigration for consideration. Mexico is in crisis. Before a country
can have free trade it must have a free market. The European Union forbids
entry to the Union until the country has developed a free market. The
European Union taxed themselves $5 billion over five years to develop
an open market in Greece and Portugal before admitting these countries
into the European Union. Instead of NAFTA, that's what we should have
done with Mexico. Now Mexico is a basket case. Mexico has an emigration
problem, drug problem, a jobs problem, trade problem, and a crime problem
so severe as to cause the Mayor of Juarez to live in El Paso. With all
these problems, Mexico needs a Marshall Plan to develop an open market
with labor rights and assistance to solve the drug, crime, jobs, and emigration
problems in Mexico. This would help solve the jobs, immigration, drug
and crime problems in the United States. We don't have Canadians streaming
over the border into the United States, and we need a free market in Mexico
We have the hue and cry over an unnecessary war in Afghanistan. President
George W. Bush found the Afghan War necessary for his re-election. And
President Obama follows suit. We're trying to force feed freedom and democracy
in a country where the Afghans favor tribe and religion. You can't force
feed a culture change. The surge of bribery apparently worked in Iraq,
but after eight years the surge of bribery in Afghanistan is creating
as much terrorism as it's eliminating, and we'll still end up with warlords
growing poppies, selling their daughters, and a corrupt government. Instead
of continuing to waste money rebuilding Afghanistan, we ought to be spending
money on a Marshall Plan for our friend and neighbor, Mexico.
problem is not that the government is too big because it tries to
do too much. The problem is that the government is too big and of
one mind with Wall Street, the financial crowd, Corporate America
and their economists. The cabal's one mind is to make the people
feel like jobs are being created while the cabal off-shores jobs
and the economy as fast as it can. The cabal has the people feeling
that, even though we have many problems, the country is headed in
the right direction. The country is headed in the wrong direction.
We'll stay headed in the wrong direction until there's a hue and
cry by the people for President Obama to lighten up on the campaigning
and go to work on the economy."
Ernest F. Hollings
the hue and cry about jobs -- stimulation for jobs when stimulation is
spent; tax credits for small business to hire when small business is trying
to avoid firing. President Obama, like other Presidents, fails to protect
the economy; fails to enforce our trade laws to protect production and
jobs. Long before the recession, we lost substantial manufacture - way
more jobs than from a recession. And jobs and the economy continue to
hemorrhage through an off-shore hole in the bottom of the economy boat.
We keep bailing with stimulation and do nothing to plug the hole. Our
investment, research, technology, development, production, jobs, and economy
are being off-shored to China, India, Vietnam, etc. It doesn't pay to
develop and produce in the United States. The best of innovation, Microsoft
and Intel, is being developed in China, and now GM is producing more cars
in China than the United States.
There's the hue and cry in Congress that we are losing jobs because Corporate
America has the "highest taxes in the world." Instead of crying
about the corporate income tax, Congress should abolish it and replace
it with a 2% value added tax. To the hue and cry about paying for health
care, Congress can add a 1% VAT to pay for it. Instead of the hue and
cry about paying down the debt, Congress can add a 2% VAT and start paying
down the debt. To the hue and cry about increasing taxes and promoting
exports, this 5% VAT would be cutting taxes, promoting exports, paying
for health care, and paying down the debt.
There's a hue and cry about bailouts when our trade laws (Section 201)
call on the President to act when production is endangered, not wait for
it to go bankrupt and need a bailout. There's a hue and cry about the
deficit in the balance of trade when President Obama could solve this
and create jobs with a 10% surcharge on imports like President Nixon did
in 1971. There's a hue and cry about people not being able to find a job,
when millions of jobs could be created and found if President Obama would
enforce the War Production Act of 1950, so that the nation could have
a domestic production and supply of equipment and materiel necessary for
our national security.
Now President Obama submits a budget for F/Y 2011 (page 178) calling for
a deficit in excess of $1 trillion each year, every year, for ten years.
We left President George W. Bush with surpluses as far as the eye can
see. President Obama envisions deficits for as far as the eye can see.
I served on the Senate Budget Committee for over thirty years, even briefly
as Chairman. If the President submitted such a budget to me as Chairman
I would tell him that I couldn't go home and defend such a budget; he
would have to get me a place to stay in Washington. I know all the economists
and members of the Budget Committee. But there is no hue and cry from
the economists; no hue and cry from the House or Senate Budget Committees.
There's no hue and cry from the Peterson Foundation. All the Peterson
Foundation wants to talk about is Social Security or some fiscal problem
happening years from now. There's no hue and cry from the Committee for
a Responsible Federal Budget. The Concord Coalition has lock jaw.
The President and Congress must change our tax laws and enforce our trade
laws so that we can defend the country and make it profitable to produce
in the United States. People fail to understand why this hasn't happened.
The President, the Congress, the financial community and Corporate America
are in cahoots. As long as the profits continue in China with the stock
market up, Wall Street is happy saying the recession is over, and the
contributions continue to flow for re-election. But if the President and
Congress move to change our tax laws and enforce our trade laws so Corporate
America can produce for a profit, the financial crowd and Corporate America
will holler "protectionism" and cut off contributions. Tom Donahue
of the United States Chamber of Commerce has already threatened to cut
off contributions. The people can't realize that Corporate America is
opposed to Washington taking action to rebuild our economy; that Corporate
America is opposed to making a profit in the U. S. because it can make
a bigger profit in China and doesn't have to worry about labor, safety,
or the environment. Unless there is a hue and cry from the people, Congress
will do nothing and the contributions will flow.
The problem is not that the government is too big because it tries to
do too much. The problem is that the government is too big and of one
mind with Wall Street, the financial crowd, Corporate America and their
economists. The cabal's one mind is to make the people feel like jobs
are being created while the cabal off-shores jobs and the economy as fast
as it can. The cabal has the people feeling that, even though we have
many problems, the country is headed in the right direction. The country
is headed in the wrong direction. We'll stay headed in the wrong direction
until there's a hue and cry by the people for President Obama to lighten
up on the campaigning and go to work on the economy.
of South Carolina served 38 years in the United States Senate, and for
many years was Chairman of the Commerce, Space, Science & Transportation
Committee. He is the author of the recently published book,
Government Work (University of South Carolina Press, 2008).
Ernest F. Hollings. All rights reserved. Contact
us for republication permission.
Ernest F. Hollings served
the public for 56 years -- 38 years in the United States Senate and as South
Carolina's governor, lieutenant governor and a member of the S.C. House of
Today, Hollings continues
to be influential in public affairs and offers this Web site as a compendium
of current and past positions on public issues. Learn
more about Fritz Hollings.
Hollings receives French honor
France honored retired
U.S. Sen. Fritz Hollings on in 2013 by awarding him the Legion of Honor for
his World War II service. More.
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the new book
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