The political landscape of the United States is on a collision course with billionaires and their multinationals. Although the federal government and those drivers of the economy have always been conjoined together in a rather grotesque manner, a certain disparity in their wishes has become increasingly apparent within the movement of the presidential election narrative.
What is the United States without its bustling marketplace of corporations and profligate top class? What would the country come to be without the safeguarded excess of those inherently powerful business owners? The perennial American corporations of today’s economy are the pulsating organs of the nation’s inconceivably healthy body; they unquestionably precipitate both domestic and foreign policy, perhaps even more so than the actual lawmakers of the federal government themselves. Lobbying spending has skyrocketed in recent years, hitting $3.4 billion in 2018, according to data from the Center for Responsive Politics. Top spenders were listed as the United States Chamber of Commerce and PhRMA; with colossus companies like Pfizer and Johnson & Johnson heading up efforts to sway public policy.
But the federal government might attempt to bite back, or at least try in a false pretense to grab issue voters. Sens Elizabeth Warren and Bernie Sanders — both Democratic presidential candidates — represent the ambitious extremes of tax increase plans for the fiscally liberal. Warren’s strategy has explicitly appeared to be the upending of offshore tax havens at which principal American investors vacation. Bernie Sanders takes the issue further, implementing what some term a “sin tax,” or the “Income Inequality Tax,” on corporations with significant pay disparities. It doesn’t end there. Former Vice President Joe Biden promises a trio of tax hikes in personal income, capital gains and corporate income. It’s easy to vault over into the bandwagon for revenge on the supposedly “sinful” CEOs and tyrannical billionaires, but the question of these candidates’ loyalty to this cause still lingers. Both Warren and Sanders rake in millions per year. Joe “Middle Class” Biden’s tax returns show $15 million in income after 2016. The durability of their tax plans against the corporations and investors they rely on is something the voters should legitimately question. No one would even notice the issue slip from the stage as the Democratic preliminaries grind to a close.
The disposition of billionaires and wealthy CEOs — even ex-CEOs like Bill Gates — is something that should be taken into account. Gates warns of the potential barriers that these tax increases could impose on innovation and attractive capital formation. Jamie Dimon whines about Warren and her “harsh words” towards the affluent few of America. But do these perturbed plutocrats have any weight in their comments?
The United States will most likely remain an economic leader, regardless of these proposed barriers. The U.S. economy is in the middle of its largest expansion, even as third quarter growth has hit a 1.6% road bump. Corporate tax havens — with attractive networks of bilateral tax treaties and base erosion and profit shifting tools — will present the biggest challenge to any candidate with the agency to go through with an increased corporate tax rate. High levels of OECD compliance prevent national regulatory oversight while the Tax Cuts and Jobs Act — passed in 2017— exempts foreign profits from domestic taxation. There are endless roadblocks on the horizon for these upstart reformers.
In all likelihood, the ugly truth is that a significant change in the status quo and ambiguous injunctions of the U.S. economy will not be achieved. Although a substantial amount of the American public stands behind such a movement, they fail to realize that their elected proponents of “change” are already bought and paid for, and that there have been barcodes on their heads all along. Kudos for trying, though.