One of the problems we have found is that politicians are used car salesmen who can’t do basic math. They are all shiny and try to woo you into believing their sales pitch, but if you sit down and do simple third-grade math you realize their “sweet deal” is really a lemon, and in reality no amount of sugar can turn that lemon into lemonade.
Case in point, Obama and Hillary denounce “evil, greedy corporations” for making too much money. Their solution? Tax the hell out of those companies to give the money to the people.
To start off with, the bald fact of the matter is that if a corporation suffers a tax increase, and their shareholders insist on x amount of profit, that means that the corporation will have to raise prices of their goods or services. Rock, meet hard place.
Let me illustrate the point by using the industries I know best: consumer packaged goods and supermarkets.
Let’s say that Procter & Gamble gets hit with a “closed loophole” tax hit which results in them having to pay, say, an extra $100 million to the IRS. There are about 100 million taxpaying households in the United States, so even if we assume that the FedGov will somehow pass on the entire $100 million directly to taxpayers (uh huh), that means that President Obama’s Greedy Corporation Tax Loophole Closure Act will result in a $1 tax rebate to you, just from that one corporation.
Impressed? Don’t be.
The author goes on to illustrate — using simple addition and multiplication that a 9-year-old could do — how that $1 “tax rebate” taken from the “greedy corporation” actually winds up costing you $1.41.
Another issue that the candidates are ignoring is the fact that companies like Exxon Mobil are owned primarily by every-day Americans, in the form of stocks and mutual funds as part of their IRAs and 401ks.
Mutual funds, index funds and pension funds (including union pension funds) own about 52 percent of Exxon Mobil’s shares. Individual shareholders, about two million or so, own almost all the rest. The pooh-bahs who run Exxon own less than 1 percent of the company.
When Exxon Mobil earns almost $12 billion in a quarter, or $41 billion in a year, as it did in 2007, that money does not go into the coffers of a few billionaire executives quaffing Champagne in Texas. It goes into the pension and retirement accounts of ordinary citizens. When Exxon pays a dividend, that money goes to pay for the mortgages and oxygen tanks and in-home care of lots of elderly Americans.
Every person who reads this needs to do what the candidates are unwilling to do: the math. Every politician, local, state, and federal, makes campaign promises, but few do the elementary-school math. And they hope you won’t either. It is your responsibility as a voter to fully vet the candidates, and that means before voting, do the math. When you do, most of the policies and proposals just don’t add up. Vote only for the ones that do.