Category: Corporate Power Page 4 of 5

IRS Takes Care of Wealthy in Pass-Through Tax Policy

On August 8, 2018

In Corporate Power, Debt, Democracy, Tax Bill, The Elite

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab.)

Photo: calwatchdog.com

The IRS was tasked after passage of the Tax Bill last winter with defining which businesses and owners would qualify for a special 20 % deduction on pass through income. Interpretations of the pass through 20 % deductions where announced yesterday. As maybe expected the law favors the rich, and even gives the Trump Organization new benefits which the president can take advantage of as he still holds title to his businesses and properties while in office.

Half of all U.S. businesses use pass-through income structures with 70 % of the income flowing through to the top 1 % in wealth.

Sources: Joint Committee on Taxation, Center on Budget and Policy Priorities – 5/10/18

The tax bill provision for pass through deductions builds on a tax law that is already biased toward the wealthy who own businesses structured to maximize tax benefits. The Center on Budget and Policy Priorities (CBPC) notes due to a byzantine design opportunities for gaming are rampant, “ it could wind up being even more expensive and delivering larger tax cuts to high-income filers than current estimates show because it creates a significant gaming opportunity: high-income individuals may now be able to secure very large tax savings by converting their labor income into pass-through income to take advantage of the new deduction.”

The CBPC estimates that over $50 billion will be lost in tax revenue each year for the nine years the law is in effect for a total of $450 billion of the $1.5 trillion deficit from the bill. When the law was written arbitrary winners and losers were chosen for example excluding architects and engineers. New York University law professor David Kamin observed in recent congressional testimony, “This pass-through deduction represents the very worst kind of tax policy, picking winners and losers haphazardly in a complex tax provision, and then generating significant incentives for people to rearrange their businesses to try to get on the right side of the line.”

Next Steps

We have consistently noted that the Tax Bill of 2017 favoring the rich with 80 % of the tax benefits will torch taxpayers to the tune of $1.5 trillion deficit to be financed by bonds. This abusive blatant giveaway to the rich is a disaster both in terms of income equality and economics. Our generation and many generations to come will be paying off bond interest instead of investing funds in education, infrastructure projects, job training, Heartland initiatives, medical care and apprenticeship programs. The bill needs to be repealed, applying taxes to corporations and the wealthy to invest in programs that benefit the 80 % not the top 1 % in income.

US Steel and Nucor Use Tariffs To Monopolize Markets

By Patrick Hill

On August 7, 2018

In Corporate Nation State, Corporate Power, Democracy, Protectionism, Tariffs, The Elite

Image: vice.com

Two major steel companies, US Steel and Nucor, last March lobbied the Trump Administration to post tariffs on imported steel at 25 %. They are now pressuring the Administration to deny any requests for waivers from the tariffs. Over 1,600 applications have been filed for exclusion from the tariff provisions which blanketed the world including the European Union, Mexico, Canada, Japan and China. The two steel giants are in fact creating a monopoly for their steel products in the U.S.

In order to protect about 33,000 steel worker jobs, several million jobs in steel using industries are jeopardized by the tariffs:

Sources: U.S. Bureau of Labor Statistics, Bloomberg – 3/2/18

Nucor paid for a film by presidential advisor Peter Navarro, when he was a professor at UC Irvine on the threat of China imported steel being dumped onto U.S. markets. Certainly, there are issues related to China trade practices but is using 25 % tariffs on all imported steel even from allies going to force China to change their export practices?

Next Steps:

Companies that use steel in their products are reeling from soaring price increases in steel and sourcing issues because U.S. steel producers do not make the products they need. Elite corporate CEOs are running their companies via the U.S. government to pick winners (themselves) and losers over 1,600 companies being denied exemptions to run their businesses successfully and keep jobs here in the U.S. Now, many firms are planning on moving operations to countries closer to their customers to avoid the tariffs all together – thus moving jobs out of the U.S. It seems already the tariff plan has backfired, moving jobs out of the U.S. and jeopardizing millions of jobs. We should not be tolerating this state of oligarchy, where two major companies setup tariffs to their exclusive benefit in while damaging thousands of other companies businesses and threatening millions of U.S. jobs. It is the job of our federal government to not pick winners and losers but to establish fair markets for innovation and entrepreneurship to triumph. The tariffs need to be lifted and an intelligent trade strategy in collaboriation with our allies to end China steel dumping practices be implemented.

Banks Squeeze Consumers on Savings, Credit Card Rates

By Patrick Hill

On August 1, 2018

In Big Five Banks, Consumer Squeeze, Corporate Power, Economy

Image: thinkinnovation

The biggest banks are enjoying high profit margins at the expense of consumers. Today, the rates on savings accounts are the lowest as a percentage of the Federal Funds rate and credit card rates are the highest in proportion to the respective Federal Funds rate. The Federal Funds rate is the rate the Federal Reserve charges banks to borrow money.

Sources: Federal Reserve St. Louis, The Wall Street Journal, The Daily Shot – 8/1/18

Sources: Federal Reserve St. Louis, The Wall Street Journal, The Daily Shot – 7/31/18

The divergence on both charts shows how the consumer is squeezed on both sides of the financial ledger – receiving less for their savings than they should historically and getting charged much more on credit cards than is fair.

Today, the top five banks control 50 % of all banking system assets in our $15.3 trillion dollar system. In 1990 the five largest banks held just 10 % of all bank assets. The assets that Wells Fargo holds by itself equal all the assets of the top five banks in 1990. As a result of the consolidation during the Great Recession our banking system is highly concentrated in just a few banks.

Next Steps:

The lack of competition is clearly hurting consumers in both financial directions, paying higher interest rates than are fair and not receiving the interest income they should. The key point is that present regulators are not doing their job requiring banks to pay higher interest and keep credit card interest charges in check. Next, from our post on bank concentration we recommended a break-up of the big five banks:

“Experts like Neil Kashkari who led the Bush Administration’s $700 billion bank bailout effort the Troubled Asset Relief Program, thinks these mega banks should be broken up. Now Kashkari is the Federal Reserve Governor for Minneapolis and has called for reducing the size of the big banks and distributing their power and control to provide a better shock absorber in the event of another banking crisis. He even calls for a 25 % capital reserve requirement many times the present capital reserve requirements the Federal Reserve has maintained in its stress test program. We have seen with the failure of Wells to protect its customers from 3.5 million fake checking accounts created by its sales staff how poorly bank management performs. Now, the bank is being investigated for improper referrals and transferring of funds in the wealth management division.

Enough is enough, our present financial system is too concentrated to effectively manage; distributing wealth, power and control back into regions is one way to ensure reasonable oversight and management can prevail. In addition, we support calls for a modern day Glass-Steagall Act to separate investment banking (were sub–prime derivatives of the Great Recession were created) and commercial banking for retail customers. We need to protect our citizens financial assets from the financial engineering and schemes of Wall Street. It is not a coincidence that today 90 % of all wealth is held by the fewest number of people since 1929.”

Do We Need A $100 billion Tax Cut for the 1 % ? No.

By Patrick Hill

On July 31, 2018

In Corporate Power, Debt, Tax Bill, The Elite

Image: post.gazette.com

That’s right, the GOP Administration is working on jamming through before the next Congress is seated in January a capital gains tax cut of which almost 90 % of the benefits would go to the top 1 % in income. Remember it is this same 1 % who received 80 % of the benefits in the Tax Cut bill Congress passed last winter. We now have a deficit over the next 10 years added by that Tax Cut bill of $1.5 trillion. The federal government faces the largest deficit since the 2008 Great Recession and will be issuing nearly $800 billion in bond financing to make up the difference in the 2^nd half of this year.

The following analysis by the Wharton School of Business shows that indexing capital gains to inflation would provide a windfall to the top 1 %:

Sources: Wharton School of Business, The Washington Post – 7/31/18

The Administration knows that it will be difficult to pass another tax cut for the rich through the Senate where 60 votes are needed. So, Treasury Secretary Mnuchin noted at a Latin American conference last week, “we are studying that (inflation indexing capital gains) internally, and we are also studying the economic costs and the impact on growth.” Many experts on tax law find going around Congress to be illegal. The Bush administration in 1992 reviewed the legality of the Treasury department unilaterally making the inflation indexing change and found the department was not authorized to make such a major change in tax law.

Next Steps

We have the lowest level of corporate tax receipts in 75 years, and the tax level on the top 1 % is the lowest in history. We don’t need to be giving the wealthy another tax cut, we know that trickle-down economics never worked.

Sources: World Inequality Database, The Washington Post – 7/31/18

What has really happened since the Reagan years is that tax policy, deductions, asset inflation, executive stock compensation deductions and other financial gimmicks has amounted to a ‘tsunami up’ phenomenon. Actually, our country has the highest level of concentration of wealth in the top 1 % since 1929. Remember from your history books, what happened after 1929 and the Smoot – Hawley trade wars? The Great Depression.

The real priority for our federal government is to Make America a Democracy Again (our post on the political power of the 1%), focusing on how to create basic economic opportunities for all; access to high quality healthcare, reducing student debt, investing in higher education and apprenticeship programs, welcoming immigrants to build our labor force, and investing in our Heartland to bring rural regions of the country into the economic mainstream.

The Elite Makes U.S. A Land of Renters

By Patrick Hill

On July 24, 2018

In Consumer Squeeze, Corporate Power, Housing, Labor, Low Income Finance, The Elite, Wages

Photo: marketplace.org

Household formations have been trending down over the past 30 years from its peak reached after a continual increase since 1955. More than a quarter of possible home buyers are unemployed, underemployed, saddled with student debt or living at home with their parents making home buying a challenge. The other possible household formation group is making such low income they are forced into renting as the only budgetary alternative.

Source: Real Investment Advice – 7/13/18

The housing market has shifted drastically toward high end homes for the wealthy, not first time buyers, and multi-unit rental units for investment. As investors look outside the stock market for high returns rental units have been an excellent income stream with income streams totaling $800 billion per year.

So, while wages for the 80% in income, non – supervisory workers have been stagnant; profits, stock buybacks, executive salaries and other financial gimmicks have provided the top 10 % with 90 % of national income since 2008. In effect, we have become a nation of renters due to two factors: wages being held down, and inflated assets benefiting the rich.

Source: Real Investment Advice – 7/13/18

Corporate executives do not make their stock price and profit targets by raising wages resulting in reduced profits. Wages as a cost cut immediately into profits, which a CEO wants to stay clear of having to explain to the Board or shareholders. Does it really make sense that workers are not getting wage increases in a job market with the lowest unemployment rate in 10 years? Until workers get enough countervailing power in wage negotiations worker wages are likely to stay stagnant. No, executives are allocating profits, offshore and tax cut funds to benefit themselves and shareholders while workers are left out of the economic feast.

Next steps:

We have outlined multiple reasons for lack of wage increases in earlier posts, the bottom line is executives don’t want to give raises beyond inflation. Proposals like Senator Cory Booker’s Worker’s Dividend Act to share stock buyback dollars with workers is a good start, yet the sustainable solution lies in corporate governance, where activities shareholders required management to give workers their fair share of profits; for example if executives receive a 5 % cut of the profits workers should receive the same 5 % as well.

To give first time home buyers a boost, we need to reduce student loan debt by re financing their rates to the rates that the Federal Reserve offers bank. After all we are ‘banking in the future’ of our young people. Where possible student debt could be forgiven for domestic service corps work or working with corporations who hire graduates to reduce their loans as part of the offer package. Government mortgage agencies need to support first time buyers with reduced down payment requirements and other incentives. To incentivize home builders set asides of homes for first time buyers need to be established to create inventory from which a first time buyer can select their home.

Increasing household formations should be a top priority for policy makers and the wealthy alike. When household formations are moving ahead, furniture, appliances, home improvement hardware, and thousands of product and services are purchased. Plus, when people own a home they have a piece in the future of their neighborhood, schools and community which will increase property values for all.

Make America A Democracy Again

By Patrick Hill

On July 23, 2018

In Common Good, Corporate Nation State, Corporate Power, Debt, Democracy, Wages

Image: civicsacademy.co.za

Memo

To: Oli Garchy, CEO, The Elite

Subject: Meeting – Make America a Democracy Again

Time: Lunch

Place: The Lawn in Front of the Lincoln Memorial, Washington DC (It helps to have Honest Abe watching over the mixed group)

Date: Soon…before it’s too late.

Oli,

Ok, we recognize you and your team since Ronald Reagan have built an Oligarchy that stands out (not outstanding for the 90 %) as a model for the history books, based on government statistics:

1. President is a billionaire (first one) – and holds title to all his properties while in office, making money while in office (first time)
2. Cabinet of largest number of billionaires in history of U.S.
3. Corporate tax rate lowest in 50 years
4. Corporations have the most cash ever sitting in banks and offshore shelters at over $1 trillion
5. Top 1 % taxes are the lowest in 50 years
6. Top 1 % received 90 % of income gained since the Great Recession
7. The 80 % working class real wages have declined in the last 30 years – while CEO pay is 300 times the average worker’s
8. Home ownership is at lowest level in 40 yrs – renting at the highest level in 15 yrs (you’ll own more residential real estate than ever)
9. Student debt highest ever at $1.5 trillion – because:
10. Spending by state and federal government on public education secondary thru higher education is the lowest ever as per cent of GDP
12. Healthcare services costs more per person in US than anywhere in the world with life expectancy lowest of all developed countries – due to all the built in middle profit layers of insurance, drug price gauging and stock buybacks 13. Stock buy backs were at the highest level ever last quarter $431 billion, not one dime to employees or workers directly in wage increases
14. Last year had the highest average global temperature, yet the administration wants to end car emissions standards by California, drill for more oil on the coasts – fossil fuel executives are getting what they want and more 15. Tax receipts from U.S. corporations hit a 75 year low 16. The Top 1 % have 40 % of all U.S. wealth, the highest concentration since 1929

You’ve wrapped Congress around your little finger with the Tax Cut bill where 70 % of the tax cut proceeds went to executive salaries, stock buybacks, and dividends, very little into research and development, increasing productivity or job training. You promised to raise wages and very few companies did.

The American people care more about the environment and its stewardship then you’re team, 60 % in a recent Pew Research poll say that preserving the environment is more important, even if there is an economic cost. Oli, think about it, your profits won’t last long if your customers are unhealthy or dying due to pollution of the water, air or land.

Professors Gilens and Page at Princeton and Northwestern reviewed opinion polls versus legislation passed over the past 30 years and found of 1779 laws passed 90 % did not support popular opinion, seems you own Congress.

Your 30 year old oligarchy has come at great cost, look at the debt increased by a magnitude from the Tax Cut you wanted and the public did not:

Sources: The Congressional Budget Office, The Wall Street Journal, The Daily Shot – 7/23/18

You’ve just mortgaged your children and our children’s future for good jobs, owning a home and good health care just to give you and your friends a huge tax cut. You and your team have the lowest corporate tax cut on record, but at great cost!

Oli, here is the issue for your team; without a thriving Working Class the value of your assets will go down. Consumer spending will spiral down unless the Working Class get a fair piece of the economic pie. When consumer spending goes down, your businesses begin losing money, their value drops and if the spiral keeps going like it did after 1929, you could lose everything.

The way to build a Working Class that you need is via a democracy – remember that from your textbooks. It looks like this: a government ‘by the people, for the people and of the people’ – Lincoln had it right.

Think about it Oli, meet with us before it is too late. In the future, there maybe hostility with the wealthy elite, but there is still time.

Next steps:

How about lunch? How about our people meeting with your people? Our folks; Senators – Warren, Sanders, Booker and Harris, Representative Pramila Jayapal, Nick Hanauer, and Robert Reich.

Let me know who on your team you would like to invite, maybe the Koch Brothers, The Devos – as couple, Steve Mnuchin, Wilbur Ross, and five more would be a good size group.

Our luncheon wrap up takes place in the Jefferson Memorial where on the south east portico Jefferson observed we must make progress together:

“I am not an advocate for frequent changes in laws and constitutions, but laws and institutions must go hand in hand with the progress of the human mind.”

Please read our posts on the Common Good in a Democracy as a refresher on what it is and how we all need to build it again. Frankly, Oli, the Common Good seems lost right now, yet it provides the beacon to keep the ship of state on course for all the people. We need to work together to build the Common Good. Let’s – Make America A Democracy Again.

Corporations Are Taking Worker Wages To Increase Profits

By Patrick Hill

On July 3, 2018

In Common Good, Corporate Nation State, Corporate Power, Corporate Reform, Worker Wages

Image: csmonitor.com

Eight-three percent of all workers are ‘non-supervisory’ workers in the Federal Reserve classification of types of workers, yet they have not seen a fair cut of the profits since 2000. Corporations have used financial engineering techniques like stock buybacks where funds are used to buy corporate stock and goose the price up. J.P. Morgan estimates that with dollars repatriated from the tax cut bill, that stock buybacks will hit a new record of $800 billion for 2018. This $800 billion is absolutely wasted on driving stock prices up while not investing in employee wages, capital expenditures, research and development, instead stock buy backs increase executive compensation tied to stock price.

Source; Real Investment Advice – 6/29/18

Since before the Great Recession wages have been stagnant for working class people, the 80 % of the workforce that make corporations prosper. The wages to profits ratio arc shows a continuing decline since the 1980s – interestingly when the GOP was telling us that ‘trickle down’ economics would bring economic prosperity to all. Instead working class families are having to take two or three jobs and borrow on their credit cards just to keep their household finances afloat.

Next Steps:

The country is run by Corporate Nation States who make the contributions, fund the campaigns and essentially buy off the legislative influence that counts in the U.S. Each year corporations spend hundreds of millions of dollars in Washington DC lobbying alone, i.e. Amazon has 94 lobbyists keeping DOJ anti-trust lawyers distracted, the FCC at bay on drones and lobby other interests to keep its juggernaut growing.

It is time we wake up to what is happening from Supreme Court decisions that favor American Express over merchants, to the GOP tax cut bill, to relaxing the Dodd-Frank rules on banking Corporate Nation States are running this country. The basic economic trends in America are not going to change unless we have corporate reform. Will this reform come in the form of legislation like Sen. Booker’s Dividend Reform Act or letters from investment banks to corporate CEOs like Blackrock CEO Larry Fink sent recently. We are not sure, but we need to take a path that takes on the dominant power of Corporate Nation States or we are going to see the middle class wiped out and our economy with it. After all, as we pointed out in a recent post on the Common Good, when the working class has little money to spend the rich will lose too. The working class has earned a fair share of the profits. Fair share means when profits go up by 5 % wages go up by at least 5 % otherwise the economy deteriorates like it is today deeply in public and corporate debt.

“in the end the rich will need to see that it is in their interest to build the Common Good, by contributing to our institutions of government and common people or they will lose what they already have and probably a lot more.”

Building An Economy for the Common Good

By Patrick Hill

On June 29, 2018

In Common Good, Corporate Nation State, Corporate Power, Corporate Reform, Economy, Social Responsibility

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab.)

Image: Your Little Planet

In the past week, American Express won a gag order over merchants when the Supreme Court handed down a decision that allowed the huge financial services company to require all their merchants not to tell their consumers other cards had cheaper swipe fees. Amazon announced the acquisition of Pill Pack a mail order pharmacy company, which sent financial shock waves through the drug store industry. So, it goes on, a Corporate Nation State (CNS) like American Express or Amazon have their way limiting consumers choices to reduce costs and to take over the drug marketplace with no fair market rules in place.

Are these two companies focused on building the common good, fair play rules in the marketplace, doing what is right for consumers and taking social responsibility for the impact of their decisions? No. There is no countervailing power when Congress, The Supreme Court and the Executive branch are all doing the bidding of CNS organizations.

Corporations run our federal government by donating hundreds of millions of dollars (they have no campaign donation limits) each year to congressional campaigns through super PACs. Some CNS entities have large lobbying offices in Washington, like Amazon with 94 lobbyists knocking on Representative and Senator doors every day! Do we have an army of lobbyists twisting arms for our interests? No.

Where can we look for corporate reform to build the common good? Larry Fink, the CEO of Blackrock, a $6.3 trillion institutional investment corporation, sent a letter to 1000 CEOs of companies they invest in telling them that beyond profits they would be evaluated on how well they are taking care of the environment, responding to climate change, having a diverse workforce, and fairness with their employees. We applaud Mr. Fink’s move, and look to more investors to call upon corporate management to be held accountable for their social responsibilities.

There are corporate accountability frameworks that have been receiving widespread acceptance and government support. In the European Union a group called the Economy for the Common Good (ECG), has over 2400 corporate endorsers and almost 10,000 individuals support their effort to require corporations report on a Common Good Balance Sheet their social responsibility activities. The EU has adopted a non-binding directive requiring companies of 500 employees and ‘public interest’ to report on human rights, diversity, labor rights, the environment, health and anti-corruption measures. The report is not included with the corporate annual report and is therefore not audited.

The Common Good Balance Sheet is divided into four key accountability areas: human dignity, solidarity and social justice, environmental sustainability, and transparency and co-determination:

Source: Economy for the Common Good – 6/29/18

The ECG is now working to make actual changes in corporate behavior by focusing on gaining support for these eight issues:

universal (all values and relevant issues)
legally binding
measurable and comparable (e. g. using points)
externally audited
generally understandable (for the public)
public (on all products, websites, shop doors)
developed in a participatory process
linked to legal incentives (taxes, tariffs, …)

The first phase has been completed of their initiative to gain EU nonbinding support next they look for a binding EU directive by 2020 followed by integration financial reporting.

We need to find corporate leaders in the US that see the vision of an Economy for the Common Good, embrace it and implement its ideas in their day to day operations – while measuring the results to show it is a better way to run a business. A business can build an economy that works for all and still be a thriving profitable enterprise.

Supreme Court Empowers American Express To Gag Merchants

By Patrick Hill

On June 26, 2018

In Corporate Nation State, Corporate Power, Restraint of Trade, Supreme Court

Photo: consumerist.com

Supreme Court Justice, Clarence Thomas, wrote in the majority opinion released yesterday, “two-sided platforms, differ from traditional markets in important ways. Since card companies deal with both merchants and consumers.” He continued “people challenging actions as anticompetitive must take account of the effect on both sets of market participants.” The majority did not see the restraint in trade by American Express requiring merchants to only offer their card, and not tell customers that Visa and Mastercard had cheaper swipe fees.

The majority was by only one vote 5-4, with Justice Stephen J. Breyer reading his minority opinion summary, an unusual step, when he said, “I particularly fear the interpretive impact of the majority’s discussion of what it calls ‘two-sided platforms,’ in an era when that term might be thought to apply to many internet-related goods and services that are becoming ever more important.”

The bottom line is this: American Express can gag its merchants legally from telling their customers that American Express fees are higher than other cards and they will have to raise prices as a result. Plus, the implication is that other cards are not available for customers to pay for their purchases.

American Express has a huge market share in credit card networks:

Source: valuepenguin.com – 2017

Yes, that’s right Amex did .695 trillion dollars in transactions in 2016! While Visa does have a larger share, American Express is essentially gaging its merchants about the costs of transactions and restraining trade.

Next Steps:

We are frustrated and disappointed that SCOTUS has sided with a Corporate Nation State, American Express, to support continuing to build their financial empire at the cost of retailers optimally running their businesses. Think of retailer’s position – caught in an Amazon competitive whirl wind, Internet global access to products and constantly trying to gain the attention of shoppers to come into their store.

The American Express ‘steering clause’ is clearly a restraint of trade, we need court decisions focused on creating a level playing field for all companies to do business. Congress needs to pass a law making it clear that these ‘two sided’ platforms are just another form of distribution so a product or services provider cannot restrain the distributor from exercising his business rights and doing what is right for their customer.

Amazon’s Growing Corporate Power In Washington – Threat to Capitalist Democracy

By Patrick Hill

On June 20, 2018

In Anti Trust, Corporate Nation State, Corporate Power, Corporate Reform, Executive Compensation, Stock Buybacks

Source: e-brand.biz

An oligarchy is defined by Wikipedia as, “a form of power structure in which power rests with a small number of people”. One of the Elite is corporate tycoon Jeff Bezos, Amazon founder, who is thought to be the wealthiest person in the world with net worth estimated at $141 billion. He wields great corporate power leading an innovative company, pioneering e-retailing when many said it couldn’t be done building a $177 billion empire in e-Commerce, web services, grocery, and just about everything you can buy in a store you can get from Amazon. Amazon owns 43 % of the e-Commerce market, and has been responsible for a complete transformation of brick-n-mortar retailing causing the loss of thousands of jobs. The company name is synonymous with going out of business as some store owners declare they have been ‘Amazoned’.

Amazon has one of the largest lobbying forces in Washington, 94 strong:

Sources: The Center for Responsible Politics, The Wall Street Journal, 6/20/18

Amazon spent $13 million on lobbying and is one of the top spenders on lobbying along with Google, AT & T and Oracle.

The Amazon corporate power juggernaut keeps rolling. The e-Commerce giant owns 50 % of the book print sales market for publishers, with Barnes and Noble in the teens and independent book sellers about 6 – 8 percent. Ten years ago, independent book stores held a 30 % share of the book print sales market until Amazon drove them out of business, with convenience and not being required to pay sales taxes to states (though the Supreme Court just ruled last week that e-Commerce firms must pay sales taxes). Now, in an ironic twist the firm has 3 brick- n-mortar stores and is opening 5 more in 2017- so Amazon drives the competition out of business, with low cost prices and no taxes then starts opening brick n-mortar-stores. Is that fair? In audio books Amazon owns Audible the No. 1 provider of audio books where last year listener – readers heard over 2 billion hours of programming. The Kindle subscription business holds 14 % of the e-reader market and is the fastest growing segment increasing 4 % in 2016

Amazon is humongous compared to its competitors with brick-n-mortar stores:

Source: visualcapitalist.com – 12/30/16

Amazon is larger than the next 8 competitors and it is killing their businesses by amortizing its cut rate prices with profits from its Business to Business cloud enterprise – Amazon Web Services (AWS).

Source: Geekwire – 10/1/16

Without AWS Amazon would not be able to take profit from the B to B side of the business and fund the cut rate prices driving other stores out of business. While it may seem like this is capitalism ‘creative destruction’ at its best, this condition strikes us as unfair competition. Add a tax cut giveaway to corporations like Amazon, and the juggernaut keeps picking up speed at the expense of workers and democracy.

Next steps:

One Lobbyist Limit – The Company is a citizen according to the Supreme Court in Citizens United, then good it has one lobbyist representative to Congress.
Sunshine Contractor Monitoring – Amazon and the top 100 government contractors would have to contribute to a web site noting their business with the Federal Government, revenue from the contracts, agencies working with, number of government staff working with Amazon, Amazon staff size working on projects, where they are located, and all contacts with Congress, Executive branch staff – date, time, attends, discussion top, money involved, follow up. All these details would be available to the public on a web site 24/7. These disclosure are a ‘annual report’ to the people of the US about what the top 100 contracts are doing for our federal government, and us and how they are contributing to our government and society goals.
Campaign Contribution limits – $2700 per corporation if they are a person, that is all a citizen is allowed to contribute, and the Supreme Court found corporations were citizens, so Amazon has the same limit as a citizen.
Corporate Reform – top 2 corporations in an industry sector must have a minority number of outside board members elected by all the shareholders. Employees can form ‘councils’ along the line of the German worker council models. Salaries for executives would be limited to 50 times the average worker in the firm (consumer discretionary sector the average for CEOs is 350 times, Bloomberg, Feb 1 2018)., Stock buy backs need to end, or be phased out as they are artificially raising the price of stock on major exchanges by 20 – 15 % experts estimate just to line the pockets of executives and major shareholders, the funds are not going to wage increases, productivity investments or job training.
Anti – trust – Amazon needs to be broken up into a corporate web business – Amazon Web Services, and grocery business (Whole Foods never should have been approved) spun off. The e-Commerce business needs to stand on its own, plus we need to look for other ways to create fair- play markets possibly separating services from distribution,