The EPA and the common defense

THE EPA AND THE COMMON DEFENSE
By Bob Confer

Of all of the myriad agencies created and maintained by the Executive Branch, few have proven to be as detrimental to the United States as the Environmental Protection Agency. Since its birth under President Nixon’s executive order in 1970, the mission of the EPA has been to protect human health and the environment. The mission has been mutilated since the start, as the environment (or at least what we are led to believe is the environment) has taken so much precedent that the human health aspect — whether it is the physical, mental, social or economic sort — has been deemed worthless in comparison.

More often than not, it has appeared that the power brokers in Washington use the environment (and therefore the EPA) as a tool, a compelling means by which to exert its brand of total control over economic functions it would otherwise have a difficult time with without such propaganda. Over time, the EPA has touched everything from the food we eat (from over-the-top dust regulations to clean water rules that strip property rights) to the energy we use (telling oil and gas companies where, how and when to extract much-needed resources, creating a dependency on foreign sources) to the air we breathe (instituting utterly insane emissions standards for things as simple as portable fuel tanks). All of those rules and thousands more add to the cost of doing business and therefore the cost of living. The actual negative impact on the American consumer is in the hundreds of billions per year as we end up paying for these regulations at the market, fuel pump, and department store.

The EPA’s modus operandi is unconstitutional in two ways. One, the federal government is not authorized to legislate environmental issues within the states. Two, in an affront to the separation of powers, it creates laws on its own accord, laws that should in all actuality be produced by Congress.

The Founding Fathers understood that the scope of the federal system should be limited and, now, more than two centuries later it still makes as much sense as it did then. The analysis, protection, and regulation of the environment, its resources and its uses should be left to both the states and the free market.

There is no agency that better understands the uniqueness of, say New York, and its various habitats and the creatures that inhabit them than the state’s environmental arm, the Department of Conservation. It is that agency and New York’s state and local lawmakers (along with citizen participation) that should decide what are permissible levels of development and non-standard inputs into the environment as well as what may be taken from it. The federal government doesn’t have the ability (let alone the jurisdiction) to understand the intricacies and interrelatedness of the natural world, the businesses, and the people within a given state. And, frankly, it doesn’t care, either.

In all actuality, the ultimate power should belong to the individual, acting as a consumer. Participants in a marketplace will base their actions on morality and altruism as much as want and need. If a manufacturer, farmer or energy producer is found to be in the wrong in that consumer’s mind — as well as that of other consumers — the demand at the micro and, then cumulatively, macro level will be affected, changing the business’ way of doing things. The purchaser — not the government — should have the greatest effect on a specific product or industry and the practices it utilizes.

The preamble to the Constitution describes the complex yet basic and limited purposes of our government and among them is the provision of common defense. The EPA would actually have constitutional justification and legal reason for existence if it didn’t focus on the internal and instead focused on the external. One of the costliest and most dangerous threats to our nation’s economic and natural well-being is invasive species, animals and plants that don’t belong in our country but, through global trade, end up taking root and, in many cases, taking over, destroying our resources to the tune of tens of trillions of dollars in perpetuity.

There are many scourges currently laying waste to our environs. Among them are zebra mussels, which arrived via ballast water of boats traveling the St. Lawrence Seaway. These prolific Russian shellfish coat hydroelectric and water treatment facilities and costs to eradicate them exceeds $200 million per year. Another invader is the emerald ash borer, a beetle that came from Asia in the 1990s and has so far killed 100 million ash trees. 7.5 billion more trees are threatened by this unstoppable beast. The ash is incredibly important to our economy and were it to be erased from our forests (which looks likely), the lumber industry would lose $25 billion in output per year, setting off a domino effect across other industries. And then there’s the matter of the Asian carp, a large bottom-feeding fish currently making its way to the Great Lakes where it will be certain to disrupt the system’s $7 billion fishery. These invaders represent only the tip of the iceberg. Many more are here. More are coming.

With the vast amount of exports we bring in annually (an outcome of Big Government making the United State unattractive for manufacturing), it’s no wonder that we’ve opened our borders to such a pestilence. More than 4 million shipping containers come to America every year, filled with unchecked product of questionable integrity from questionable sources (think of China and the toys that had lead and/or date rape drugs in their paints). If the products themselves are that faulty, imagine the skids upon which they are shipped (what insects do they carry?) or the craft that carry them (what do their ballasts hold?).

If the EPA were serious about living out its mission, it should be determined to stop these natural invaders and protect our nation from them. These outside factors will compromise our environment and health more than any domestic factors will. So, rather than harassing a locally-owned gas station that hopes to upgrade its pumping station, the EPA should instead hold accountable the foreign firms and governments that don’t care the least bit about America’s wild lands and natural resources; after all, corrupt trading partners — like China — would prefer to see our resources expunged because it means more exporting business for them. Our losses are their gains. Invasive species represent a sort of economic warfare.

But, it is patently obvious that the EPA isn’t concerned with the foreign pests. During July of this year, the House of Representatives and the EPA worked together to craft legislation that would have eliminated all federal environmental funding to New York for 2012, something that amounted to $869 million in 2009 (the most recent year for which figures are available). The EPA forced this maneuver because New York was doing something that the EPA won’t, addressing invasive species. The state has issued new standards set for 2013 that demand cleanliness of ballast water within ships entering New York waters, which include important shipping hubs and routes such as New York City and the St. Lawrence Seaway. It was the intent of the state to prevent a disaster like the zebra mussels.

The Coast Guard plans to introduce similar standards later this decade, and like New York they’ve come under fire. EPA officials and numerous Congressmen, conveniently forgetting that we are a sovereign nation, counter with the claim that the rules are 100 times more stringent than upcoming international standards. Once again, with commentary like that Washington shows that it is more in tune with the globalists and their needs rather than the needs of the American people, our economy and our environment.

It’s also interesting that the EPA won’t do anything to stop the incoming creatures and diseases yet, in conjunction with Congress, will provide money to the states to stop — or at least deal with — their advance once they’ve arrived and taken hold. That creates a means of dependency for the states as well as job security for the EPA, two tactics that maintain the federal stranglehold over the states by somehow making it look more important than it really is.

The EPA’s approach to the security of our borders is eerily similar to Washington’s efforts when it comes to another invader: the human aliens who come to our nation unabated from Mexico. That invasion is quietly permitted for many of the same reasons — appeasement of the globalists, the destruction of America’s unique identity, and the purposeful weakening of America’s economy.

It’s obvious that protecting our borders and ensuring our common defense are an afterthought by design. That’s a major point of frustration, for it is one of the very few things for which our federal government is actually obligated and empowered to do.

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Originally appeared in the 10 August 2011 The New American at:

http://www.thenewamerican.com/opinion/950-bob-confer/8554-the-epa-and-the-common-defense

New York should tax public pensions

NEW YORK SHOULD TAX PUBLIC PENSIONS
By Bob Confer

New York residents are excluded from paying state taxes on the first $20,000 of their retirement income from private pensions. If they happen to be former government workers, though, things are quite different: Local, state, federal and military retirees don’t pay any state tax at all on their publicly-provided pensions, no matter if it’s $20,000 or $80,000.

Government employees are quick to defend this preferential treatment with the reasoning that if they were to be taxed, they’d move to another state in retirement. If that’s the case, then why are their retirees already leaving New York in droves? Get this: Pensions mailed to out-of-state residents who used to work in our governments cost New Yorkers $2.5 billion per year! So, if the tax exemption is a major selling point to stay in New York, why is it not working?

It’s not working because the system is broken – and utterly unfair - and it’s high time that this was rectified. Albany should either make all retirement income completely tax-exempt or cap the public pension exemption at $20,000 as well. A third option, ending all exemptions on retirement income and taxing them at their full value, is a non-starter although I would argue that it makes the most sense and grants the most equality: Income is income; it doesn’t matter if it occurs in your Golden Years or working years, so why should any of it be tax-free?

Looking at the first two possibilities and considering the dire fiscal straits that the Empire State is in (a combined $128.5 billion in state and public authority debt), it would be out of the question for the Legislature – who never met a tax they didn’t like - to fully eliminate this revenue source. So, by process of elimination, that means public sector retirees should see their exemption capped at $20,000.

This would bring in substantial revenues. There are 375,800 pensioners from state and local governments. There are 141,000 more who were teachers. Those numbers do not include hundreds of thousands more receiving funds from the pension systems of New York City and the federal government. Nearly all of the aforementioned workers – especially into the future - would fall in the $20,000-plus bracket. According to state documents, recent teacher retirees with full benefits receive $80,000 per year while recent non-teacher government retirees received an average annual package of $50,000.

Some will protest and say the average pensions for these job classifications are $47,000 and $19,000 respectively. But, those lower values include those who retired decades ago. Those outliers who bring down the average will either pass soon or have their numbers dwarfed by a gigantic population of Baby Boomers will take their place on or add to the pension rolls, all of who will fall into the much larger “recent” category.

The massive amount of taxes they should be paying would aid in containing some of the escalating costs associated with public pensions. The retirees would actually help cover some of the burden that they and their peers have put on New York taxpayers. It should be noted that annual pension costs in New York have grown from $1.47 billion in 2001 to $15 billion today. The unfunded obligation (for future retirement disbursements) now stands at whopping $196 billion.

Ignoring all of the numbers, let’s just focus solely on the premise of fairness. The tax exemption on government pensions is the ultimate slap in the face to anyone who has ever worked in - and retired from - the private sector. The State is implying that a certain class of individual (its class) is more important and should be rewarded for it. It sounds foolish, but Albany is telling us a retiree who was a parks employee, social services provider, legislator or teacher had a harder career than did a factory worker, sales clerk, businessman, or doctor. They didn’t. And, neither did those other folks. Work is work, some jobs are tougher than others, but each and every one of them comes with its own joys and stresses and, certainly, its own value. It’s time Albany realized that and put an end to the unfair advantage granted its workforce and taxed them as equally as their neighbors who worked just as hard to appreciate their retirement.

Bob Confer is a Gasport resident and vice president of Confer Plastics Inc. in North Tonawanda. E-mail him at bobconfer@juno.com.

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This column originally ran in the 22 August 2011 Greater Niagara Newspapers

Social Security & Medicare really are entitlements

SOCIAL SECURITY & MEDICARE REALLY ARE ENTITLEMENTS
By Bob Confer

When the issue of cutting America’s two largest and most broken social welfare programs - Social Security and Medicare – was broached during the recent debt ceiling debate most Americans raised a considerable stink about it. Because of that, reform was never really tabled. It would have been political suicide for any representative or senator that dare force much-needed transformation of how we observe the Golden Years and peoples’ responsibility to prepare for it.

That’s because almost everyone to a man is under the assumption that it’s “their money”, they paid into the system and it’s coming back to them. Under that belief system, these aren’t entitlement programs. Maybe that’s a way that seniors and soon-to-be retirees kid themselves into believing they’re not collecting welfare from the government. More likely, though, it shows how we’ve been misled. In high school we were taught that President Roosevelt created Social Security to give us, as the name implies, security in our retirement years. The government would take some of our money and set it aside so that we could have access to it when we needed it for food, shelter, clothing and utilities during old age. We were told that President Johnson took that same route when his administration launched Medicare, taking and saving our money for our health coverage once we - or our providers - left the workforce for good. That message of alleged self-preservation continues throughout our adult lives as we are inundated with propaganda ranging from public service announcements to television ads to regular Social Security status reports.

It’s imperative that this be understood: Seniors and workers are only half right. For the most part they did pay into the system. But, it’s not their money coming back to them; it’s everyone else’s. Social Security and Medicare are entitlement programs and it’s foolhardy to think otherwise. From the start, those who were currently employed (and therefore seeing the respective taxes deducted from their checks) paid for the seniors.

Look no further than Ida May Fuller as the prefect example of this pyramid scheme in operation. She was the first person to receive monthly SSI payments. She worked for 3 years under the Social Security program, which first began collecting taxes in 1937. She paid a total of $24.75 into the system. Mrs. Fuller received her first check at age 65 in 1940. She subsequently lived to be 100, collecting $22,889 in the process, almost a thousandfold of what she had put into it.

Medicare showed a similar immediacy of disbursements without the alleged requisite financial investment: It was signed into law on July 30, 1965 and the first beneficiaries were able to sign-up for the program on July 1, 1966. It definitely wasn’t “their money” coming back to them.

We see this in effect so vividly today. The average annual Social Security benefit is now $14,000 and the typical Medicare recipient costs the government $12,000 per year. That means a normal retiree costs taxpayers $26,000 per year. Now, imagine that he or she lives another 2 decades to the ripe old age of 85, a realistic expectation. That brings the total cost to $520,000. If he or she lives as long as Mrs. Fuller was fortunate enough to, the total cost will be $910,00. In either case, the assumption that a retiree had contributed that much to those programs is completely implausible. For many individuals, it not even possible that they paid that much in total federal taxes (Social Security, Medicare, excise, and income taxes) over their working careers.

It’s obvious that neither system – or, more importantly, our nation – can survive like this, especially when one looks at the long-term implications. Medicare is facing $37.8 trillion in unfunded obligations while Social Security is saddled with $21.4 trillion of the same. We have to change these programs significantly before we dig ourselves a deeper, or more sudden, grave.

First, though, we have to get over the lie that we’ve been living, that these programs are our investment in our future. They aren’t. We’re funding welfare programs for the aged, while, especially for Generations X and Y, endangering our future. Such can be expected when placing too much reliance on government and not in self. Through mandated participation in retirement programs the government is basically implying we are too ignorant to plan for our own retirement needs. Are we really, or is it the government that’s most ignorant, putting our not only our Golden Years, but our working years as well, in peril?


Bob Confer is a Gasport resident and vice president of Confer Plastics Inc. in North Tonawanda. E-mail him at bobconfer@juno.com.


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This column originally ran in the 15 August 2011 Greater Niagara Newspapers

Political theater and the debt ceiling

POLITICAL THEATER AND THE DEBT CEILING
By Bob Confer

I wasn’t among the countless Americans who fell for the political theater when Gabby Giffords cast her “yea” vote for the raising of the debt ceiling. While many couldn’t see through their tears, I could see through the smokescreen and took it for what it was. It was a climactic moment much like you’d find in a Hollywood production and it was just as scripted as one. Washington higher-ups forced her appearance (against all good judgment) and wanted to paint it as something miraculous. By doing so, they were able to frame the debt debate in much the same way. There is no doubt this is how the spin was intended: Congress, which like Giffords was wounded by hate founded in disagreement, was able to overcome its injuries and forge a bipartisan agreement with Giffords-like resilience, saving our nation from certain death.

The analogy was quite the stretch, even for the spinmasters, but people bought it anyways! Most Americans were actually elated over the outcome of the debt machinations and they felt overcome with patriotism upon seeing Giffords. Even the national press fawned over the bill and her vote, calling everything historic.

Blinded by propaganda, most couldn’t see that it was not a fix for what ails us. Rather, it will only dig a deeper hole for America and spell certain doom for Generations X and Y.

Consider the following realities of Washington’s “miracle”:

The federal government is still spending beyond its means. This was a deficit reduction bill, not a deficit elimination bill. It will cut just $2.2 trillion in spending from 2011 to 2021. Earlier this year the Congressional Budget Office estimated a $9.5 trillion imbalance over the next decade. So, that leaves us with another $7.3 trillion that no one wants to address.

The bill focuses only on discretionary spending and, so far, ignores so-called mandatory spending which includes Social Security and Medicare. Our unfunded obligations to those broken entitlement programs are $15 trillion and $78 trillion respectively. It’s known that their trust funds (whether they actually exist to begin with) will be bankrupt within the next few decades. Despite that reality, Congress didn’t feel it was necessary to fix the problem now. Will they ever?

The bill added $2.4 trillion to our debt ceiling. That increase was the largest in our nation’s history, besting the $1.9 trillion increase passed by Congress in February of last year. That brings our total allowable debt (at least until the next vote) to just under $17 trillion.

Currently, our nation owes $14.6 trillion. There are a couple of ways to put that into perspective. First of all, let’s remember that this is our debt, we’re in it together. Every citizen owes $46,711. Looking at only those who contribute to society (pay taxes), it works out to be $130,243.

Secondly, let’s compare it to our overall economy. Our gross domestic product was $14.7 trillion in 2010. It’s risen only slightly this year and the fear is it will retract some over the next 12 months. Anyway you put it, our GDP and debt are nearly equal. We make as much as we owe. That would never fly in the real world (the private sector): No bank would loan, say, $14.6 million to a small business that has only $14.7 million in sales and poor regard for future obligations and an inability to change its cost structure.

The rest of the world is starting to see things that way. Immediately after the bill’s signing Chinese rating agencies downgraded our debt and tagged a negative outlook onto it. It’s tough when a communist country says you need to cut $4 trillion in spending over the next 5 years….especially when it’s the same communist country that holds a staggering $1.2 trillion in your debt.

Simply put: There’s absolutely nothing miraculous to be found in the deficit reduction bill. That’s what makes it so disgusting that the political machine used Ms. Giffords as a tool to somehow conceal – or make palatable – such fiscal misery. It’s even more disgusting that so many people fell for the political theater. Sadly, if the political playwrights continue to have their way, the final curtain will be closing on America this century.



Bob Confer is a Gasport resident and vice president of Confer Plastics Inc. in North Tonawanda. E-mail him at bobconfer@juno.com.


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This column originally ran in the 08 August 2011 Greater Niagara Newspapers

Tax credits and corporate welfare

TAX CREDITS AND CORPORATE WELFARE
By Bob Confer

Editor’s note: This is the last in a four-part series about how large corporations evade federal taxes and abuse US taxpayers.

While brainstorming ways by which to overcome the federal debt and future deficits, the US Senate’s Gang of Six came up with the suggestion that American workers give up, either partially or entirely, certain tax exemptions that cover mortgages, health insurance, retirement investing and charitable giving.

That’s all well and good. Income tax credits, incentives and the like aren’t good government due to their inherent unfairness. Some folks even classify them as a form of welfare. They are definitely a transfer of wealth because the Treasury has to overcome the lost revenues from the class of individual afforded financial advantage by transferring the burden of revenue to another.

But, what’s good for the goose is good for the gander. And, that’s where the Gang of Six goes wrong. It’s not surprising that while tearing into these long-held rewards for the middle class, they only briefly mentioned cutting “some” tax breaks for corporations and were non-specific about what those might be. Considering how specific they were about what benefits should end for individuals, their silence speaks volumes about how the balance of inequity tips further in the favor of the large corporations.

Such unfairness is grossly apparent in the case of General Electric. It was bad enough that GE paid no corporate tax on $5.1 billion in US profits in 2010 but, they also had the gall to claim a $3.2 billion tax credit from the federal government.

So, how do the big boys do it? What sorts of credits (corporate welfare) allow them to shed their responsibility to America? Well, here are just a very few of the many that exist in today’s Tax Code:

The Production Tax Credit offers a 2.2 cents per kilowatt-hour tax credit for the first 10 years of a wind farm project. Not surprisingly, this $5 billion giveaway is the only way windmills can produce electricity that’s actually price-competitive.

The Ethanol Tax Credit costs the US Treasury $6 billion per year. This credit is extended to blenders at a rate of 45 cents per gallon. The domino effect of this incentive is astounding, as it is complicit in rising prices at the grocery store as we substitute food corn for fuel corn.

The Research and Development Tax Credit has been around since 1981 and gives US manufacturers and pharmaceutical companies a supposed edge by allowing them to write off many facets of the engineering process. It keeps from the US Treasury $7 billion annually. One cannot help but look at the credit with concern over its unfairness: Why favor R&D when it’s a normal – and required - part of doing business, just as sales and marketing are?

The Domestic Manufacturing Tax Credit, given as a gift to the oil industry by the Bush Administration, allows oil companies to deduct 9% of their income from extraction done in US land or water. That seven-year-old credit saves oil companies $1.8 billion per year. Once again this highlights the injustice of tax credits: Unlike a factory, oil fields cannot be moved overseas, so why afford only them such a benefit?

Then there’s the highly unusual Percentage Depletion Allowance that was created in the 1930s. It allows oil companies to consider oil in the ground as capital equipment (not a natural resource) and they can write off its anticipated depletion. This saves the oil industry $1 billion per year. Imagine if landowners asked to do this with their forests or farmers their soils. It just doesn’t make sense to write-off Mother Nature.

So, just like that, we have more than $20 billion in savings in only a hand full of credits. If we analyzed the thousands of them on the books the total would be staggering, it’s in the hundreds of billions per year.

The system is so broken that BP claimed a $9.9 billion tax credit on its Gulf spill; yes, the same one that cost federal and state governments billions of dollars to mitigate, put thousands of coastal people out of work, and deeply affected the wildlife of the region.

If a corporation can be rewarded for a disaster it created, it is no wonder that our nation is in a fiscal disaster…Uncle Sam allows that same destructive behavior with our finances. Large corporations are afforded undue benefit by our government, and the strain that places on small businesses and individuals is too great to support our nation for the long haul.

Bob Confer is a Gasport resident and vice president of Confer Plastics Inc. in North Tonawanda. E-mail him at bobconfer@juno.com.


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This column originally ran in the 01 August 2011 Greater Niagara Newspapers

THE GOVERNMENT: A CORPORATION’S BEST FRIEND

THE GOVERNMENT: A CORPORATION’S BEST FRIEND
By Bob Confer

Editor’s note: This is the third in a four-part series about how large corporations evade federal taxes and abuse US taxpayers.


Countless small businesses like mine devote an incredible amount of time and money to ensuring tax compliance. From internal checks and balances to the utilization of outside accounting firms, we all dot our “Is” and cross our “Ts” whilst we record and pay our annual and periodic taxes. Even then, no matter how exacting we may be in the details, it seems like the threat of a federal audit always lingers. The mere mention of the IRS sends chills up a businessperson’s spine.

The above paragraph can be equally applied to individuals. Most of the people reading this newspaper dutifully file their annual tax returns and other than some of the more obvious tax credits do little to stray from paying nearly the full amount in taxes. Truth is the basis of their returns. It’s the legal and moral thing to do and most folks fear the repercussions of being caught in a mistruth.

Large corporations, on the other hand, don’t seem to live in the same world that you, I, Confer Plastics and the local barber shop do. They stretch the very definition of tax compliance and do everything within their power to evade paying taxes, despite great profits that demand the contrary. They know the intricacies of the tax system and the myriad strange loopholes.

From this, the questions have always been: How do they know about all of these loopholes? How do they weave these webs of legal (and I use the term “legal” quite loosely) deceit? Where’s the IRS?

The answers are quite simple and singularly identified: The government is their friend.

Whereas we respect and/or fear the IRS, they look at it as its closest ally. As a matter of fact, they look at the IRS as their best source of talent. Who better to beat the system than those who made a career out of being a part of it? IRS agents and auditors – more so than any accountant ever could - best know the tricks of the trade and what worked for other corporations that were successful in abandoning their responsibilities. Tax cheat GE, for example, employs nearly 1,000 people in its tax department alone, most of them former government employees.

The strange bedfellows don’t end there. The corporations were allowed to help make – if not outright craft - the rules that seem to be made just for them. They were the ones appointed to special committees and agencies or who, thanks to huge donations, were given special audience and influence with the elected officials. In the 9 months leading up to the bailouts in 2008, 19 banks spent $32.4 million on lobbying. 2010 was even worse: The top 19 banks spent just under $49 million.

Supporters of the “free markets” will cite the secret backdoor workings of tax law or the hiring of IRS agents and the use of their intellect to help their employer beat the Taxman as good business. If they do, they’ve been drinking Wall Street’s Kool-Aid. I’m a staunch supporter of truly free markets and I know a free market when I see one, and the market that GE, the oil companies and the financial institutions operate in is certainly not free. It’s fascist, which puts the greatest power in the hands of the few, which is just as bad as the socialist economy Corporate America says Obama is driving us to.

At its macro level ours is marketplace where the government hands to the few large companies special privileges over the small ones. Among them is a tax system that accommodates those with the vastest resources and the least amount of morality. They don’t have to pay the economy’s “user’s fee” (tax) like us little guys do. That can, in part, account for the statistical absence of big companies - 500 or more employees - in the United States (less than 1% of all firms). There are barriers of entry (specifically, competitive disadvantages) to the next level of the marketplace that most cannot overcome.

Yes, Corporatism is alive and well in America. That, in conjunction with an oversized federal government, is exactly what’s stifling honest-to-goodness laissez-faire capitalism in this post-recession era and creating a cancer within our nation’s fiscal health. Obviously, if large corporations actually paid taxes the little guys would be equally competitive and we as a nation might not be obsessing about the debt ceiling right now.

Bob Confer is a Gasport resident and vice president of Confer Plastics Inc. in North Tonawanda. E-mail him at bobconfer@juno.com.

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This column originally ran in the 25 July 2011 Greater Niagara Newspapers

Department of Transportation Sets Sights on Farmers' and States' Rights

Department of Transportation Sets Sights on Farmers' and States' Rights
By Bob Confer

The federal government just can’t stay out of agriculture. From subsidy programs that decide winners and losers in the markets by favoring corporate farms over family farms to ethanol rules that sacrifice food for fuel to laws that give undue influence and power to a select few pesticide and seed producers, Washington has maintained a stranglehold over farming that has forever altered the industry’s competitive landscape and doomed consumers to pay ever-higher prices at the grocery store.

It wants even more power. Now, another assault comes from the Capitol and the unlikeliest of agencies: the Federal Motor Carrier Safety Administration, an arm of the Department of Transportation. The DOT/FMCSA has new standards currently in the public comment period that, were they to become law, would override states’ rights — and the rights of the individual farmer — and have a detrimental impact on how business is done.

First and foremost, the DOT wants to reclassify farm vehicles and implements — everything from tractors to cattle haulers — as Commercial Motorized Vehicles (CMVs), which would then mandate all farm workers to meet the same set of requirements that over-the-road truck drivers do. Farmers would have to acquire a Commercial Drivers License (CDL), display DOT numbers, track mileage, limit hours worked, and maintain health cards while farms would have to monitor all of the above and pay highway use taxes (and probably higher insurance rates).

The regulatory burden is daunting. According to the Bureau of Labor Statistics, there are more than 800,000 farm workers in the United States; 24,000 of them are considered Agricultural Equipment Operators, whose primary responsibilities are to drive and control farm equipment to till soil and to plant, cultivate, and harvest crops. But if you’ve ever been around a farm, you know that number is under-reported, for it ignores those who dabble in the use of equipment as required by their job and the task at hand. Many agricultural employees, at one time or another, operate tractors and other heavy equipment. Even in a labor-intensive environment (such as fruit-picking or dairy), motorized equipment is utilized every minute of every day to get people, product, and resources from Point A to Point B or tend the health of the plants or animals. It wouldn’t be stretch to say one-fifth of all farm workers at one time or another drive farm machinery. That’s 160,000 people — and their countless employers — nationwide who would suddenly fall under the bureaucratic umbrella of the federal government and the state governments charged with enforcing the new regulations.

As a necessary cost of doing business, farms would probably pay for their workers to earn their CDLs because there is a shortage (in both the short-term and long-term) of licensed drivers across the country, as government-run schools and popular culture have driven youth away from skilled and vocational trades. The national average for such a course is $3,000. So applied to the 160,000 estimated affected workers, that’s a bill of $480 million. This would probably not be one-time cost, either. A farm owner has no guarantee that his employee will work for him long-term after making that sizable investment in him. Even the Bureau of Labor Statistics admits the following about farm employment on its website, “Job openings should be plentiful because of relatively large numbers of workers who leave these jobs for other occupations. This is especially true for jobs as agricultural equipment operators, and crop, greenhouse, and nursery farmworkers.”

The CDL cost would be wealth-transfer, taking money from agriculture (actually, the consumers who would be paying for the higher overhead) and giving it to others. Other similar expenses would be incurred as well. Insurance, health exams, recordkeeping, licenses, and taxes are not free.

Legally and constitutionally, this regulatory activity should be off-limits to the DOT and left in the hands of the states since all farming activities occur within a state’s borders and nothing of it comprises interstate trade — most goods are sold in roadside stands and local markets or to large processors (national direct-to-consumer sales are incredibly rare).

So, just how does the DOT plan to stake its claims over tractors and haulers and get around the unconstitutionality of these new standards? By reclassifying the farming trade.

Basically, the DOT plans to identify all agricultural commodities delivered to a processor as “interstate commerce” because there exists the chance that the crop might eventually leave the state. That’s an incredibly dangerous undertaking, for it will affect far more than drivers’ licenses: This one, simple change would allow all federal agencies to override local, state, and personal oversight of farms. The federal government would have full jurisdiction and the ability to micromanage farms’ day-to-day activities and practices. Certain to be instituted would be long-simmering federal bills that would mandate the use of farmland based on a supposed importance of the environment or require the tracking of all farming inputs and activities to supposedly prevent outbreaks of E. coli and the like.

The public comment period for these pending transportation rules changes is set to expire at the end of this month. It is hoped that the farming industry and constitutionalists everywhere come out in numbers, voicing their displeasure over such measures. If they don’t, and the DOT is allowed to run roughshod over state’s rights, the very definition of federal power will change when it comes to how, why, and by whom our food is produced.

Once the federal government has total control over agriculture, the cost to farm will likely be utterly astronomical and, likewise, so will be the cost to feed and clothe a family. What can and will happen will make the CDL requirement look like a walk in the park. If that one measure can affect the markets to the tune of just under a half billion dollars, imagine what else Uncle Sam could do with an array of regulations similarly — if not far more — damaging.

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Originally appeared in the 18 July 2011 The New American at:

http://www.thenewamerican.com/opinion/950-bob-confer/8255-department-of-transportation-sets-sights-on-farmers-and-states-rights

Overseas tax havens

OVERSEAS TAX HAVENS
By Bob Confer

Editor’s note: This is the second in a four-part series about how large corporations evade federal taxes and abuse US taxpayers.

US corporations evade paying taxes by setting up shop in the Cayman Islands.

That has been said so often by so many people that it almost seems to be an urban legend.
It’s not.

The Cayman Islands is home to countless American corporations. As a matter of fact, the true number is unknown because Cayman laws ensure complete secrecy for financial transactions and it is virtually impossible for any foreign government to investigate the goings-on of any company, even those that undoubtedly have the greatest percentage of their operations within the inquiring home country.

The numbers that are known are pretty staggering. The nation of 47,000 people has 2 corporations for every resident and a mutual fund for every 5. Merrill Lynch alone has 158 subsidiaries in the Cayman Islands. One address – the Ugland House in Georgetown – is home to 19,000 corporations, 9,000 of which are American. It is no larger than a resort hotel so, obviously, those 19,000 companies don’t do business there. Instead, they simply use it as a legal address and mailing address as a sort of claim for Cayman residency.

The Cayman Islands aren’t the only tax haven on Earth. Other commonly-used nations are Bermuda, Liechtenstein, Monaco, and the Bahamas. All of them have one thing in common: They have low or no corporate taxes. US firms set-up shop (or at least say they do) in these places via subsidiaries through which are funneled impressive amounts of financial activity, mostly through the nebulous ether of accounting records. Since that corporation is supposedly headquartered in the haven (although business is actually done elsewhere), the US government cannot collect a tax on it as the subsidiary is not a “citizen” of our country. It’s a simple shuffling of papers that prevents Corporate America from paying an untold amount (at least $70 billion) into federal coffers every year.

Among the biggest abusers of the tax haven loophole are the Wall Street financial institutions. 83 of the 100 largest banks in the United States support subsidiaries in tax havens around the world. In 2008, Bank of America, Citigroup and Morgan Stanley each sported more than 100 such operations.

Ironically, these banks are among the Wall Street corporations that were awarded $700 billion in taxpayer money from the first bailout of the recession. Think about the hypocrisy of that: Banking execs made lucrative careers out of not fulfilling their tax obligations to the American people, yet, when things got tough they were the first in line to beg for US tax dollars. They were determined to take from a system that they did not give to. Unfortunately, Washington officials were more than happy to oblige, adding merit to the ongoing evasion of taxes.

It should be noted that another corporation that savored government salvation (and somehow avoided public disdain) - General Motors - was a tax cheat, too. Prior to its collapse and the government buy-out, GM had 11 offshore subsidiaries while its financing operations had two offshore units. The government bent over backwards to save General Motors with our money on the basis that the company was 100% American. It’s obvious it wasn’t living up that mystique (or slick advertising).

Similarly, most large corporations aren’t living up to their responsibility to the American people. By seeking out tax havens and getting away with not actually doing business there, they are forcing the American working class and small businesses to pay for, among other things, the roads that corporations’ goods ship on or the public schools and colleges that create the workers used by those companies.

It’s a travesty. You and I can’t set-up a post office box in the Cayman Islands, renounce our American citizenship and at the same time maintain it so we don’t have to pay an income tax while living and working in the US. Yet, that’s what thousands of corporations are doing. It’s high time we demanded the closure of this loophole and forced those companies into choosing what nation they have their strongest – and actual - allegiance to by identifying where their actual work is being done.

Bob Confer is a Gasport resident and vice president of Confer Plastics Inc. in North Tonawanda. E-mail him at bobconfer@juno.com.

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This column originally ran in the 18 July 2011 Greater Niagara Newspapers

Entitlements: a declaration of dependence

ENTITLEMENTS: A DECLARATION OF DEPENDENCE
By Bob Confer

Last week saw the observance of the quintessential American holiday — our Independence Day. From coast to coast Americans celebrated with their usual vigor the greatness that is the United States. Sadly, much of that patriotism was not based on true Americanism. Instead, for a majority of our citizens, the vision of what America has been, is, and will be is but a mutation of what our nation is supposed to be about.

In its simplest terms — terms most believed by those who were intellectually raised on a diet of mainstream media and government schools — July 4 celebrates the independence that our Founding Fathers achieved from the British in 1776. But it’s much deeper than that. When they cut ties with the motherland, John Adams, Benjamin Franklin, Thomas Jefferson, and the other signers of the Declaration of Independence were also cutting ties — then and for the future — from onerous forms of government. They were founding a nation, perchance heaven on Earth, based on the basic yet so magnificent premise that "all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness."

The Founding Fathers believed that we as individuals were just as independent as our embryonic nation was from Great Britain. Our singular destinies — and thus collectively, the destiny of America — were based in self-determination. We — not the government — were to decide how we lived our lives. The new form of self-rule that they were devising at the time (which was so eloquently defined by the Constitution 11 years later) ensured that government was an object of and by the people (the states formed the federal government, not vice versa), and was there only to provide for an environment that guaranteed our natural rights and ensured that no one, not even the government itself, infringed upon those rights and prevented anyone from pursuing his life’s dreams.

The times have changed, however. Many of the same Americans who last week celebrated our formative document and its philosophies have willingly decided to abandon those tenets. They clamor for a form of government that our nation won its freedom from. Slowly but surely, even subconsciously, they have declared their dependence. They want a ruling body that will do more than create and execute the rule of law. They want and need a ruling body that will provide for their everyday comforts — one that, in defiance of the Declaration of Independence, will not allow the pursuit of Happiness but rather will issue Happiness, or at least a sickeningly limited version of it.

Look no further than two entitlement programs, which, thanks to the advances of modern science and its impact on the length of our lifespan, have the potential to be the bedrock and subsistence for one-third of our lives. Since these programs were introduced in 1935 (Social Security) and 1965 (Medicare), Americans have grown to believe they absolutely cannot live without them in their golden years. They want government, and essentially the people and businesses it robs from, to give them the income and healthcare they need to survive as they age — things they should have been planning for in their early working years.

This dependence has been made grossly apparent by public sentiment in recent months. As Congress and the White House have duked it out over short-term deficits and the long-term solvency of our nation, some of the more conservative Republicans have called for cuts in or complete overhauls of these programs. In a perfect world (at least that dreamed of by those of us who actually believe in our founding principles), these unconstitutional monstrosities would be ended. But such thoughts are considered “fringe” or “dangerous” by the masses, because most Americans, despite the well-known financial flaws of Social Security and Medicare, want them left as is. Even ardent Republicans view any modification, no matter how slight, as an atrocity. An AP poll conducted in May verified this: 54 percent of Americans thought Social Security should be left alone while nearly 60 percent felt the same about Medicare.

Such surveys are not a frightening mirage. Proof of their basis could be found in the May special election for New York’s 26th Congressional District where Democrat Kathy Hochul handily won the historically Republican seat because she emphasized that Medicare was vitally important and her opponent’s plans to modify it were an affront to the people of her district.

It’s obvious that the majority don’t value independence. Last week they should have locked their doors and stayed away from any and all of the July 4 festivities. Celebrating as they did was a display of total hypocrisy.

If they truly believed in what the day stands for, they should be demanding that the government get out of the retirement business and put an end to the taxes it extracts from productive sectors of the economy in an effort to make entitlement programs work. This would allow every one of us to pursue Happiness as we see fit.

Isn’t that what America — and independence — is all about?

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Originally appeared in the 11 July 2011 The New American at:

http://thenewamerican.com/opinion/950-bob-confer/8165-entitlements-a-declaration-of-dependence

The taxation obligation

THE TAXATION OBLIGATION
By Bob Confer

Editor’s note: This is the first in a four-part series about how large corporations evade federal taxes and abuse US taxpayers.

Long time readers of this column know that I personally despise federal income taxes. But for as much as I complain about them I also understand that I have a legal and moral responsibility to pay them. I know that we could not do without constitutionally-authorized expenditures such as national defense.

Professionally, I feel the same way. My business has an obligation to pay Uncle Sam hundreds of thousands of dollars every year because that investment ensures that we have, among other things, the roads upon which our products are transported and the courts which protect our intellectual property. Taxes are at once a necessary evil and an immeasurable benefit. It’s our duty to pay them.

Most businesspeople feel the same way. I say “most” because, according to the Small Business Administration, 99.7% of all employers are small businesses, enterprises owned by regular folks like you and me, people who operate local markets, cafes, and machine shops and understand the American Dream and the give-and-take required to fulfill that dream. Small businesses couldn’t do it without government and vice-versa.

It’s some of that other 0.3% (the large corporations) which, by association, give all corporations a bad name. It’s many of those behemoth entities that see an American marketplace ripe for the picking yet - through countless loopholes that cater to them specifically - don’t provide the necessary nourishment for that garden of plenty.

Take General Electric for example, well known as a tax evader without peer. In 2010 the company had $5.1 billion in US profits but didn’t pay a single cent in federal taxes. As a matter of fact, they had the audacity to claim a $3.2 billion tax credit.

They weren’t alone in this abuse. Some other businesses pulled off tax avoidance in recent profitable years, among them ExxonMobil and Chevron. It should be noted, interestingly enough, that one large corporation routinely derided as being “un-American” has done a fine job of living up to its end of the bargain to the American people. In 2009, for example, Wal-Mart paid $5.3 billion in federal taxes.

More giants should follow Wal-Mart’s lead. After all, it’s only fair. Confer Plastics has to pay a federal tax, as do all those businesses on Main Street in your hometown. And, so do you and me. So, why shouldn’t – and why don’t - the Big Boys? Where is the justice in our tax system?

It is questions like those that need answering and correction immediately. Unless you’ve been living under a rock, you know America is in some dire straits. Not only is our government still reeling from a lifestyle of overspending made painfully obvious by the Great Recession, but also, Social Security and Medicare are on their deathbeds. With the Washington political class still as lacking in backbone as ever to make necessary cuts to federal spending and a majority of Americans so grossly addicted to entitlement programs, the talk has been in the Capitol that taxes should be raised, whether through corporate taxes, the income tax or those nefarious payroll taxes that somehow slip under everyone’s radar.

The sights need to be trained elsewhere; why attack the people and small businesses? For all that talk about raising taxes, no one in the halls of Congress has really been serious about closing loopholes and instead fixing our tax laws to collect the hundreds of billions from the giant corporations who don’t see corporate citizenship as actual citizenship. Oh, they may talk a good game, but it’s all bark and no bite. President Obama is especially guilty of that, blasting tax avoidance while appointing GE’s Jeffery Immelt as the head of his Council on Jobs and Competitiveness (heck, I’d be an expert on job creation, too, if somehow we didn’t have to pay a corporate tax).

Over the next three columns I will be analyzing some of the ways that the “evil corporations” (not us good ones) evade their tax obligations, hopefully giving you the reader the insight necessary to contact your Senator and Congressperson about what needs to be done to ensure everyone pays their fair share.



Bob Confer is a Gasport resident and vice president of Confer Plastics Inc. in North Tonawanda. E-mail him at bobconfer@juno.com.


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This column originally ran in the 11 July 2011 Greater Niagara Newspapers