Monday, June 20, 2011

A slippery slope to equality

There is an Indian fable about two quarreling cats and a monkey. The cats are fighting over a treat when a monkey offers to help out by splitting the treat into two equal parts for them. He brings out a weighing scale, cuts the treat into two, and places each part in a pan. Finding that one part is slightly heavier than the other, the monkey bites off a little chunk to make them equal. Sure enough, the other part is now heavier, so he takes a small bite off the other. And so on, till he finishes the entire treat himself before the cats know what is going on.

Large, centralized governments are like the shrewd monkey. Their quests for equality only make them fatter.

Instances of the slippery slope to equality are numerous. Corn ethanol producers want subsidies because the oil industry has it. Now soy growers want it too because the corn/growers have an unfair advantage. That immediately raises the rent on land that wind farms operate on, so they want a break too. The solar lobby clamors for a subsidy since they are now at a disadvantage. Coming a full circle, the oil industry now wants another break since the subsidies are now too much in favor of other energy sources. And so on goes the downwards spiral.

One prospective sled sitting on the slippery slope to equality is a bill in the U.S. Congress (H.R.1834) that is proposing to give American multinational companies a repatriation tax holiday so they can bring in billions earned worldwide back home while paying little taxes. Proponents such as Google, Apple and a host of other companies claim that up to $1 trillion in earnings are sitting outside the country, waiting for a tax holiday. Duke Energy CEO Jim Rogers tugs at our heart-strings by telling us that all this money is "trapped overseas" (awww, poor money) by punitive federal tax laws.

Of course, the backbone of the argument for this tax holiday is that the money coming in will help spur new jobs and help the economy. Remember what this smells like? The bank bailouts, which were supposed to help the economy and people and not the banks themselves. Once the bailouts were done with, people said "if you bailed out the banks, why not us?". Once the corporations have their tax holiday, guess who will be asking for it next?

And so it goes on...

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