Chapter 4: Convert corporations to co-ops; abolish tax evasion by inversion
The questions concerning the safety of banks that are too big to fail apply to any vast corporation: Are they not only too big to manage but too big to police? In the same way that we have to acknowledge the cognitive limits of our minds, we need to accept the effective limits of organizations and, when they get too big to manage, break them up.
–Margaret Heffernan, Willful Blindness
THE CAPITALIST FREE MARKET CORRECTION ACT (CaFMaC)
* * CaFMaC Fixes [almost] Everything * *
Section 6. (of the Capitalist Free Market Corrections Act – CaFMaC)
Plain English for the Voting Citizen: 1) Every corporation that’s “too big to fail” is going to be chopped up into smaller pieces that won’t harm everybody if they do fail. 2) The pieces will all have new names that don’t relate to the old corporate name. 3) Not one of these pieces will be allowed to control more than five percent of the United States market for whatever it is that they sell. This is called the Five Percent Rule, and it is holy.
The Congressional blather version: Beginning one hundred eighty (180) days after enactment of this legislation, and being completed within six (6) months thereafter, all corporations and organizations designated too big to fail shall be expeditiously subdivided into two or more new entities, as applicable, such that none of the new entities shall control more than five percent (5%) of any sector(s) of the market segment(s) within the United States, its territories and possessions, for the commodity(s) or service(s) in which it or they deal(s), sell(s) or trade(s). Every organization so brought into existence as a result of subdivision of a larger entity under this Five Percent Rule shall receive a new name which bears no resemblance or semantic relationship to the name of the larger entity so divided.
Section 7. (of the Capitalist Free Market Corrections Act – CaFMaC)
Plain English for the Voting Citizen: 1) All other corporations which control five percent or more of any sector of the U.S. market will be identified and listed, even if they’re not monopolies or too-big-to-fail. This includes corporations chartered in the USA, foreign-owned corporations, and corporations hiding their ownership by putting their “headquarters” in small island nations and other sneaky hideaways to get out of paying their U.S. taxes. 2) No U.S. corporation will be allowed to move out of the USA in order to avoid the justice it sees coming.
The Congressional blather version: Within one (1) year after enactment of this legislation the Department of Commerce, fully supported by the Internal Revenue Service, shall systematically identify every other corporation, corporate subsidiary, holding company, organization and business entity of every other nature whatsoever, including unincorporated sole ownerships and partnerships, howsoever organized, named, identified or defined, including but not limited to foreign-owned or international corporations and business entities of unclear national registry, whether domestically-owned or partially-domestically-owned and operating under foreign registration, that is engaged in business within the United States, its territories and possessions, and which controls five percent (5%) or more of any (meaning any and every) sector(s) of the market segment within the United States for the commodity(s) or service(s) in which it or they deal(s), sell(s) or trade(s), shall notify said organizations that they have been so identified, and shall provide to the Congress and to the public media a list of all corporations, organizations and entities so identified. During this year and for six (6) months specified in Section 8, every domestic corporation and organization of every nature whatsoever shall be prohibited from moving its headquarters, and/or its facilities of any nature, outside of the United States, its territories or possessions.
Section 8. (of the Capitalist Free Market Corrections Act – CaFMaC)
Plain English for the Voting Citizen: 1) Every corporation that controls five percent or more of any sector of the U.S. market will be broken up into smaller pieces, none of which may dominate as much as five percent of the U.S. market, and the pieces will all have new names. 2) Forevermore, any business organization that works its way up to controlling five percent of the U.S. market will be immediately subdivided again so it doesn’t. Anybody caught hiding the truth about reaching five percent will have hell to pay. 3) “Limited liability” corporations will be first in line for the breaking up, because claiming not to be fully liable for real or possible wrongdoings is a dead idea in the new USA. 4) Also first in line will be disloyal U.S. corporations that avoided paying their U.S. taxes by moving their headquarters to low-tax foreign nations while continuing to sell like gangbusters inside the USA to loyal tax-paying American citizens.
The Congressional blather version: Within the subsequent six (6) months, all corporations, other organizations and entities identified and listed as controlling five percent (5%) or more of any sector(s) of the market segment within the United States for the commodity(s) or service(s) in which they respectively deal, sell or trade, which have not been previously subdivided, shall be expeditiously subdivided into two or more new entities, as applicable, such that no new entity so created shall control more than five percent (5%) of any sector(s) of the market segment within the United States for the commodity(s) or service(s) in which it deals, sells or trades, and each such new entity shall be ne-named with a new name which bears no resemblance or semantic relationship to the name of the larger entity so divided.
Perpetually thereafter any organization which, having been so subdivided, may again grow to control more than five percent (5%) of any sector(s) of the market segment within the United States for the commodity(s) or service(s) in which it deals, sells or trades shall immediately be subdivided into two equal new parts so that neither of the two new entities shall control more than five percent (5%) of any sector(s) of the market segment within the United States for the commodity(s) or service(s) in which they respectively choose to deal, sell or trade. Any person convicted of concealing data with intent to evade this Five Percent Rule shall be sentenced to not less than two (2) years in Gambling School.
Implementation of this Section shall begin with 1) corporations self-identifying as having allegedly “limited liability” (LLC) in order to disclaim full responsibility for the actions they take as corporate wholes or for the actions of their officers and employees who represent them, and 2) the dozens of so-called “tax inversion” corporations which have placed their unpatriotic motives and disloyal sentiments on public display, deliberately acting to avoid paying their fair share of U.S. taxes, renouncing U.S. allegiance by moving a pseudo-headquarters to a much lower taxing nation, either by physical relocation or by merger, while continuing to operate their material and vastly profitable operations inside the United States, a few examples of this fast-growing trend being:
- Pfizer to Ireland
- Apple to Ireland
- Burger King to Canada
- Medtronic to Ireland
- Chiquita to Ireland
- Transocean to Switzerland
- Ingersoll-Rand to Bermuda
- Fruit of the Loom to the Cayman Islands
- Helen of Troy to Bermuda
(NOTE: View a long list at http://apps.washingtonpost.com/g/page/business/american-companies-that-have-incorporated-overseas/1238/; for more, google on “tax inversion corporations.” View these sites again when preparing your own personal income taxes.)
SUMMARY of Sections 6-8
Plain English for the Voting Citizen: 1) Congress intends to put a permanent stop to more and more American citizens being at risk of impoverishment simply because big out-of-control corporations grow to gargantuan size, control American markets and jack up the prices we all have to pay for basic food, clothing and shelter – living costs that aren’t even noticed by rich corporate lords. 2) And we’re going to re-define “loyal American” to exclude corporations and their super-rich barons who avoid paying their fair share of U.S. taxes and thereby force their taxes to be paid by hard-working poor and middle-class Americans who earn a tiny fraction of the mega-salaries undeservedly lavished on the corporate barons who make the decisions to avoid paying taxes.
The Congressional blather version: With these three measures it is the intent of Congress to end the tendency of corporations and a few other entities to grow to unreasonably large size, to then dominate and eliminate competitors and thereby monopolize large sectors of the U.S. marketplace, and to thus, in consequence of their dominance and/or their failure, pose unnecessary risk to all U.S. citizens’ economic wellbeing and to the U.S. economy; to sustain and promote genuine free-market competition, and to nip in the bud, as they arise, any and all circumstances detrimental to bona fide free-market competition, for the purpose of restraining, to affordable and reasonable levels, the prices that U.S. citizens rich and poor alike must pay for basic living needs including food, clothing, shelter and health care, not to mention a tad of savings and a little fun; to stem the rising tide of disloyalty shown by U.S. corporations ostensibly moving to lower-tax nations to avoid their fair share of U.S. taxes measured in billions of dollars; to cease and desist their shifting of these billions of tax dollars onto the real citizens to pay as an undeserved and misplaced obligation, and their dishonorable absence of corporate patriotism to the United States wherein they grew up and got rich; to recognize and promote the enormous unfulfilled potential for tens of thousands of small U.S. entrepreneurs already well under the five percent (5%) limit to grow to hundreds of thousands by eliminating large-corporations’ inherent barriers to the dynamic small-owner entrepreneurial spirit; and to protect the common good of the nation and equal treatment and opportunity for all U.S. citizens.
The problem with traditional economics is that it has made things too simple and then compounded the error by treating the oversimplification as gospel. The bedrock assumption of traditional economic theory is that markets are perfectly efficient and therefore self-correcting. This “efficient market hypothesis” is hard to square with intuition and reality. And yet, like a dead hand on the wheel, the efficient market hypothesis still drives everything in economic policymaking.
Eric Liu and Nick Hanauer, The Gardens of Democracy
Section 9. (of the Capitalist Free Market Corrections Act – CaFMaC)
Plain English for the Voting Citizen: 1) Every new piece of a broken-up former corporation will be turned into a co-op. These new small co-ops will replace all (meaning ALL) big American corporations. 2) This great conversion will be named in tribute to Franklin Roosevelt’s New Deal which saved the nation by creating thousands of good new jobs where unemployed Americans could go back to work and earn a living wage.
The Congressional blather version: All new organizational entities formed pursuant to the Five Percent Rule shall be chartered as New Ideal Public Service (NIPS) Cooperatives, hereinafter called “co-ops.” This universal conversion of corporations to cooperatives throughout the United States, its territories and possessions shall be known as the Great Corporations-to-Cooperatives Initiative (GCCI).
Section 10. (of the Capitalist Free Market Corrections Act – CaFMaC)
Plain English for the Voting Citizen: 1) From now on, new business startups in the USA may be co-ops or privately-owned entrepreneurships, not corporations. 2) None will be allowed to control more than five percent of the U.S. market for any commodity.
The Congressional blather version: Upon enactment of this legislation, no entity newly formed or forming with intent to engage in selling or trading commercial goods or services of any nature within the United States, its territories and possessions, shall exist as other than a co-op, with the sole exception of sole ownerships and partnerships that are unincorporated and entrepreneurial in nature and which wish to competitively offer their goods and services in the U.S. marketplace, provided that such sole ownerships and partnerships shall be equally subject to the universal five percent (5%) market limitation rule.
Section 11. (of the Capitalist Free Market Corrections Act – CaFMaC)
Plain English for the Voting Citizen: 1) All corporations remaining after all this – small, medium, whatever – will be turned into co-ops. 2) Corporations will be dead in the USA and trying to start a new one will be against the law.
The Congressional blather version: Any remaining corporations which, three (3) years after the enactment date of this legislation, are still operating as corporations in the United States, if any, even if with less than five percent (5%) share of any sector of the U.S. economy, shall be expeditiously converted to co-ops, and thereafter formation or attempted formation of a corporation within the United States, its territories or possessions shall be a felony.
SUMMARY of Sections 9-11
Plain English for the Voting Citizen: 1) Congress intends to eliminate the abuse and financial exploitation of American citizens by corporations. 2) Big corporations will be replaced by size-limited co-ops which create thousands of good-paying new jobs and naturally promote the nation’s common good through both competition and cooperation. 3) Corporate outrages have gone on through the nation’s entire history because of the very way corporations must behave – they have to grow ever bigger, they have to pay dividends to their investors, and they have to chinch on paying their employees enough to live on. 4) Our Constitution does not mention corporations and nothing says they’re the only way we can do business in the USA. 5) Even Adam Smith, the father of economics, warned against the deep abuses that inevitably arise when governments fail to control corporations, but of course that part of Smith’s message gets ignored by the few people at the top who get filthy rich off their corporations.
The Congressional blather version: With these three measures, pursuant to ending the abuses, selfishness, greed and resultant human suffering inherent to and endlessly demonstrated with great frequency over recent centuries by the loose-cannon “corporation” model, it is the intent of Congress to promote, to the benefit of the common good of the nation and of equal treatment and opportunity for all U.S. citizens, a size-limited and highly entrepreneurial co-op model of commerce, industry and enterprise which combines the best time proven features of both cooperation and competition, as advocated by founding father Benjamin Franklin and as emphasized and predicted by his contemporary, the father of economics Adam Smith, in his great work The Wealth of Nations, most contents of which, though completely averse to the excesses of modern fundamentalist free-market capitalism, remain unread by modern capitalmongers who self servingly focus only on its surpassingly insignificant “invisible hand” nonsense and completely ignore Smith’s more sensible advice, including his great masterpiece A Theory of Moral Sentiments which leaves no doubt that cooperation is the genuine foundation of genuine prosperity.
Congress hereby acknowledges 1) that corporations should no more be blamed for growing huge, becoming corrupt and harming people by their excesses than should hogs for rooting – it’s what they do; 2) that economic corporations are neither mentioned nor implied in our political Constitution, thus merit no (meaning no) protection or special considerations under either laws or judicial decisions pursuant to implementing or upholding the Constitution; 3) that corporate charters are inherently limited, are a privilege and not a right, and may be summarily revoked; 4) that corporations, operating under a wholly artificial status as if they were human “persons,” which status was bogusly assigned to them in 1886 by an ideology-bound rogue clerk of the U.S. Supreme Court, may be “bought, owned and sold,” which conditions are expressly forbidden for all “persons” under the slavery prohibitions of the Thirteenth Amendment to the Constitution; and 5) that Congress inherently possesses Constitutional authority both to abolish and to forbid the creation of the artificial constructs called corporations by any level of government in the United States. That inherent authority is hereby exercised.
[W]hen it comes to solving a systemic problem, there are dozens of roadblocks. Among these roadblocks, profit – not technology – is one of the biggest. …I have witnessed one healthy technology after another fall by the wayside because the financial upside simply wasn’t large enough to attract funding. …There’s no doubt about it, in the twenty-first century, profitability has become the most powerful barometer of legitimacy.
Rebecca Costa, The Watchman’s Rattle
Section 12. (of the Capitalist Free Market Corrections Act – CaFMaC)
Plain English for the Voting Citizen: 1) We’re going to stop siphoning profit away from American businesses and giving it to the already-rich. 2) All that “vanishing profit” will now become “surplus income” which stays in the co-op where it will be used to 3) pay living-wage salaries to all employees as well as 4) re-invested in the co-op’s future strength and business viability.
The Congressional blather version: Effective upon enactment of this legislation, the concept of “profit” is abolished in the United States, its territories and possessions. All excess of income over expenses earned by any co-op or other organized entity or business enterprise of any nature whatsoever shall hereafter be defined, known and accounted as “surplus.”
With this measure it is the intent of Congress that the earned surpluses of co-ops shall remain available 1) for reinvestment in and to the benefit of the co-op enterprises which earned them; 2) to reward the co-op employees whose personal efforts earned the surpluses; 3) to optimize every co-op’s competitive posture, greatly increasing the amount of its earned wealth available for operating expenses and reinvestment, by terminating the removal of earned surpluses from their entrepreneurial origins and abolishing transfer of surpluses to absentee stockholders whose monetary investment, motivated by profit seeking without personal effort, is coincidental to the actual employee-driven process of creating wealth; and 4) to remove the element of greed to the extent possible from commercial activity in the United States, to the benefit of the common good of the nation and of equal treatment and opportunity for all U.S. citizens.
It is not right for individuals to grow wealthy from free trade and economic integration only to rake off the profits at the expense of their neighbors. That is outright theft.
Thomas Piketty, Capital in the Twenty-First Century
The social responsibility of business is to increase its profits.
Milton Friedman, Chicago School of Economics
T’would be better far were the Chicago School of Economics taken out into Lake Michigan and held under until it is drowned.
READERS COMMENT: Your ideas are invited for dealing with the issues addressed in this post. These posts attempt to present new perspectives – THIRD OPTIONS – to move beyond the conservative-liberal divide that is so poisoning our national sense of shared community. New and wiser options are always available to make life in America better for all the people. What are yours? Be concise, use up to 200 words. Have a swell day.
SHARE THE BLOG: If you’re enjoying this tale of POPULIST CORRECTIONS in modern America, please tell your friends to tune in. Invite others to view
The Fixy Populist …at… fixypopulist.com