Benefits of Repealing Corporate Income Tax

The primary reason the corporate income tax should be repealed is that its an 
“anchor” on the economy. It makes businesses less competitive, lowers worker's 
wages and increases the cost of products and services weakening consumers' 
buying power.

Even the government does not get full value of revenue the corporate tax brings

in due to the corrosion of equitable taxation due to special interests' influence.

Abolishing it will move us closer to what we deserve, an honest tax system to fund
govt., without favors to powerful interests at the expense of individual taxpayers.

This is what repealing the corporate income tax will do:

1. US Treasury revenue will drop by $340 billion, 11% of total received annually.
This amount will be recovered if Congress would pass a responsible budget eliminating 
duplicate payments from several agencies and its usual whipping target, "waste,  
fraud and abuse".

2. Businesses get corporate tax and IRS compliance savings.
This shifts money on companies' balance sheets from an expense to an asset
and also saves the $20-30 billion cost of compliance businesses must bare, bringing
total amount available to almost $400 billion that can be used to expand, invest
in new facilities, equipment and hire more employees.

This money provides a much needed shot in arm to state economies, especially 
those still mired since the recession ended.
 
Struggling companies having difficulty meeting their payrolls or even staying 
in business will gain company saving tax relief.

Finally, corporate tax repeal would eliminate applicable federal regulations
saving businesses some of the $100 billion spent annually to comply.

3. $2 trillion deposited in foreign banks to avoid US taxes "repatriated".
This infusion of repatriated money will be an enormous one time windfall to
be used for major investments many companies would not otherwise afford.

4. End of subsidies to businesses.
Projected $340 billion 'lose' to the treasury would be offset by 'gain' if Congress
ends many subsidies paid out each year to businesses. Between 2008 and 2010, 
$222 billion was paid out with more than half going to wealthiest 25 companies. 
On average the treasury would save $110 billion annually.

5. Increase in foreign investments in the United States.
Repeal of the corporate tax will also bring foreign investments here and create an
'immigration' all Americans would welcome, international companies establishing
local headquarters without a US tax burden, bringing job growth with them.

6. Tax code simplification with better auditing recovers billions lost to tax evasion.
The repeal of the corporate tax would benefit the IRS directly, simplifying the tax
code and redirect its auditing resources from administering business compliance to 
capturing billions lost on tax evasion. Redirecting its enormous staff of corporate 
auditors to individual tax auditing where billions of revenue is lost due to tax evasion, 
a fact rarely reported.

The IRS currently assigns most auditors to oversee corporate revenue stream of 
10%, not the larger provider of revenue, individual taxpayers who pay 60%,  where
most of the evaded taxes can be found, estimated at over $300 billion annually.

7. Non-profit 'industry' would be transformed.
Non-profits, created to provide tax relief for IRS approved worthy endeavors, morphed
into multi-million dollar enterprises using their tax exempt status to run businesses
and influence legislation, beyond any boundaries of "worthy endeavors", including 
filling their coffers.

A "ripple effect" would be transformation of the non-profit 'industry' with its two
million qualified organizations. Without the corporate income tax non-profits lose
the primary appeal, a reason most major non-profits have offices in Washington,
to lobby politicians. 

Congress should also consider eliminating tax credits it provides non-profits.

8. Reduction in Congressional oversight.
Congress workload is reduced by no longer needing oversight on corporate taxation
and the pressure by those 'politicking' that drives donations that drives decisions.

9. Businesses would be more prudent spending their money. 
There will be little need for businesses to spend in order to get tax deductions. Such
decisions will be made on the merits of investing, not IRS allowances.

In summation, some may not think eliminating the corporate tax is enough to stimulate
the economy, but this single tax has greater implications than any suggestions I'm
aware of such as modifying tax rates, ending taxes on low income earners, or raising 
taxes on the rich.​​

Lastly, one thing tax experts fail to factor is that any changes to the tax code releases the
power of human behavior.  Ending the corporate tax will demonstrate how powerful it is.

Its long been said corporations don't pay taxes, people do, in added costs on products
and services. If this is true than businesses never really pay taxes, their customers do.







Please add feedback in comments section below, or email ajbruno14@gmail.com "Point of View" blog http://ajbruno14.blogspot.com/

Repealing the Corporate Income Tax

Why doesn't the US tax code ever get simplified, less onerous or cut from its
80,000 pages after decades of politicians offering their own version of how it
could be done?

To learn the answer look no further than a bold comment made at the first
Republican presidential debate when Donald Trump, "All politicians do is talk"!

Not one politician attempted to refute what Trump said, nor could they!

This election year Trump and the other candidates offered their own versions
to replace the current complex and convoluted tax code with one that is simpler,
fairer and stimulates economic growth.

But, we find one constant in most proposals, retention of the corporate income
tax, although at a lower rate, little more than a band aid, not the required surgery
as corporate tax remains an “anchor” preventing businesses from competing
against foreign companies whose tax rates are much lower!

One thing I did learn, when it comes to complex issues govt. approach them
differently than the private sector does where business survival hangs in the
balance.

In govt. politicians are guided by fear, not potential. They look at projected,
non-quantitative assumptions rather than opportunities of economic growth.

Why focus on the corporate tax?

Its long been said corporations don't pay taxes, people do, in added costs on
product and services. If this is true than businesses never really pay taxes,
their customers do.

The US corporate tax is not only one of the highest, its breeds corruption,
and the primary reason businesses and organizations have offices in Washington,
close to politicians and federal regulators they cajole for favors that benefit their
interests, not the American people or the country!

Abolishing the corporate tax moves us closer to what we deserve, an honest
tax system to fund the govt., without doling favors for influence peddlers at
the expense of individual taxpayers.

Now, to the math, the cost of repealing the corporate income tax.

In 2015 businesses paid $340 billion or 11% of total collected, an amount not
much more than what is paid to Japan, Great Britain and China each year in
interest payments on our exploding debt!

Retaining this money shifts it on companies' balance sheets from an expense
to a an asset. Repeal also saves the $20-30 billion cost of compliance businesses
must bare, bringing the amount available to almost $400 billion.

Lastly, an issue yet to be resolved, the $2 trillion of untaxed foreign earnings
of US companies sitting in overseas accounts for years that politicians 'talk'
about repatriating so businesses can invest here rather than leave money parked
in foreign banks. This money would come "home" once the corporate income tax
is repealed!

This infusion of  repatriated money will enable businesses to expand, invest
in new facilities, equipment and  hire more employees. It especially helps
struggling companies that at times have difficulty meeting their payrolls or
staying in business, providing them a much needed shot in arm for states,
especially those whose economies are still mired since the recession ended.

Additionally, the projected $340 billion 'lose' to the treasury would be offset
by the 'gain' if Congress ends many subsidies the govt. pays out each year to
businesses. No need for subsidies when there is no longer a tax liability of
$340 billion.

From 2008 to 2010, subsidies totaling $222 billion were paid out with more
than half going to the top 25 companies. On average the treasury would save
$110 billion annually. You can add to this the $100 billion cost of federal
regulations which should be addressed.

http://www.ctj.org/corporatetaxdodgers/CorporateTaxDodgersReport.pdf

Repeal of the corporate tax will also bring foreign investments here. We
would see an 'immigration' all Americans would welcome, international
companies establishing domestic headquarters without the tax burden,
bringing new job growth with them and provide the same benefits domestic
companies receive.

The repeal of the corporate tax would benefit the IRS directly by simplifying
the tax code and redirect its resources from administering business compliance
to reducing the billions lost on tax evasion. The IRS can begin to eliminate
 thousands of the 80,000 pages of its code written for corporations and also
redirect its enormous staff of corporate auditors to individual tax auditing
where billions of revenue is lost due to tax evasion, rarely reported.

Currently, the IRS assigns its auditors to oversee the corporate revenue stream
 of 10%, not the larger provider of revenue, individual taxpayers, who pay 60%,
 which is the biggest source of evaded taxes, more than $300 billion annually.

Another "ripple effect" would be the transformation of the non-profit 'industry'
with its two million qualified organizations. Without the corporate income tax
non-profit structuring loses its primary appeal and the reason major non-profits
have offices in Washington, to lobby politicians. This should lead the IRS to
reevaluate the need to provide non-profits with tax credits.

Non-profits, created to provide tax relief for worthy endeavors, morphed into
multi-million dollar enterprises using the advantage of tax exempt status to run
businesses and influence legislation, beyond any boundaries of "worthy endeavors"
which includes filling their coffers.

Congress would also benefit by no longer needing oversight on corporate taxation
or the 'politicking' which drives decisions and donations. A member of Congress
is more likely to answer a call from a powerful non-profit than his constituents.

People may not think eliminating the corporate tax is enough to stimulate the
economy and create more better paying jobs, but this single tax has greater
implications than most other choices such as lowering or ending taxes on low
income earners, increasing the minimum wage or raising taxes on the rich.

One thing tax experts fail to factor is that any changing of the tax code releases
the power of human behavior. Ending the corporate tax will demonstrate how
powerful it is.

If Congress is serious about tax reform it can start with a first bold step, as bold
as Trump was, by reminding us "All politicians do is talk".

Please add feedback in comments section below, or email ajbruno14@gmail.com
"Point of View" blog http://ajbruno14.blogspot.com/

Repealing the Corporate Income Tax

Repealing the Corporate Income Tax

Why doesn't the US tax code ever get simplified, less onerous or cut from its 80,000
pages after decades of politicians offering their own version of how it could be done?

To learn the answer look no further than a bold comment made at the first Republican
presidential debate by Donald Trump, who said "All politicians do is talk"!

Not one politician on the stage attempted to refute what Trump said, nor could they!
This election year Trump and the other candidates offered their own versions to
replace the current complex and convoluted tax code with one that is simpler,
fairer and stimulates economic growth.

But, we find one constant in most proposals, retention of the corporate income tax, although at a lower rate, merely a band aid, not the required surgery as the corporate tax remains an “anchor” preventing businesses from seriously competing against foreign  companies whose tax rates are much lower!
One thing I did learn, when it comes to complex issues govt. approach them differently than the private sector  does where business survival hangs in the balance.  
In govt. politicians are guided by fear, not potential. Congress and bureaucrats

look at projected, non-quantitative assumptions rather than opportunities to bring economic growth. 

Why focus on the corporate tax?
Its long been said corporations don't pay taxes, people do, in added costs on product
and services. If this is true than businesses never really pay taxes, their customers do.
The US corporate tax is not only one of the highest, its breeds corruption, and the

primary reason businesses and organizations have offices in Washington, close to
politicians and federal regulators they cajole for favors that benefit their interests,
not the American people or the country!
Abolishing the corporate tax moves us closer to what we deserve, an honest tax
system to fund the govt., without doling favors to influence peddlers at the expense
of individual taxpayers.

Now, to the math, the cost of repealing the corporate income tax.
In 2015 businesses paid $340 billion or 11% of total collected, an amount not
much more than what is paid to Japan, Great Britain and China each year in
interest payments on our exploding debt!

  Retaining this money shifts it on companies balance sheets from an expense to an asset.  The repeal also saves the $20-30 billion cost of compliance, businesses must bare, bringing the amount available to almost $400 billion. 
Lastly, an issue never resolved, the $2 trillion of untaxed foreign earnings of US companies sitting in overseas accounts for years that politicians 'talk' about 'repatriating' so businesses can invest here rather than leave money parked in foreign banks. This money would come "home" once the corporate income tax is repealed!
This infusion of  repatriated money will enable businesses to expand, invest in new  facilities, equipment and  hire more employees. It especially helps struggling companies that at times have difficulty staying in business or meeting their payrolls, providing
them a much needed shot in arm for states, especially ones whose economies still
mired since the recession ended.  

Additionally, the projected $340 billion 'lose' to the treasury would be offset by the
'gain' if Congress ends many subsidies the govt. pays out each year to businesses.
No need for subsidies when there is no longer a tax liability of $340 billion.
From 2008 to 2010, subsidies totaling $222 billion were paid out with more than half  going to the top 25 companies. On average the  treasury would save $110 billion annually.
http://www.ctj.org/corporatetaxdodgers/CorporateTaxDodgersReport.pdf

Repeal of the corporate tax will also bring foreign investments here. We would see an
'immigration' all Americans would welcome, international companies establishing c
domestic headquarters without the tax burden, bringing new job growth with them and provide the same benefits domestic companies receive.

The repeal of the corporate tax would benefit the IRS directly by simplifying the tax
code and redirect its resources from administering business compliance to reducing
the billions lost on tax evasion. The IRS can begin to eliminate thousands of the  80,000 pages of its code written for corporations and also redirect its enormous staff of corporate auditors to individual tax auditing where billions of revenue is lost due  to tax evasion, rarely reported.
Currently, the IRS assigns its auditors to oversee the corporate revenue stream of 10%,  not the larger provider of revenue, individual taxpayers, who pay 60%, which is the biggest source of evaded taxes, more than $300 billion annually.
Another "ripple effect" would be the transformation of the non-profit 'industry' with
its two million qualified organizations. Without the corporate income tax non-profit
structuring loses its primary appeal and the reason most major non-profits have
offices in Washington, to lobby politicians. This should lead the IRS to reevaluate the need to provide non-profits with tax credits.

Non-profits, created to provide tax relief for worthy endeavors, morphed into multi-million
dollar enterprises using the advantage of tax exempt status to run businesses and
influence legislation, beyond any boundaries of "worthy endeavors" which includes filling
their coffers.
Congress would also benefit by no longer needing oversight on corporate taxation or the 'politicking' which drives decisions and donations. A member of Congress is more likely
to answer a call from a powerful non-profit than his constituents.
People may not think eliminating the corporate tax is enough to stimulate the economy
and create more better paying jobs, but this single tax has greater implications than
most other choices such as lowering or ending taxes on low income earners, increasing
the minimum wage or raising taxes on the rich.
One thing tax experts fail to factor is changing the tax code releases the power of human
behavior. Ending the corporate tax will demonstrate how powerful it is.

If Congress is serious about tax reform it can start with a first bold step, as bold as
Trump was, by reminding us "All politicians do is talk".

"Weak End" to Bernie's presidential ambitions

A funny thing happened to Bernie Sanders campaign for the Democrat presidential
nomination, it was killed.  The 'death' is not due to his unpopularity among the electorate,
but the desires of the party leaders who are the ones who determine the limits any member
can rise to.

Why is this happening?   Its due to a year long  drip, drip, drip of information that Hillary
may not be able to continue due to the severity of an FBI and Congressional investigation,
leaving party leaders in despair as the person they want might have to withdraw.

The task now is to figure out who else can nicely fit under the nominee's crown already fitted
for Hillary!  Once this person is cajoled to enter the race the convention delegates will vote
as told, and Bernie will be vanquished to the sidelines.

The party's desperation has gotten to the point of even considering a "duo", offering up two
candidates at its convention in July to run in tandem in the general election as president and
vice-president nominees.

This unorthodox step is being done after a year of primaries and caucuses in which Sanders,
the last candidate standing garnered millions of votes that the party view as meaningless and
treated as if his success never even happened.

There may no longer be smoked filled room to "elect" nominees, but even though the air is
clear the stench of the past remains.






 





Please add feedback in comments section below, or email ajbruno14@gmail.com "Point of View" blog http://ajbruno14.blogspot.com/

Eliminating the corporate income tax

One thing I have learned perusing the web for information is that govt.
approaches complex issues much differently than the private sector does.   

In researching approaches to tax reform  found govt. begins by identifying 
prohibitive factors and a negative approach that allows fear rather then
potential to drive any  attempt to reform. 
 Congress and bureaucrats looks at projected,  non-quantitative barriers  
rather than unshackle opportunities that drives economic growth. 

The first thing the public needs to know is how much less revenue repealing 
the corporate income tax will 'cost' the treasury? In 2015 $340 billion, or 10%
of the total revenue, was sent to Washington.

Retaining this money shifts it on balance sheets from an expense to an asset. 
The repeal also eliminates the cost of compliance,  $20-30 billion the business
must bare, bringing the amount available to almost $400 billion,  money
remaining "within the states" directly stimulating their economies. 

Lastly, an issue never resolved, how can $2 trillion of  untaxed  foreign 
earnings of US companies sitting in overseas accounts be 'repatriated', so

businesses could be invested here rather than remain parked in foreign banks.

This infusion of money will enable businesses to expand, invest in new facilities,
equipment and hire more employees. It especially helps struggling companies
that at times have difficulty staying in business or meeting their payrolls.

This benefit dwarfs the $340 billion 'lose' some politicians fear, so do nothing.

But, there is more. Prices on products and services will be driven down as
business costs are lowered, increasing in consumer buying power, even on
major expenses such as housing and health care, the two fastest rising costs!

This surge would be a much needed shot in arm for states, especially those
whose economies still remain mired since the recession ended.

Repeal of our corporate tax would also benefit foreign businesses that may
invest more in American market due to our high corporate tax rate. Without
a corporate income tax they will have the same benefits domestic companies
receive.

Another windfall to the govt. would be eliminating many subsidies paid to 
businesses. From 2008 to 2010, subsidies totaling $222 billion were paid 
out with more than half going to the top 25 companies. On average the 
treasury would save $110 billion annually.


http://www.ctj.org/corporatetaxdodgers/CorporateTaxDodgersReport.pdf

The repeal of the corporate tax would also benefit the IRS directly as much 
of its resources is dedicated to administering business compliance.

With repeal the IRS can begin to eliminate thousands of the 80,000 pages of 
its code written for corporations. Its enormous staff  of corporate auditors can
 be transferred to individual tax auditing where billions of revenue is lost due to 
tax evasion, yet rarely reported. The benefit would almost add up to the 'lose'
of repealing the corporate tax.

Currently, while the IRS dedicates its auditors to oversee the corporate revenue
stream of 10%, the larger provider of revenue, individual taxpayers, pay over 
60% each year and are the biggest source of evaded taxes. Since 2005 the
IRS reports tax evasion cost the treasury more than $300 billion annually.

Congress would also benefit by no longer needing oversight on corporate taxation
or the 'politicking' which drives decisions and donations.

Another "ripple effect" is found in the transformation of the non-profit 'industry' made
up of almost 2,000,000 qualified organizations. Without the corporate income tax
non-profit structuring loses its primary appeal, and the reason most major non-profits
have offices in Washington to lobby politicians. This can also lead the IRS to reevaluate
 the need to provide non-profits tax credits, even though they are exempt from taxation.

I believe this would be a first huge step to to grow the economy which is critical to
meet future challenges. 

I'm sure other benefits can be be found in addition to repealing the corporate income tax.
But, I am equally sure there will be strong opposition to doing this, especially in industries
that want on our complex system staying just as it is.

Thanks for reviewing, please forward other 'ripple effects' you can think of.

Please add feedback in comments section below, or email ajbruno14@gmail.com "Point of View" blog http://ajbruno14.blogspot.com/

Can $340 billion improve the US economy?

Why doesn't the US tax code ever get simplified, less onerous or cut
from its 80,000 pages after decades of politicians offering their own
version of how it could be done?

To learn the answer you need look no further than to a bold comment
made at the first Republican presidential debate by Donald Trump,
"All politicians do is talk"!

Many in the audience agreed, and not one politician on the stage
attempted to refute what he said, nor could they!

This election year Trump, like most others, is offering his own
version to replace the current complex and convoluted tax code
with one that is simpler, fairer and stimulates economic growth.

Although different versions offered have merit, most retained the
'anchor' that holds down American businesses from competing
against foreign companies and investing in their companies, the
corporate tax!

Its long been said corporations don't pay taxes, people do in
the added cost they pay on products and services. If this is
true than a corporate tax defeats the purpose of shared taxation!

The US corporate tax is not only one of the highest, its the
reason businesses and organizations have offices in Washington,
close to politicians and federal regulators so they can cajole
for favors that benefit THEIR interests, not the country's!

Nor would companies have to retain offices in Washington to do
business with the IRS.

Abolishing the corporate tax will also move us closer to what we
deserve, an honest tax system to fund the govt., without doling
favors to influence peddlers.

What would the elimination of the corporate tax cost us? In 2015
businesses paid $340 billion or only 11% of total collected, an
amount not much more than what we pay to Japan, Great Britain
and China each year in interest payments on our exploding debt!

But, is it really a lose if the benefits are greater?

First, why leave more money then necessary in the hands of people
who have proven to be irresponsible and tolerate "waste, fraud
and abuse", a long standing catch phrase of a dysfunctional system
that needs to be overhauled?

This $340 billion could be better used when retained by companies
to strengthen their competitiveness, investing in expansion, better
equipment leading to hiring more employees, all which drives
increased federal revenue!

Plus, the $340 billion is not all companies pay to meet their tax obligations,
tens of billions are the unseen cost of compliance.

But something else should be abolished along with the corporate tax,
the federal subsidies the govt. provides to select industries such as
agriculture, energy and environmental. Without a corporate tax there
is no need taxpayers subsidize such as fossil fuel at $400 billion,
renewable energy at $66 billion and agriculture at $20 billion.

Additionally, the reluctance of foreign business to establish offices
in the US would be replaced with an 'immigration' all Americans would
welcome, international companies establishing domestic headquarters
without baring the tax burden, and bringing new job growth with them.

The $340 billion 'lose' could become a $500 billion gain!

An unintended 'positive' consequence would be doing away with the
non-profit status which allows qualified organizations a tax exemption!

Non-profits, created to provide tax relief for worthy endeavors, have
abused the privilege. Many have become multi-million dollar enterprises
using the tax exempt status to run businesses and influence what govt.
does, beyond any boundaries of "worthy endeavors" which includes
filling their coffers.

Doing away with this 'industry' will cripple its funding mechanism that

has become one more an impediment to responsible governance.

With almost two million non-profits the rise has also "bought" political
influence. A member of Congress is more likely to answer a call from
a powerful non-profit than an average citizen.

The people may not think eliminating the corporate tax is enough to stimulate
the economy and create more better paying jobs, but this single tax has
greater implications than lowering or ending taxes on low income earners,
increasing the minimum wage or raising taxes on the rich.


One thing the tax experts fail to factor is changing the tax code releases
the power of human behavior. Ending the corporate tax will demonstrate
just how powerful it is.




Please add feedback in comments section below, or email ajbruno14@gmail.com "Point of View" blog http://ajbruno14.blogspot.com/

If Bernie meets Donnie......

Stranger things have happened, but the master of the "Art of the Deal",
Donald Trump should consider meeting his polar opposite, Bernie Sanders.
It would be the political equivalent of  "Odd Couple".

Consider, what Sanders and Trump agree on the following:

A. The capitalist system is rigged against most Americans.
B. "Global" trade deals have hurt American workers.
C. Tuition cost put students and their parents in the poor house.
D. Both are 'outsiders' the political parties prefer not be nominated.
E. Both men have energized the electorate.

What would such a meeting produce?

First, it would demonstrate the 'establishment' can be defeated if
a candidate, even without a lot of PAC money can compete if he
energizes the electorate as both men have done for almost a year.

If Sanders and Trump met it would strengthen BOTH their campaigns.

In fact, a meeting might get both to agree to publicly debate on Fox
since Hillary refuses to accept the invitation.

Doing so will prove both men are serious about winning the presidency,
something Hillary only seems entitled to!


Please add feedback in comments section below, or email ajbruno14@gmail.com "Point of View" blog http://ajbruno14.blogspot.com/

The Corruption behind NAFTA!

How many people remember the phrase "giant sucking sound"? 

It gained notoriety when Ross Perot used it during a 1992 presidential debate  
to criticize the North American Free Trade Agreement, NAFTA, that he said  
would "suck" American jobs to Mexico.  He warned NAFTA would send jobs 
overseas where labor costs cheaper than here.

And, here we are almost 25 years later and we still hear about Americans losing
jobs,  but only not due to a "giant sucking sound" coming from Mexico, it goes 
deeper, to a unknown dark side. 

NAFTA was suppose to strengthen the economies of three nations, Canada, Mexico
and the United States, but two were economically damaged, not strengthened.

The problem is due to what the intent of the NAFTA agreement really was,  with
the primary  beneficiaries being institutions, a desire which avoided detection.

Worse, the "sucking sound" comes from the United States, not Mexico as 10-20 
million illegals have come here to compete with American for scarce low pay jobs. 

Nor, its no coincidence Mexicans are coming here for jobs, its directly due to its 
govt committing economic 'treason', selling out its own people to enrich its ruling 
class. And,  on our side of the border, our own ruling class is equally culpable in 
NAFTA's failure to fulfill its promise.

How NAFTA did this can be found on a website, prospect.org in an article written
by  Jeff Faux in 2003, a decade after Perot warned us. It offers many reasons for 
NAFTA  failing, on this link,  http://bit.ly/1U2fXRE

Here are some highlights I selected. The full analysis goes into greater depth of what
deliberately  as done that sabotaged the expected purity of the trade agreement.

My notes:

A.  NAFTA was the capstone, an effort begun in the early 1980s by a group
of U.S.-educated economists and business people who took over the ruling
Partido Revolucionario Institucional (PRI) to build a privatized, deregulated 
and globalized Mexican economy. 

Among their chief objectives was tearing up the old corporatist social 
contract in which the benefits of growth were shared with workers, farmers 
and small-business people through an elaborate set of institutions connected 
to the PRI.

NAFTA provided no social contract. It offered neither aid for Mexico nor
labor, health or environmental standards. Corporate investors were protected,
everyone else was on his or her own. 

NAFTA is the nation-building template imposed on developing countries by recent
corporate-dominated U.S. administrations and their client international finance
agencies. It is the model for the proposed Free Trade Agreement of the Americas

Americans' own understanding of NAFTA's impact on the Mexican people is 
obscured in part by the gap between what Mexican elites tell U.S. elites and 
what Mexicans tell one another.

NAFTA's critics did not doubt that it would stimulate more trade; but they rightly
predicted any benefits would go largely to the rich while the middle class and the
poor would pay the costs, and that the promised growth would not materialize.

B. NAFTA is not the cause of all Mexico's economic troubles, but it has clearly 
made them worse. Since NAFTA's inception in 1994 -- indeed, for the 20 years of 
neo liberal "reform" the Mexican middle class has shrunk and the number of poor 
has expanded.

C. During his 2000 campaign, Mexican President Vicente Fox promised that under 
his six-year term the country would grow 7 percent per year. Two and a half 
years after his inauguration, growth has averaged less than 1 percent.

The northward migration continues. Between the U.S. censuses of 1990 and 2000, number 
of Mexican-born residents in the United States increased by more than 80%.

Some half-million Mexicans come to the United States every year; roughly 60% of 
them are undocumented.

D. Behind the laissez-faire rhetoric, Mexico's neoliberals were pursuing a large
scale program of government social engineering aimed at forcing Mexico's rural 
population off the land and into the cities, where it could provide cheap labor 
for foreign investment that the new open economy would attract.

The PRI reformers did not, they intended to depopulate rural Mexico. After the 
treaty was signed, reformers pulled the rug out from under the rural peasantry. Funding 
for farm programs dropped from $2 billion in 1994 to $500 million by 2000. 

E. Meanwhile, the U.S. Congress massively increased subsidies for corn, wheat, 
livestock, dairy products and other farm products exported to Mexico. American 
farmers now receive 7.5 to 12 times more in government help than Mexican farmers 
do, a "comparative advantage" enabled U.S. agribusiness to blow thousands of 
Mexican farmers out of their own markets.

When displaced farmers arrived in nearby cities, few jobs were waiting. NAFTA
concentrated growth along Mexico's northern border, where factories processed 
and assembled goods for the then-booming U.S. consumer market. Between 1994 and 
2000, urban employment doubled while it stagnated in rest of the country.

F. Neoliberalism was supposed to reduce the income gap between Mexico's rich 
border states and the poorer ones in the country's middle and south. It did not.

In the depressingly familiar pattern of privatization the world over -- the PRI
reformers sold off the banks to friends, then bailed out the new owners when 
the peso collapsed a year after NAFTA was passed. 

Made whole with more than $60 billion of the taxpayers' money, crony capitalists 
resold their banks at a handsome markup to foreign investors. For example, an
investment group bought Mexico's 2nd largest commercial bank for $3.2 billion 
and sold it to CitiGroup for $12.5 billion. The global bankers were more interested 
in taking deposits and making high-interest-rate consumer loans than in developing 
Mexico's internal economy. 

Meanwhile, its booming investment in the exporting sweatshops of the north created 
a social and ecological nightmare. Rural migrants overwhelmed already inadequate
housing, health and public-safety infrastructures, spreading shantytowns, pollution
and crime.

G. The same global corporate coalition that forced NAFTA through Congress also 
successfully lobbied the United States to sponsor China's full entry into the 
World Trade Organization (WTO), paving the way for a huge increase in Chinese 
exports to the United States. 

This led to an estimated 200,000 maquiladora jobs have left Mexico for China, where 
workers can be had for one-eighth the Mexican wages in the last two years.

In a deregulated world, there is always someone who will work for less. 

Hope NAFTA would enable Mexico to export its way to prosperity has largely vanished.

H. The Mexican government, aided by U.S. foundations; nongovernmental organizations,
is attempting to channel migrant remittances into quasi-governmental credit unions that
would provide capital to businesses and local governments. But migrants send money for
immediate consumption to maintain living standards of parents, grandparents and children
in a depressed domestic economy. 

But, it is an odd notion of economic development that rests on the meager savings of 
low-wage Mexican workers in America while wealthy Mexicans regularly ship their 
capital to New York, London and Zurich.

In fact, Mexico's oligarchs public focus on the condition of Mexican workers in the 
United States has the great virtue of diverting political attention from the condition
of Mexican workers in Mexico.

I. As in many developing countries, the largest part of Mexico's economic problem lies 
not in restricted export markets but in the stifling maldistribution of wealth and
power that restricts internal growth.

The gap between Mexico's rich and poor is among the worst in the Western Hemisphere,
and the rich hardly pay any taxes.

J. The testimony of hundreds of thousands of Mexican workers that each year making 
the hard and dangerous trip north is evidence that, after two decades, the model is 
not working in  Mexico. If it is not working there, it is unlikely to work anywhere.


IN SUMMARY:  Here we are, having to address a problem neither the United States or 
Mexico should not have had. Neither country's "ruling class" cared about workers, 
they were pawns to advance their own desires.

To the Mexican govt. its workers were expendable as its farming industry could not 
sustain them, and portable as these farmers had no choice but to move north, and 
further to the United States.

To the United States, the welcome mat was placed so all could see, the invasion of 
foreign labor was needed so our farm industry would have the low cost labor to meet 
the demand thanks to taxpayer subsidies.

What occurred on both sides of the border was not just circumstance, rather it was 
orchestrated, to advance globalization, structured govt. public private partnerships
where workers are societal "tools" to be used or discarded.

At some point a serious postmortem will be written which will take readers behind 
the curtain to see how things are done and destroy the myth the people we entrust 
our nation's governance work in our best interests.

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