The Myth of Corporate Parity goes something like this: “Walmart’s just another lil’ old Mom n Pop store; they just happen to be bigger than most. So, applying the same rules to Walmart as to Pop’s corner store makes for a level playing field. May the best competitor win.”
Welcome to the Desert of the Real
Despite what they’d have us believe, the fact is that Big Business operates in a completely different way from Small. Not only are they not on a level playing field; in many cases, they’re not even playing the same game.
Small Business generally makes money by providing goods and services; cash comes in, stuff goes out. Resources grow in accordance to production. Big Business, though, makes money by leveraging the resources they already have. Big Business plays on the global stage, taking advantage of the Macroeconomy of Scale to grow bigger, just by getting bigger. Read our other materials on that. But, for now, here’s the reality on the ground:
Mom doesn’t have a legion of accountants working around the clock to exploit every tax loophole in the book. And Pop can’t take advantage of billion-dollar loans and stock leveraging, backed by farm subsidies through Chinese trade negotiations, and the massive infrastructure of subsidiary co-ownership that interrelated global entities can. All the while pretending that (Golly Gee), Walmart’s just another lil’ shop, trying to make ends meet. It’s that nefarious crook Pop’s who’s really making out.
No. Not only do massive corporations go into every deal with an overwhelming resource advantage, they use this inbuilt advantage to dominate the market and drive smaller competitors out of business. Which is a problem, since competition is the foundation of capitalism. Without it, the whole system dies. We’re watching it happen in real time. We’re watching the death of capitalism at the hands of those who’ve already profited most from it.
Taking the Red Pill
If we’re going to save this system from itself, then it’s high damned time we wake up to reality; face the real world, and stop buying the myth of corporate parity. This dangerous lie deliberately ignores the inbuilt advantage larger companies have over smaller ones. It guarantees the trends of acquisition, conglomeration and destruction of smaller competitors.
We can pass all the anti-trust laws in the world, but it’s always a losing battle until we address this problem directly. First, because not every country has them; so, in a global economy following the precepts of crony capitalism, antitrust laws mean next to nothing. They can always be subverted, once a corporation gets to a certain size and level of influence.
Make no mistake: Without placing limits on the Macroeconomy of Scale, capitalism will eat itself alive. As long as it always profits a company to get bigger, capitalism is as good as dead. In the end, there can be only one.
We need real, structural change. We can start by getting the money off of Wall Street, and back to Main Street. By shifting power away from exploitative, global corporate interests and back into our own communities. In order to have a functioning, sustainable economy of innovation and opportunity, we need lots of small businesses operating nearer the margins. Not a few, massively profitable Megacorps overseas.
What we need is a corporate tax system which creates a truly level playing field between Big Business and Small. One that enables synthesis between David and Goliath through partnership, rather than destruction.
Here’s my proposal:
The numbers are of course malleable at this point. But as you can see, this multi-tiered plan:
- Is fully progressive, giving the smallest businesses an inherent economic advantage over the largest. This, in and of itself, would almost be enough to interrupt the Highlander Effect, and disrupt Macroeconomic Scaling. If we do nothing else, this needs to be it. But, I don’t think a simple progressive tax curve in itself gives us the flexibility to both enforce tax code and adapt to different types of businesses.
- Creates a multi-tiered structure, favoring smaller and more local businesses over international conglomerates and financial institutions. This tier structure keeps our economy local, and dollars circulating locally rather than going into corporate investment accounts or Cayman Island banks.
- Establishes a base/minimum range for taxation. The Base (high side) is the maximum tax rate for that tier or business type. The Minimum is the least they can pay, after all applicable deductions and credits. It also counts subsidies of any kind as taxable income. And you can bet, there will be far, far fewer of those under my plan. So, no more Exxon or Amazon paying zero dollars in taxes. No. Everybody pays their share, come Hell or highwater.
The benefits of a system like this are fairly obvious on its face, but the two primary are:
- It puts Mom and Pop in the game with MegaCorps, making them direct competitors against the biggest companies on Earth. It eliminates the inbuilt advantage of endless expansion, endless acquisition and ultimately puts a limit on the macroeconomy of scale. We must do this, or Capitalism will fail, taking innovation and product value with it. See additional materials on the Infracompetitive Cycle.
- By giving smaller companies a real chance at success provides tremendous incentive for investors to move their dollars downmarket. Toward small businesses and startups. Wall Street to Main Street. This releases trillions of dollars otherwise sitting in the Caymans collecting interest, and puts it into the hands of true entrepreneurs. True pioneers. Those small business owners and independent innovators who made America great in the first place.
But this isn’t about just America. Not anymore.
Revolutions, and Opportunity for All
Capitalism is a global enterprise, and these are global entities. I would propose working with our trade partners to establish a global taxation plan based on these principles. We can do it, and I see no reason why anyone in our trading circle (outside of China) would object to similar measures. It benefits every nation, no matter where implemented. But benefits all if implemented globally.
By encouraging the growth of small business and manufacturers, using further initiatives outlined in my “Industrial Reform” materials, we can create a truly sustainable synthesis between big business and small. One that still allows big companies to make money doing what they do best, and independent entrepreneurs to generate jobs and industry in local communities by doing what they do best.
That’s a more involved discussion, and goes well into Industrial Reform initiatives. But putting limits on endless growth and acquisition is where it starts. Abandoning the myth of corporate parity is where it starts. Without that, there’s no point in pretending as though capitalism will survive much longer under the current global corporatist system.
This is how we save Capitalism. The American dream. Not just for America, but for everyone. We save it by creating a truly level playing field, crafting a sustainable partnership between global corporations and small business. Tomorrow, we can create whit in reality today is only myth.
“Opportunity for All.”
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