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.” Now, ask me about the Tooth Fairy.
How Big Business Does Business
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.
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.
If we’re going to preserve what remains of our late-stage capitalist system for future generations, then we need to face reality, 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. Without whom, the entire system collapses under the weight of its own bottomless greed.
Saving Capitalism from Itself — A Grid of Growth
We can pass all the anti-trust laws in the world, but it’s always a losing battle until we address the issue of Macroeconomic Scaling directly.
First, because not every country has effective anti-trust laws; so, in a global economy following the precepts of crony capitalism, these laws mean next to nothing. They can always be subverted, once a corporation gets to a certain size and level of influence. Especially when the corporation is the government itself; i.e. China.
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.
We need real, structural change. We can start by getting the money off of Wall Street, and back onto Main Street. 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. A distributed grid of local economic growth; not a few, massively profitable Megacorps overseas. The more economic power shifts upward, the further away it and our money will move. It’s not enough to simply redistribute wealth; we have to redistribute industrial power itself.
I think a crucial tool in doing so will be 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 mutual partnership, rather than unilateral destruction.
Here’s our idea.
The Tax Plan
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:
- Increasing Competition: This plan 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.
- Moving Money from Wall Street to Main Street: By giving smaller companies a real chance at success provides tremendous incentive for investors to move their dollars downmarket. Toward small businesses and startups. This releases trillions of dollars otherwise sitting in the Caymans collecting interest, or in brokerage accounts on 5th Avenue, and puts this money into the hands of true entrepreneurs and pioneers. Those small business owners and independent innovators who made America great in the first place. This creates an entirely new market of startup investment, reducing risk in those smaller companies and moving them into the thick of investor portfolios.
We believe this tax plan may form the basis for a complete revitalization of America’s business network. To help create a distributed grid of highly competitive individuals, creating opportunity for all and an entirely new era of capitalistic innovation. Make no mistake, the Rowe Plan will prove very, very good for our country.
But…this isn’t about just America. Not anymore.
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 our “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 how we get there. And 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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