Robert Whitcomb: Ignore 'inverson'; marina people; Tughill Plateau

Corporate “inversion’’ involves a previously U.S.-based company merging with a foreign one, reincorporating abroad and, by so doing, taking advantage of foreign corporate income-tax rates generally lower than ours. Many public companies are not paying anywhere near the 35 percent federal corporate income-tax rate because of assorted tax breaks; some companies pay no income tax because of loopholes. Still, all in all, our corporate rate is not competitive with our major foreign competitors’.

Some have called companies using inversion “unpatriotic.’’ I disagree. The senior executives and members of the boards of directors making these decisions are legally maximizing their and the company’s wealth in a partly capitalist system that, for all its faults, fuels innovation and prosperity for the entire country — over the long haul. Most individual taxpayers also try to optimize their tax situation.

And, as I have long argued, the corporate income tax is stupid, except for the lobbyists it enriches. It encourages maneuvers such as inversions. It sends jobs abroad. It supports a lobbying system in Washington that spawns corruption and makes the world’s most complicated tax system ever more complex and inefficient as corporations seek tax breaks from elected officials.

Anyway, in the end companies’ customers, employees and shareholders pay the corporate income tax. Companies just pass along the cost.

We need to end the corporate tax and enact a value-added (consumption-based) tax. We should also put personal earned income and capital gains on a more equal tax basis and maintain substantial estate taxes. The aim should be to help streamline and detoxify our tax system, encourage economic growth and at least mildly mitigate the growth of a permanent plutocracy based on inheritance.


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Automation and information technology are now rapidly wiping out well-paying jobs. They’ve long been wiping out low-paying ones. Indeed, those automatic store checkout machines are starting to make inroads into one of the last few fallbacks for those with only a high-school education.

The line is that somehow the economy, blessed by ever-increasing productivity, will create a whole new wave of well-paying jobs to replace the ones killed. We’re still waiting.

Even upper-middle-class jobs are in peril. Consider lawyers, much of whose routine work can be done through computers and low-paid (by our standards) people, in, say, India. And medical equipment, nurse practitioners and ever-better prescription drugs will undermine physicians’ affluence.

Then there’s finance. Many college undergraduates, especially at elite institutions, career plan as if Wall Street were the only sure way to fortune. But they may be guessing wrong. Just because finance was the big thing in the last three decades doesn’t mean that it will be in the next 20. Many young people could find their Wall Street jobs as redundant as many jobs in manufacturing became in the ’70s. We tend to fight the last war.

Some futurists suggest plausibly that such service jobs as plumbers, electricians, gardeners and maids, along with home health-care and social workers and other counselors, may have the best chance of survival. In some fields, even the middle class will still demand personal service.

To reduce social disorder, will the government eventually establish a minimum income for those millions who truly can’t find work?


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I just visited the gorgeous Thousand Islands, on the St. Lawrence River. We cruised for parts of two days in our host’s powerboat, which he keeps in a roofed marina in Clayton, N.Y., another one of those small Northeast towns whose downtowns seem to be regaining a bit of their old energy as big-box stores lose some allure to an aging population.

The vast majority of boats remained in their slips, rather than being taken out on the river, on a beautiful summer weekend. This can be explained in part by fuel costs but more, I think, by the marina’s social role. Most of these boat owners, whose age generally ranges from 50 to 80, primarily see the marina as their summer colony, with the boats (most with sleeping space for from two to eight people) as their summer bungalows.

During the short North Country season, they relentlessly schmooze with their neighbors and derive some meaning from endless boat maintenance. They live in a cozy waterborne village. What most of these people would not have liked back home — living cheek-by-jowl — they thrive in for a few weeks every summer.


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We drove home through upstate New York’s Tughill Plateau, which has hundreds of wind turbines. The white wind turbines and the vivid green of the countryside, with its view of the Adirondacks, create a spectacular, if a bit eerie, landscape. Most of the farms are far better kept up than I remembered from years before — because of the fees paid to them by the utilities. A very green cash crop and no cash paid to the Mideast!


Robert Whitcomb (rwhitcomb51@gmail.com) oversees New England Diary. He is also a senior adviser and partner at Cambridge Management Group (www.cmg625.com), a health-care consultancy,  a former finance editor of the International Herald Tribune, a former editor at The Wall Street Journal, a former  editorial-page editor and vice president at The Providence Journal and  currently a Fellow of the Pell Center for International Relations and Public Policy.

Some real and movie time with Pete Seeger

In the late spring of 1970, a group of about a dozen of us (I was along for the ride with a girlfriend of the time) spent a few hours with the mellow-voiced Peter Seeger at his 17-acre  rustic homestead, in Beacon, N.Y., on a bluff overlooking the Hudson River. It had been a lush,  warm spring, famous for anti-Vietnam War demonstrations. We had a cookout, at which Seeger was an affable host. He, of course, sang and played the five-string banjo, and a few others joined in making music.

Way down below on the river was a sloop that he owned that he was using in the early stages of leading a campaign to  stop the likes of General Electric and other organizations from dumping toxins (some carcinogenic) into the river (which  that day, despite its poisons, looked like 18th Century painting of the Rhine. Gorgeous!). It seems astonishing now to think of what we dumped into our public water, both as individuals and as institutions.

I generally disliked folk songs back then -- the lyrics seemed too sentimental and sometimes far too preachy and the tunes  repetitive and clunky. I find them easier to take these days because I hear them as part of the broad flow of history. Or maybe I'm just getting hard of hearing....

Meanwhile, take a look at this segment of the very funny and sad movie The American Ruling Class. In it, Pete Seeger is walking, banjoing and singing down a road in what seems to be a very pastoral part of Greenwich, Conn., a capital of the sometimes rapacious capitalism that the old leftie hated. I think it's pretty funny, as is much of the movie, directed by John Kirby, produced by Libby Handros and with writer/editor Lewis Lapham as the master of ceremonies. He takes us to a lot of other celebrities commenting on American society in the years before the Great Crash of 2008.

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