Invest in our future, not in corporate welfare
By Arnold Hiatt, 12/15/2001
Although most of the provisions of these bills aim to benefit businesses,
the tax cuts and rebates proposed make little business sense. Furthermore,
they violate the trust in government that has been building since Sept.
11. The so-called Economic Security and Recovery Act passed by the House
in October is a case study in greed camouflaged by national crisis, most
blatantly the provision to repeal the corporate alternative minimum tax and
refund all payments since its inception in 1986. The House bill would give
$1.4 billion to IBM, $1 billion to Ford, $833 million to General Motors,
$671 million to General Electric, and the list goes on. The top 14 recipients of the refund would receive $420 for every
dollar they contributed to political parties in the past 10 years. Rewarding
campaign donors will not stimulate our ailing economy. The House bill also cuts the capital gains tax rate and accelerates
income tax breaks that overwhelmingly benefit the wealthy. When tax cuts for the wealthy were passed last summer, their supporters
said they were justified by the supposedly large budget surplus. Now, with
the surplus gone, they are being rationalized as economic stimulus. In fact, tax cuts for the wealthy will hurt economic recovery by
stimulating a growing budget deficit, causing cutbacks in essential government
services, and shifting more of the tax burden to low and middle income Americans. As CEO of the Stride Rite Corp. for more than 20 years, I did not
make investments based on tax breaks. The company prospered because of the
demand for our product and a healthy economy. Increased consumer spending
and wise public infrastructure investments are the keys to economic recovery. If the Bush administration wants to serve the interests of business,
it must understand that the well-being of business cannot be separated from
the well-being of the community and the nation. A wise investment in human capital would have large returns: It
would extend unemployment and health care benefits and expand job training
programs. Investing in labor-intensive public works like school construction
and repair, railroads, and affordable housing would put many of the unemployed
back to work, earning money to spend in the economy. The $200 billion stimulus package proposed by the Congressional
Progressive Caucus comes closest to the mark. It includes unemployment relief,
job training assistance, and public works spending. These remedies would
cycle money directly into the economy, increasing demand for goods and services,
creating jobs, and addressing important infrastructure investments that make
our economy and country healthier for the long run. As the Senate and House resume work on the stimulus bill, they would
be wise to drop the corporate welfare packages proposed to date and consider
what constitutes real economic stimulus. It's time for business leaders to drop their calls for self-serving
tax breaks and instead push for stimulus measures that benefit the economy
as a whole. If Congress wants to keep faith with the American people, now is
the time to invest in our long-neglected infrastructure, such as schools
and better health for our children. In doing so, they would provide more
employment and more disposable income, which would benefit the very companies
that are seeking billion dollar handouts. The return on this kind of investment
would be a stronger economy and a more secure democracy. Oliver Wendell Holmes said, ''Taxes are the price we pay for civilization.'' A civilization that we can be proud of and others would emulate. Arnold Hiatt, former CEO of the Stride Rite Corp., is chairman
of Business for Social Responsibility and chairman of the Stride Rite Foundation.
WE SHOULD BE glad that Congress hasn't yet finalized a stimulus package because
neither the House nor Senate versions would stimulate the economy.
This story ran on page A18 of the Boston Globe
on 12/15/2001.
© Copyright
2001 Globe Newspaper Company.