People. Passion. Possibilities. Plutocracy.

abbvie1Is it unpatriotic not to pay taxes? A number of corporate leaders and their apologists in Congress would seem to hold a strong negative sentiment, taking umbrage at the notion that shimmying gracelessly through a tax loophole they bought and paid for from the politicians is in any way un-American. Saving on taxes in their view just makes good, ole-fashioned business sense, doncha know?

Take the case of AbbVie, a spin-off of Abbott Labs in the pharmaceutical industry which just agreed to buy its European rival Shire for a tidy $54 billion. The big story in most business news articles was not about the extended R&D the combined company might produce, or the cost savings that might be passed onto consumers, but of the generous tax benefits bestowed upon the combined entities: an effective rate that will fall from 22 percent to 13 (a number enjoyed by precious few middle-class jerks who commute 90 minutes every day for a living.) In fact, CEO Richard A. Gonzalez made it clear to analysts: “It will be domiciled in the U.K. for tax purposes.” Less emphatically stated was that AbbVie would still be run out of Chicago and listed on the New York Stock Exchange, as if nothing had happened other than the millions in tax savings.

And what about those savings? It’s a zero-sum game, and someone has to lose if AbbVie and the multitude of other US corporations gain by taking advantage of generous “inversion” laws, including Walgreens, Pfizer, Omnicom, Eaton Corp, Aon and Medtronic. Those losers are the rank and file taxpayers who have to make it up in higher taxes, or by suffering future deleterious effects of deficit spending. Every U.S. company that does an inversion and “domiciles” in a candy-cane tax haven like Ireland or the Netherlands gets to freeload off the significant benefits of the American business environment: access to a rich consumer base, an orderly legal system, ironclad patent and copyright protection, a decent infrastructure, the strongest military defense in the world, financial stability, and a vaunted university system producing quality talent.

Don’t expect Congress to remediate the situation – too many are signatories of the “Grover Norquist” pledge never to raise a tax, which in their narrow minds includes closing an egregious loophole.


Where would Amazon, eBay, Facebook and Twitter be without the internet which came into being as a descendant of the Department of Defense’s DARPA network?

How much did Pratt & Whitney and GE benefit from government-funded R&D on jet propulsion? Same goes for Boeing and Lockheed which benefited enormously after the U.S. government pioneered wartime aviation.

Could United Van Lines and Schneider Trucking exist without the interstate highway system? Could Walmart have grown as large without it?

What would American Airlines, Delta, Southwest and all the other carriers do without an FAA and air traffic control? Or the NTSB which investigates accidents and provides a fig leaf for the carriers to use when communicating with rattled fliers?

Perversely, the tobacco industry is as healthy as it is today in part because the Surgeon General’s office decades ago mandated warning labels which the industry first despised then later used as a shield against paying out billions in lawsuit judgements.

We know GM would not exist had the U.S. government told them to shove it. Same for Morgan Stanley, Merrill-Lynch, Bank of America and possibly Goldman-Sachs. Taxpayer-backed bailouts kept them alive.

And, Life Sciences/Pharmaceutical industry players like Mylan and AbbVie that are the biggest inversion-loophole pursuers have benefited tremendously from generous U.S. goodies like patent protection, world-class R&D (e.g. human genome sequencing) that is put into the public domain, and hundreds of billions in purchases of drugs, at retail prices no less, by Medicare and Medicaid.

So, yes – dodging American taxes while enjoying all the benefits of being an American company in every respect except your “domicile” is unpatriotic. You’re like the boorish guest who comes to a party without a gift for the host, and then bolts just as it’s time to clean up the mess. You don’t deserve to be awarded a government contract. And stay off our roads and stop using our water!

If you don’t like it, call in the Irish Marines.

RIP Johnny Winter

I was surprised to read of the recent death of bluesman Johnny Winter – surprised that he hadn’t died five years ago. Three or four years ago I attended an intimate concert featuring Winter and his band at the Bearsville Theater in Woodstock, and like many in the audience, was shocked when two stagehands escorted a visibly-weak Johnny by the elbows like a doddering hospice denizen to a folding chair in center stage.

Promo photo from the Bearsville Theater gig.

Johnny Winter played some damned-loud, badass stuff that evening, seated the entire time as though waiting patiently for the next order of all-you-can eat wings at Crapplebee’s. His feeble eyes, no doubt impaired by albinism, darted about; most likely he was unable even to see the audience given the glaring lights. Half way through the show, a middle-aged, Woodstock groupie climbed onto the stage and gave Johnny a big hug. The bouncers pounced, but I don’t think Johnny knew what hit him. He never missed a note; probably used to being accosted on stage by crazy women over the course of his memorable 40 year career in rock n roll.

Johnny Winter’s influence on music is undeniable. To wit: the opening band that evening at the Bearsville Theater was the Jonny Monster Band – a killer blues trio no doubt inspired by the white haired man who sat hunched like a codger under the hot lights picking out pure delta blues.

RIP Johnny Winter. And check out the Jonny Monster Band.

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