Tag Archives: Tax Foundation

Twilight of Capitalism: Number of U.S. corporations at lowest level in 40 years

“If you’ve got a business — you didn’t build that. Somebody else made that happen.” -Obama in a campaign speech on July 13, 2012, in Roanoke, Virginia.

“We don’t believe anybody is entitled to success in this country.” -Obama in a campaign speech on Oct. 5, 2012, in Fairfax, Virginia.

you didn't build that

For more than six years, America’s entrepreneurs and businesses have been subjected to a stream of verbal abuses from a President whose own life has been one of privilege and mediocrity, instead of his “poor me” portrayal of himself as a child of a single mother who spent his childhood in an impoverished Third World country (Indonesia) and then was raised by his grandparents in difficult circumstances. (More on that later.)

So it shouldn’t surprise us that after years of Obama’s hectoring, the can-do spirit of American capitalism seems to have petered out.

Ali Meyer reports for CNS News, Feb. 19, 2015, that the number of business corporations in the United States has hit the lowest level seen in 40 years, according to data from a report by the Tax Foundation.

It doesn’t take an Einstein genius to know that fewer businesses mean fewer jobs and less tax revenue for the government.

The report, “America’s Shrinking Corporate Sector,” states that “recently released IRS data shows that there were 1.6 million C corporations in 2011. This is the lowest number of traditional corporations since 1974 and 1 million fewer than there were at the peak in 1986. In other words, in every year since 1986, roughly 40,000 U.S. corporations have disappeared from the tax rolls. However, the losses have accelerated since 2006 to a rate of about 60,000 per year.

While C corporations have seen a decline in number over the years, the number of partnerships and S corporations have increased.

Note: C corporations generate more tax revenue for the federal government because they face double taxation due to the corporate tax and shareholder taxes on dividends on capital gains. In contrast, S corporations and partnerships are subject to just one layer of tax, the individual income tax, because they pass their profits to owners who report them on their individual tax returns.

 The Tax Foundation’s report explains:

“The decline of the traditional corporate sector has generally coincided with the rise of the pass-through sector, comprised of businesses such as partnerships and S corporations that pass profits to owners who report them on their individual tax returns. Pass-through businesses are subject to just one layer of tax, the individual income tax, while C corporations face double taxation due to the corporate tax and shareholder taxes on dividends and capital gains.”

But the problem is more than C corporations being eclipsed by S corporations, as the latter aren’t doing that well either. The report explains that in addition to a decline in the number of corporations, business sector growth and profits have taken a dip as well:

“The recession and subsequent slow recovery have led to slow overall growth in the business sector. As a result, the growth rate of pass-through entities have tapered off in recent years.

Since 2006, S corporations have grown at a rate of about 1 percent a year, down from a rate of about 8 percent in the 20 years prior. Likewise, partnerships have grown at a rate of about 2 percent a year since 2006, down from a rate of about 3 percent in the 20 years prior.

Not only has the total number of traditional corporations declined, so has the total of their profits. C corporation profits, while extremely volatile, have generally trended downward as a share of GDP in recent decades, while the profits of S corporations and partnerships have trended upwards.”

The irony is that when Obama told entrepreneurs, “You didn’t build that!” and “You’re not entitled to success in this country” ’cause it’s all due to “blind luck” and piggy-backing on “a generation of women doing someone else’s laundry and looking after someone else’s children to get you here,”Obama is projecting his life history onto us. It is his success that’s all due to blind dumb luck.

*Obama said that in his keynote address at the Harvard Law School Association “Celebration of Black Alumni” Award Luncheon on Sept. 17, 2005. (WND)

For the truth is Barry Soetoro Barack Hussein Steven Dunham Obama grew up in privilege. He was born to a maternal grandmother (Madelyn Dunham) who was the vice president of a bank in Honolulu. From ages 6 to 10, Obama lived in the home of his stepfather, Lolo Soetoro, in an exclusive section of Jakarta, Indonesia. The family was so well off that they hired a gay transvestite nanny to look after young boy Obama.

As recounted in the Washington Examiner‘s Special Report “The Obama You Don’t Know,” when he was 10 years old, mommy sent him back to Honolulu to live with his maternal grandparents who paid for his education at the costly élite private Punahou School — one of the most expensive schools in Hawaii — which Obama attended from 1971 to 1979. Obama admitted in his memoir, Dreams From My Father, that his grandfather had pulled strings to get him into Punahou: “There was a long waiting list, and I was considered only because of the intervention of Gramps’s boss, who was an alumnus.”

After he graduated from Punahou, Obama went across the Pacific Ocean to attend the private Occidental College in Southern California. Today, tuition for a full-time student at Occidental College is $43,490 per year, which doesn’t include room-and-board and the costs of books and supplies.

After two years at Occidental, Obama transferred to another expensive private university, Columbia University, where no student or faculty can remember ever having seen him in the two years he supposedly spent there, reportedly graduating with a mediocre 2.6 (B-) GPA . Despite his lackluster GPA, he was admitted to yet another expensive private university, Harvard University Law School.

By his own account, Obama was a mediocre student in high school and college who lived a “party” lifestyle of cocaine and booze. Since he refuses to make public his college records, including his GPAs at Occidental, Columbia University, and Harvard Law School, as well as his SAT and LSAT scores, we can assume that those records are lackluster because, being the grandiose narcissist that he is, he would most certainly make known those records if they were sterling.

After Harvard Law, he taught for 12 years at University of Chicago Law School as a part-time lecturer, not professor. Despite Time magazine gushing in 2008 about Obama being “a rock-star professor with hordes of devoted students,” his law student evaluations show him to be a mediocre teacher. After his first two years of teaching, his popularity fell steadily. In 1999, Obama was the third-lowest-ranked lecturer at Chicago Law School that year, with only 23% of students saying they would repeat his racism class. By 2003, only a third of the student evaluators recommended his classes.

And, unlike others on the Chicago Law School faculty who published numerous articles in legal journals, Obama’s byline did not appear in a single legal journal while he taught there. Nor did he publish any articles in legal journals before and after his stint at Chicago Law School, which is puzzling for someone touted as “the smartest man ever.”

While he was teaching part time at Chicago Law, he served one singularly undistinguished term in the Illinois State Senate. According to Gov Track.us: “From Jan 2005 to Oct 2008, Obama missed 314 of 1300 recorded or roll call votes, which is 24.0%. This is worse than the median of 2.4%.”

Then he was elected to the U.S. Senate where, after having served only two lackluster years, he decided to run for president and became his party’s nominee. During the 2008 presidential campaign, he was hailed as messiah and compared to Jesus, despite his mediocrity and in spite of his pro-abortion and pro-infanticide positions that are the antithesis of Christ. With just a vague campaign slogan of “Hope and Change,” millions of Americans projected their dreams and fantasies onto this man whom the media deliberately refused to vet, and elected him President of the most powerful country on Earth.

After just 9 months as president, without a single foreign policy achievement, he was awarded the 2009 Nobel Peace Prize.

In other words, when Obama decries success as due to blind dumb luck, he was describing himself. For surely, his astonishing successes are not due to any excellence on his part.

Yes indeed, Obama. You didn’t build that! And you most certainly didn’t earn, don’t deserve, and are not entitled to your success.

See also:


Best and worst states for business

The Tax Foundation recently released its rankings on the business-friendliness of the tax system of America’s 50 constituent states.

The foundation’s State Business Tax Climate Index, now in its 8th edition, accounts for dozens of state tax provisions, creating a single easy-to-use score that measures each state against the tax climates of every other state. Each state’s ranking is therefore relative to the actual tax policies in place around the country, not a measurement against a theoretical “perfect” system.

The Index enables business leaders, government policymakers, and taxpayers to gauge how their states’ tax systems compare. While some similar studies focus on the total amount residents pay in taxes each year, the Index focuses on how the elements of a state tax system enhance or harm the competitiveness of a state’s business environment.

Tax Foundation economist Mark Robyn explains: “Even in our global economy, a state’s stiffest and most direct competition often comes from other states. State lawmakers need to be aware of how their states’ business climates match up to their immediate neighbors and to other states in their region.”

The best states in this year’s index do not have one or more of the major taxes, and thus do not have the associated complexity and distortions. In contrast, the worst states generally have complex, non-neutral taxes with comparatively high rates.

10 best states for business:

1. Wyoming
2. South Dakota
3. Nevada
4. Alaska
5. Florida
6. New Hampshire
7. Washington
8. Montana
9. Texas
10. Utah

10 worst or least business-friendly states:

41. Iowa
42. Maryland
43. Wisconsin
44. North Carolina
45. Minnesota
46. Rhode Island
47. Vermont
48. California
49. New York
50. New Jersey

Tax Foundation Background Paper No. 62, “2012 State Business Tax Climate Index” by Mark Robyn is available online.