I think there are four major industries making substantial contributions to the 2000s Lost Decade, which has gotten us to where we are today, with:
…..$14.3 trillion of US debt
…..Unemployment rate of 9.2%
…..Combined Unemployment/Underemployment rate of more than 16%
…..The Employed full-time, scared to death of losing their jobs
…..The Elderly flat out scared.
…..High percentage of homes underwater
And these four major industries are:
…..Big Oil
…..Big Financial
…..Big Health Insurance
…..Big Pharma
And it’s really just a handful of very greedy Big Corps in these four industries that have caused this incredible damage to the US economy.
These handful of Big Corps in these four industries are all spending tons of money now, attempting to restore their incredibly damaged Brand. And, Big Corps in Health Care are also now investing a lot of money trying to lock up new health care customers.
These brand costs include public relations costs, government relations costs, advertising costs and marketing costs. And these costs are both internal ones and external ones.
We are continually bombarded over the airways with ads of these Big Corps, attempting to restore their severely damaged brands.
And in the beginning of the year when you turn 65, it is just incredible all the mailings you get bombarded with from Big Health Insurance Corps, attempting to scare you to death, and locking you in as a health insurance customer from the time you are 65 until the day you die.
Anyway, for federal income tax purposes, my first proposal would be to amortize over a reasonable period of time, all internal and external costs incurred by Big Health Insurance Corps, where they are in substance, investments made in an attempt to acquire new health insurance customers. I think this reasonable period of time for amortization would be the average length of time these Big Health Insurance Corps would get a premium earnings stream from these customers. And if you wanted to short cut this, perhaps an amortization of 15 years would be reasonable. These costs are presently immediately tax deducted, for federal income tax purposes.
My second proposal, for federal income tax purposes, would be to amortize over the remaining patent life of the specific drug, all advertising and marketing costs, both internal and external ones, made by Big Pharma related to the specific drug being marketed. These costs are presently immediately tax deducted, for federal income tax purposes.
My third proposal relates to all of the remaining substantial internal and external brand restoration costs of these Big Corps in all four of these industries, including public relations costs, government relations costs, advertising costs and marketing costs.
Why in the world should the US Government give these Big Corps tax incentives of an immediate federal income tax deduction for these investments that they are making attempting to restore their severely-damaged brands?
And why should the ones so severely hurt by their actions…..US citizens…..be the ones that should now be effectively paying them, through an immediate federal income tax deduction, for their attempts to restore their brand?
It’s like….OK, you really hurt me economically, and now you want to pile on by making me pay you in your attempt to look better? This is flat out crazy!
What is fair? Perhaps, no federal income tax deduction at all…..or perhaps, a 15 year amortization like brand acquisitions get.
But clearly, these Big Corps in these four industries should be ponying in quite a healthy amount of money to help the country get out of its horrible employment and deficit mess.
They can do this in a fair way, and have the economic effect softened, by being required to have the federal income tax benefit of their brand restoration costs delayed for a while, by having it amortized over a reasonable period of time…..perhaps, 5 years would be reasonable.
By doing this, these Big Corps would be chipping in to help the US get out of its economic crater on both the employment and debt front.
I would only require the changes from immediate tax deduction to an amortization period of 5 to 15 years for the above brand and health care customer investment costs for just the really Big Corps in these four industries. Thus, the Big 5 Oil Companies operating heavily in the US, including Royal Dutch Shell and BP, the Big 2 Health Insurance Corps, and then perhaps the largest five to ten US corps in both the Big Financial and Big Pharma industries.
The economic damage to Big Corps from this proposal is substantially softened here due to this corporate tax loophole closer being treated as a Temporary Tax Difference under US generally accepted accounting principles. The total federal income tax deductions for these Brand and other expenditures will be the same over the long run. Thus, there will be no income tax charge to the income statements of these Big Corps from my proposals here.
There will be substantially positive CBO scoring to the US Government from these proposals, for the next 10 years and for many years thereafter.
