Elizabeth Warren and Sherrod Brown Should Work With the Obama Administration to Make the Trans-Pacific Partnership (TPP) Trade Deal Fairer to the US Middle and Lower Economic Classes Instead of Just Lambasting It

There is little doubt that Bill Clinton's NAFTA Agreement ended up being flat out disastrous to the US middle and lower economic classes and simultaneously being extremely beneficial to US businesses and especially beneficial to large US Multi-National businesses.

So it is easy to understand why US Labor and well-meaning and usually correct Progressives like Elizabeth Warren and Sherrod Brown might question the economic fairness of the current Trans-Pacific Partnership (TPP) Trade Agreement.

But for anyone to assert that the TPP Trade Agreement would harm the US middle and lower economic classes to the same degree that NAFTA did is just pure lack of objectivity.

The Obama Administration has worked incessantly to exclude from this TPP Trade Agreement provisions that are very harmful to the US middle and lower economic classes and also to include in this TPP Trade Agreement provisions that are helpful to the US middle and lower economic classes.

But still this TPP Trade Agreement should indeed be improved further.

I agree with Warren and Brown probably more than 95% of the time and it would be very helpful if they both would run for US President because they have substantial differences with Hillary Clinton on so many key issues that clearly need to be debated publicly in front of the US Democratic Electorate.

But Warren shouldn't just loudly and repeatedly  lambast the Obama Administration on the TPP Trade Agreement and instead should work with the Obama Administration to improve it by making it fairer to the US middle and lower economic classes.

But to be fair, I do think that President Obama has been way too trusting of US large businesses, which have claimed over and over that his actions substantially benefiting them economically ..... to name just three of so many ..... 100% and 50% bonus first-year tax expensing of Tangible Personal Property Investments and the annual Christmas Basket of Tax Extenders .... would definitely trickle down to their US workers.  But frankly it just hasn't happened.

Thus when US multinational companies assert that yes this TPP Trade Agreement benefits them markedly but that there is no need to worry about this since they will fairly share this economic largesse with their US workers, the US Government should have the wisdom to realize that unless there are provisions in this TPP Trade Agreement that clearly require a fair sharing of these vast economic benefits with their US workers, that it won't happen.

What is needed in this TPP Trade Agreement are more provisions that directly benefit US workers.  Warren and Brown should be recommending specific things to include or exclude that will narrow rather than further expand US Income Inequality.  President Clinton's NAFTA was disastrous in this Income Inequality Expansion regard.

Further, large US multinational companies' assertion that the huge US Income Inequality situation is due mainly to US workers not having the necessary high-level work skills is very self-serving, lacks intellectual merit and frankly is extremely mean-spirited.  All US workers don't have the same natural ability to acquire many of these very desirable high-level work skills.  For example, they can't all be exceptional algorithmic computer coders, no matter how well-educated and how hard they try to be ..... just like I never could dunk a basketball and could not be quick afoot ..... despite working incessantly to both be able to jump high and be quick afoot.

But frankly I do think this .....  the TPP is just a drop in the bucket in driving the desperately-needed much higher real US GDP growth on a sustained basis than is wisely-designed Business Tax Reform, which is designed to massively benefit businesses but also designed to massively and directly benefit the middle and lower US economic classes on much more than just on a trickle down basis.  It would be much better if the US Government's focus was on Business Tax Reform rather than on the TPP Trade Partnership, which is designed in its present form to benefit primarily just certain companies having the Obama Administration's ear like Chicago-headquartered Boeing.

Grand Bargain on US Corporate Tax Reform is Needed for Sustained Robust US GDP Growth

Now is clearly the time for the Obama Administration, led by Jack Lew, to do an all out assault on driving upwardly and on a sustained basis the very tepid US GDP Growth Rate, which has been a python-like stranglehold on the US middle and lower economic classes.

The best way for very robust US GDP Growth lies in wisely-designed and yes wisely compromised US Corporate Tax Reform.

I think the key to jump-starting the US Corporate Tax Reform discussion is for the Obama Administration to pretty much buy in to the Republican position that on an overall basis, there will be no US Tax Revenues raised from it as the CBO measures it in its very conservative scoring.

And then in return, the Republicans have to be open to the position that one of the key desired results is to design US Corporate Tax Reform in such a way that the middle and lower US economic classes directly benefit substantially from it economically ..... and not just abstractly purporting that there will be some indirect benefit from it on a trickle down basis.

I do think that the assertion held in CBO scoring that there will be no US Tax Revenues raised if US long-term GDP Growth were to increase in the range of 1.0% to 2.5% per year to in the range of 3.0% to 4.5% per year makes absolutely no sense.  There will be massive amounts of US Tax Revenues raised from such a pronounced increase in long-term US GDP Growth.  On the other hand, if US GDP growth remains where it is now ..... about 1.0% to 1.5% per year ..... there will be massive amounts of Tax Revenue Reductions from what the CBO is now way too optimistically projecting because it is using much too high of a US Real GDP Growth projection.

A couple of bullet points on the best chance for successful, doable Corporate Tax Reform that substantially elevates US Long-Term GDP Growth:

• I would try to substantially reduce the top Corporate Income Tax Rate, not to just 28% but to 25%.  How can this be done?  It mainly lies in switching the tax life on all depreciable Property, Plant and Equipment assets to their economic lives used in their audited financial statements.  And it also lies in using mainly straight-line tax depreciation, which is consistent with what 90% of Companies use to depreciate these assets in their audited financial statements.  Companies would love a trade off of the removal of accelerated tax depreciation, including a removal of 50% first year bonus tax depreciation and even a removal of all of the 100% first year tax expensing under Section 179, for a much lower Corporate Income Tax Rate.  In the event that the US economy needs it several years down the road, Congress can always reinstitute Section 179 100% first-year Tax Expensing for smaller businesses.
• But it's not just Property, Plant and Equipment assets, but all assets on the balance sheet of a Company which I would switch the amortization tax deduction to the longer economic lives used in their audited financial statements, including among many other assets Intangible Assets, Movie Film Costs and Mortgage Servicing Rights.  Companies would prefer the huge Corporate Income Tax Rate Reduction over these accelerated tax deductions.   
• Nearly all companies would be willing to trade off the removal of LIFO Inventory for income tax purposes for a much lower Corporate Income Tax Rate.   Companies would then switch out of LIFO for financial statement purposes, thereby substantially increasing their reported earnings and also further strengthening their balance sheets.
• Frankly, nearly all companies would trade off the elimination of nearly every tax loophole for a reduction in the US Corporate Income Tax Rate from 35% to 25%.
• I would keep only one tax loophole.....the Research and Experimentation Tax Credit, and this one is so important to US economic success, to good-paying US job growth and to US national security that I would even substantially expand it.
• I would have a progressive Corporate Income Tax Rate something like this ..... 15% for all Corporate Taxable Income below $1 million, 20% for Corporate Taxable Income from $1 million up to $1 billion and 25% for all Taxable Income above $1 billion.  What this substantial drop in Corporate Tax Rates would do is to move many foreign jobs back to the US.  And what it would also do is to incentivize US Multinational Companies, especially the smaller and medium-sized ones, to repatriate back to the US much of their foreign earnings.  Further, these low Corporate Income Tax Rates would flat out stop the many huge Corporate Unpatriotic Tax Inversions that have occurred in the past several years, particularly in the Health Care Industry, which have made massive dents in US Government Tax Revenues and have given unfair economic advantage to these Companies over the many US Multinational Corps that have patriotically decided to not go the Corporate Tax Inversion Route.  The huge US Health Care Companies that have gotten massive US Tax Savings from these Unpatriotic Corporate Tax Inversions are, among many others, Medtronic, Actavis, Mylan, Covidien, Perrigo, Abbvie, Jazz Pharmaceuticals, Endo International, Thereavance BioPharma, Horizon Pharma, Steris, Wright Medical and Walgreens.  The many Companies outside of Health Care taking similar Unpatriotic action include among countless others Eaton, Chiquita Brands, Aon, Stratasys, Liberty Global, Applied Materials and Burger King Worldwide.  Due to these incredibly Unpatriotic Exceptionally Greedy Company-Over-Country actions, I think it is only fair that there should be some form of very substantial US Tax Revenue Clawbacks for these Companies that legally but not in substance moved their Corporate Headquarters to very low-taxed foreign tax havens.  One logical, fair approach to consider here would be to immediately income tax retroactively in the US at 35% all cumulative foreign earnings of US Multinational Companies once they have effectuated a Tax-Dodging Corporate Tax Inversions Scheme.
• I would consider adopting a Territorial Tax System (TTS), but because of its massive income-shifting maneuverability imperfections, I would allow this TTS only if it accompanied each year by a pretty significant US minimum tax on all Non-US Pretax Income computed under US GAAP, with several adjustments made to it to make it fair to all parties.   
• For fairness and for further expansion of US GDP Growth, I would also have all Business Income, after elimination of all tax loopholes, taxed at the Personal Income Level, including Schedule C Business Income, Pass-Thru SubS and LLC Business Income and Pass-Thru Partnership Business Income, at the very same Personal Income Tax Rates as I have above for Corporate Income ..... 15% for all Business Income less than $1 mil, 20% for Business Income from $1 mil up to $1 bil and 25% for Business Income above $1 bil.  
• Items to consider for inclusion in this Corporate Tax Reform in order to accomplish the goal of directly benefiting substantially the middle and lower income US economic classes:

1.  Expanded Earned Income Tax Credit
2.  Substantial Increases in US Infrastructure Investments
3.  Increasing the Federal Minimum Wage but with fair adjustments factored in for location Cost of Living Differences
4.  Increasing the Federal Maximum Unemployment Wages Used for Employer Federal Unemployment Payroll Tax computation purposes for annual increases in the Cost of Living 
5.  Private Financial Institutions making Education Loans like Sallie Mae and its successor Navient and many others whose net interest rate margins on these Education Loans are obnoxiously high should be assessed a windfall profits tax at 80% of the amount of the excessive margins they are generating on these Education Loans
6. Former and Current Student Federal Government Education Loans should be allowed to be refinanced at the lower current market interest rates.  And anyone in the US Congress who voted to not allow or refused to allow a vote on whether these Student Education Loans should be allowed to be refinanced to the current lower market interest rates should be very visibly identified to the US Public for his clearly Pro-Big Financial Institution and Anti-Former-and-Current College Student position.
7. Enhancing substantially the present US Research and Experimentation Tax Credit, after all this results in the direct creation of many US middle-income jobs since increased Research and Experimentation Costs are predominately New Employee Pay.  If Tax Revenues are needed to pay for this, I would require all R&D expenditures to be amortized over a one or a two year period for US Federal Income Tax purposes ..... after all, the overall average benefit period of aggregate R&D expenditures is much longer than two years.
8. Some additional incentives need to be implemented to induce Companies to increase their pay to existing employees.  One of the many ways to do this is to reduce Company payroll taxes on the annual increased Payroll Wages, after making adjustments to the computation for fairness.
9. Many Independent Contractors need to be reclassified to Company Employees.    

Of the above 9 Incentives to directly benefit the middle and lower US economic classes, only 2 of them would need to be paid for with US Government Tax Revenues or US Government Fees.  Thus to make this Grand Bargain totally Tax Neutral, I would pay for #6.....the reduction of interest rates on US Federal Government Student Loans..... by first using all of the windfall profits tax collected from private financial institutions which generate obnoxiously high net interest rate margins on their student education loans and second by using just a small portion of the massive amounts of US Debt reductions resulting from the huge Annual Earnings of both Fannie Mae and Freddie Mac.  And I would pay for #2.....the Substantial Increases in US Infrastructure Investments.....by directly linking them to the huge US Government Corporate Income Tax received from one-time foreign earnings repatriations applied at somewhat discounted US Corporate Federal Income Tax Rates, perhaps something like 15% to 17.5%.

Utah Companies Stock Market Prices Up 466% Since March 6, 2009

President Obama will be visiting Utah on this Thursday and Friday, April 2 and 3, 2015.  Thus, as a backdrop for this Presidential visit,  I think it would be helpful to update just what has been going on with Utah businesses and the overall economy there.

From a very thorough review of SEC filings, I found 15 Utah Headquartered Companies with current Total Market Capitalizations of at least $100 mil and which also had their common stocks trading on each of the following three dates:

• On December 31, 2007 before the financial meltdown hit
• On March 6, 2009, which was the lowest point for the US stock market due to the spillover effects resulting from the 2008 financial meltdown, and 
• also on the most recent date month end date March 31, 2015.

I included Sweden Headquartered, Auto Supplier Autoliv among these 15 Utah Companies since it has a Utah SEC State Location Code filing and since it has a majority of its Total Assets in the Americas and with its two largest customers being General Motors and Ford Motor.

The historical stock prices of these companies were obtained from the following two excellent internet resources....  Google Finance and MarketWatch Big Charts.

These 15 Utah Companies had their equal-company weighted average stock market prices decline by a huge 51% from December 31, 2007 before the 2008 Financial Meltdown hit to March 6, 2009, which was the very lowest point for the overall stock market due to the spillover effects resulting from the disastrous 2008 Financial Meltdown.

But in the six years and one month since March 6, 2009 through the most recent month end date March 31, 2015, the average stock market prices of these same 15 Utah Companies have increased by an exceptional 466%.

There has been something upwardly explosive happening with the Utah Companies Stock Market Prices and among others, country-first-over-political-party Utah veteran US Senator Orrin Hatch, very effective Utah Governor Gary Herbert, President Obama, Ben Bernanke and Janet Yellen have all undoubtedly helped here. 

In the chart below here are the stock market prices of each of these 15 Utah Companies on March 31, 2015, on March 6, 2009, and on December 31, 2007, along with the related Stock Market Price Percentage Changes.

						Market	Market	Market
						Price	Price	Price
						%	%	%
						Change	Change	Change
			Market	Market	Market	3-6-09	12-31-07	12-31-07
			Price	Price	Price	to	to	to
Utah Company	HQs		3-31-15	3-6-09	12-31-07	3-31-15	3-6-09	3-31-15
			$s	$s	$s
Headwaters	South Jordan	UT	18.34	1.39	11.74	1219%	-88%	56%
Extra Space Storage	Salt Lake City	UT	67.57	5.18	14.29	1204%	-64%	373%
Huntsman	Salt Lake City	UT	22.17	2.25	25.70	885%	-91%	-14%
Autoliv	Ogden	UT	117.77	12.33	52.71	855%	-77%	123%
Nu Skin Enterprises	Provo	UT	60.21	8.81	16.43	583%	-46%	266%
inContact	Salt Lake City	UT	10.90	1.75	4.50	523%	-61%	142%
Franklin Covey	Salt Lake City	UT	19.26	3.53	7.91	446%	-55%	143%
Zions Bancorporation	Salt Lake City	UT	27.00	6.48	46.69	317%	-86%	-42%
Nutraceutical Intl	Park City	UT	19.70	5.67	13.25	247%	-57%	49%
Overstock.com	Salt Lake City	UT	24.22	7.88	15.53	207%	-49%	56%
Utah Medical Products	Midvale	UT	59.86	22.40	29.72	167%	-25%	101%
Merit Medical Systems	South Jordan	UT	19.25	7.95	11.12	142%	-28%	73%
Black Diamond	Salt Lake City	UT	9.45	4.00	5.90	136%	-32%	60%
SkyWest	St George	UT	14.61	8.91	26.85	64%	-67%	-46%
Myriad Genetics	Salt Lake City	UT	35.40	37.05	22.13	-4%	67%	60%
Average Equal Company Weighted % Change all 15 Utah Companies						466%	-51%	93%

Utah 21 Largest Companies 3 Year 2012-14 Audited Earnings Were $5.628 Bil, An Earnings Improvement of $5.262 Bil or 1,438% Above 3 Year 2008-10 Audited Earnings of $366 Mil

President Obama will be visiting Utah on this Thursday and Friday, April 2 and 3, 2015.  Thus, as a backdrop for this Presidential visit,  I think it would be helpful to update just what has been going on with Utah businesses and the overall economy there.

From a very thorough review of SEC filings, I found 21 Companies headquartered in the State of Utah with Stock Market Capitalizations of at least $100 mil now and also with annual audited financial statements filed with the SEC which included financial information covering all years from 2008 to 2013.

I included Sweden Headquartered, Auto Supplier Autoliv among these 21 Utah Companies since it has a Utah SEC State Location Code filing and since it has a majority of its Total Assets in the Americas and with its two largest customers being General Motors and Ford.

These 21 Utah Companies generated Total Audited Earnings from Continuing Operations of $5.628 bil in the most recent three fiscal years combined (2012 through 2014), which was a very impressive $5.262 bil Three Year Earnings Improvement, or an increase of 1,438% above the comparable Total Audited Earnings of $366 mil in the three fiscal years combined (2008 through 2010).

Among others, President Obama, Ben Bernanke, Janet Yellen, country-first-over-political-party  Utah US Senator Orrin Hatch, and very effective Utah Governor Gary Herbert have all undoubtedly helped in this massive earnings improvement of Utah Companies. 

Below here are the Audited Earnings (Losses) of each of these 21 largest Utah Companies for each of the Fiscal Year Ends (FYEs) 2007 through 2014:

			2014	2013	2012	2011	2010	2009	2008	2007
			Audited	Audited	Audited	Audited	Audited	Audited	Audited	Audited
			Net	Net	Net	Net	Net	Net	Net	Net
	City	2014	Income	Income	Income	Income	Income	Income	Income	Income
Utah Company	HQs	FYE	(Loss)	(Loss)	(Loss)	(Loss)	(Loss)	(Loss)	(Loss)	(Loss)
			mil $s	mil $s	mil $s	mil $s	mil $s	mil $s	mil $s	mil $s
Autoliv	Ogden	Dec	469	490	486	627	596	13	172	296
Zions Bancorporation	Salt Lake City	Dec	398	263	348	323	(296)	(1,222)	(271)	502
Huntsman	Salt Lake City	Dec	353	154	378	251	(9)	125	512	61
Extra Space Storage	Salt Lake City	Dec	196	186	128	58	33	39	43	35
Nu Skin Enterprises	Provo	Dec	189	365	222	153	136	90	65	44
Myriad Genetics	Salt Lake City	Jun	176	147	112	101	152	136	74	45
Usana Health Sciences	Salt Lake City	Dec	77	79	66	51	46	34	30	46
Merit Medical Systems	South Jordan	Dec	23	17	20	23	12	23	21	16
Franklin Covey	Salt Lake City	Aug	18	14	8	5	(1)	(11)	5	7
Headwaters	South Jordan	Sep	16	8	(26)	(134)	(21)	(415)	(175)	21
Nutraceutical Intl	Park City	Sep	16	17	16	16	16	(15)	12	13
Utah Medical Products	Midvale	Dec	11	11	10	7	6	6	7	8
Natures Sunshine Products	Lehi	Dec	10	18	25	18	8	7	1	(6)
Zagg Inc	Salt Lake City	Dec	10	5	15	18	10	3	2	(1)
Overstock.com	Salt Lake City	Dec	9	84	15	(19)	14	8	(11)	(44)
Control4 Corporation	Salt Lake City	Dec	8	4	(4)	(4)	(16)	(8)	(18)
Skullcandy	Park City	Dec	8	(3)	26	19	(10)	12	13	6
Black Diamond	Salt Lake City	Dec	(9)	(11)	(1)	5	51	(5)	(2)	0
inContact	Salt Lake City	Dec	(11)	(10)	(6)	(9)	(1)	(3)	(10)	(8)
Ancestry.com	Provo	Dec	(19)	(80)	(2)	63	37	21	2	6
SkyWest	St George	Dec	(24)	59	51	(27)	96	84	113	159
Total all 21			1,924	1,817	1,887	1,545	859	(1,078)	585	1,206
Three Year Total Earnings:
…2012 Through 2014			5,628
…2008 Through 2010			366
…Total Earnings Improvement			5,262
…Total Earnings % Improvement			1,438%