An incestuous web between big corporations and government regulators is sucking the lifeblood out of taxpayers and small businesses, according to a just-published book by Timothy Carney, a journalism fellow at the Competitive Enterprise Institute. Carney, author of “The Big Ripoff: How Big Business and Big Government Steal Your Money,” exposes a dirty little secret of government spending: Most of the billions government spends “for the public good” eventually wind up in private bank accounts.
This book should be read by every Northern Virginia taxpayer for a chapter aptly titled “You Get Taxed, They Get Rich” in which Carney illustrates this dynamic by examining how former Gov. Mark Warner pushed through the largest tax increase in the commonwealth’s history. Warner, now a presidential hopeful, was helped by the state’s top business leaders, who themselves spent more than $7 million lobbying for higher taxes, instead of the other way around.
This only makes sense when you consider:
» Higher overhead puts smaller competitors at a disadvantage, which is why the National Federation of Independent Business opposed the unsuccessful 2002 sales tax referendum supported by the state Chamber of Commerce and the Northern Virginia Roundtable.
» Large companies are more likely to compete for — and win — lucrative government contracts, transferring wealth from taxpayers and small businesses to big firms.
» Big developers, mortgage brokerage firms, construction companies and real estate speculators who spent more than $7 million supporting the tax referendum and Warner’s 2004 $1 billion tax increase knew they would get it back in some form of corporate welfare.
“Big business and big government prosper from the perception that they are rivals instead of partners [in plunder],” Carney explains. The rivalry myth is so central to the popular notion that government keeps big business in check — instead of helping it stay big — that few people ever question why business leaders like those in Virginia are often the first to lobby for more taxes and regulation, not less.
Another example Carney cites is former energy giant Enron’s active support for the anti-global warming Kyoto Protocols. It turns out that Enron executives were a step ahead of the game and had already figured out how to profit from the controversial treaty by investing in natural gas pipelines and coal-fired plants in Third World countries not covered by it. “Higher prices for coal and oil would be good for Enron and bad for us,” Carney points out.
It also explains why Richmond-based tobacco giant Philip Morris today has what Carney calls “one of the coziest relationships with government” despite the 1998 Master Settlement Agreement that requires huge annual payments to state governments. Yet only 2 percent is spent on anti-smoking programs, according to GAO. Worse, the states borrowed nearly $20 billion against future settlement payments, making them partners of Big Tobacco with a vested interest in making sure Philip Morris lives to pay another day.
Government, in other words, often helps the rich get richer at your expense.
