A matter of public record
To the editor: In reference to Sherry Shaheen’s letter, “A nightmare of a bill” in the April 27 issue of The Press, I would like to comment further. Very few persons I have had contact with realize what Ohio House Bill 66 was, the tremendous damage it has done to the funding of public school systems in Ohio and the tax burden it has shifted to property owners. Ms. Shaheen made reference that the financial gains BP and Sun Oil made because of this legislation not being brought to light. This information should be a matter of public record, although it may be buried as the footnote in their annual reports.
One example of these corporate financial gains that I am familiar with is that of Norfolk Southern Corporation. NS operates Homestead Yard in Oregon, the Toledo Belt track through East Toledo and the former Conrail main line through Toledo, Northwood and Millbury. HB 66, enacted in June 2005, phased out the Ohio corporate franchise tax, which was generally based on federal taxable income. This phased elimination resulted in a reduction of Norfolk Southern’s deferred income tax liability, as required by Statement of Financial Accounting Standard No. 109, “Accounting for Income Taxes,” of $96 million. This figure comes from the provision for income taxes in the consolidated statements of income contained in the 2006 annual report of Norfolk Southern. Railroads, telephone companies and public utility companies all benefited from tax reductions enacted by HB 66. The Ohio corporate franchise tax, which helped fund Ohio’s public school systems, was eliminated to make Ohio more “business friendly.” The replacement of this lost tax revenue has been shifted to property owners and is a major reason school board are constantly placing levies on the ballot.
In all fairness, an Ohio commercial activity tax (CAT), which is based on current-year sales and rentals, has replaced the Ohio corporate franchise tax. Do you honestly believe that Norfolk Southern passed their $96 million tax savings onto their customers? Do you honestly believe that Norfolk Southern will absorb the cost of the CAT tax because it is still less than what would have been paid out under the corporate franchise tax? Or do you believe that Norfolk Southern rolled the $96 million into their profits and passes on the cost of commercial activity to their customer? Keep in mind this is only one corporation that has benefited from HB 66.
A new program
To the editor: For now, the “bottom” is in – that is, the bottom of this society’s ability to process reality. It may continue for a month or so, but we are done “doing business” in all the ways that we have been using. Let’s talk about the new program.
1. The revolving credit economy is over. The reason it can’t increase is that energy increases, also known as peak oil, was past in December 2005. Of course, nobody believes this right now because the price of oil crashed nine months ago, along with global manufacturing and trade.
Nothing has changed on the peak oil scene, except perhaps even more new oil projects have been canceled for lack of financing. This will boomerang on us in the form of much lower future oil production. The credit orgy is over. The “consumer” economy is also gone. Industrial growth as we have known it is over. It is over globally, too, though all regions of the world will not experience its demise the same way at the same rate.
China is basically screwed. They have less oil left than the U.S.A, which is not very much. China is also running out of water and food. Japan imports 90 percent of its energy. India imports over 80 percent.
Credit will not vanish everywhere overnight because it is not distributed equally everywhere. The lower and middle classes in the U.S.A. are now losing their access to it one way or another, personally and in small business. They will never get it back. Anyone who intends to thrive in the years ahead had better plan on doing it on the basis of accounts receivable. What they receive might not be in U.S. dollars. It may come in the form of gold, silver, local currency or bartering services or goods. The deeper meaning is the houses and cars that we have based the U.S. economy for decades, will have negative and chaotic results.
2. The suburban living arrangement is over. The suburban expansion was a 60-year orgasm of hypertrophy. We did it because we could. The loss of cheap oil and land will provoke a kind of national psychotic breakdown. In fact, it already has. The completely unrealistic expectation that we can resume this way of life is proof of it.
The immediate problem is that we cannot build any more of it. The next problem will be the failure of the stuff that already exists. The first stage is now palpable in the mortgage foreclosure fiasco. The tanking very quickly of malls, retail centers, office parks and other commercial property will accelerate. The next stage, which involves large demographic shifts in how we inhabit the landscape has not gotten underway.
3. The Happy Motoring Party is over. Smart media should understand with Chrysler in bankruptcy court and GM just weeks away from the same ceremony, that the foundation for everyday life in the U.S. was cracking. Instead, we hear blather about “market share” shifting to Toyota. News flash to Earth: cars, both domestic and foreign, will be much fewer. Estimates of seven million new cars globally are correct. Despite fantasies about hybrids, plug `n drive electric, hydrogen, etc., are as ridiculous as Brian Schwartz’s opinion column. Only the elite, which in Northwest Ohio does not exist, will be able to afford or operate them. Gasoline at retail will be $15-$20 per gallon. The roads and highways will fall apart very quickly because we will not be able to maintain them. Meanwhile, we remain completely un-serious about public transit. The airline industry will be toast inside of five years.
4. Our food production system is approaching crisis. There is no way we can continue the petro-agriculture system of farming. The pubic is absolutely zombified in the face of this problem. The gravity is not understood but will hit hard in fall of 2009. Public policy could reshape this situation by reactivation of smaller (three to 50 acres) local farm operations similar to the Amish culture without oil-based dependency on tractors, fertilizers and pesticides.
Personally, I think a lot of good things await us, but not the ones we’re expecting. No more buying Slurpees on credit cards. It will be very salutary to leave the junk empire we’ve accumulated. We can then move into an epoch of quality and purpose. For the moment, though, our hopes reside elsewhere.
Bring back American
To the editor: Well, Americans are you happy with all your foreign cars? You have virtually wiped out about 80 years of great automobiles.
You have also wiped out tens of thousands of jobs. You complained about our high wages, but didn’t say anything about what Hyundai pays their people. Yes, we have improved our products above the foreign models and yet you don’t buy U.S.
Yes, we have made mistakes, but it has made us stronger and more efficient. You want a hybrid? Ford has the Fusion with 45 mph – pretty good, I’d say. For a premium, try the Lincoln or Buick Lucerne.
Yes, let’s bring back American to America.