OPINION
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David vs. Goliath
Too much capitalism does not mean too many capitalists, but too few capitalists.
— G.K. Chesterton
America is on the verge of losing its unique free market characteristics forever, putting the American Dream at risk.
Where once we had an economy fueled by the innovative fires of entrepreneurs and small businessmen, we now have an economy that is largely controlled by — and for the sole benefit of — Big Government and Big Business working together in lockstep.
The inescapable fact is that the American Dream is slowly being transformed into a corporatocratic nightmare by a cast of characters that make the so-called robber barons of the Gilded Age (the period mostly between 1877 and 1900) look like amateurs.
While small businesses and the hardworking men and women who own and operate them are drowning in a sea of inflation, regulatory red tape, and seemingly endless tax increases, large megacorps have the armies of lawyers, lobbyists, and accountants necessary to navigate these restraints, and in many cases even profit from them.
Take Amazon, a burgeoning monopolistic behemoth which has a terrible track record of destroying small businesses who can’t hope to compete with its size and efficiency.
For fiscal year 2021, the massive corporation reported a record $35 billion in U.S. pretax income — 75% more than the $20 billion in U.S. earnings it reported in 2020.
The federal corporate income tax rate is 21% — yet Amazon pays an effective income tax of just 6 percent, paying only $2.1 billion in taxes instead of the $7.3 billion they would have owed under the 21% rate.
While some of the tax breaks Amazon uses to achieve this remarkable feat are technically available to small businesses, many simply don’t have the resources or know-how to take advantage of them.
But what takes the economic position of corporations like Amazon directly into the realms of the dystopian is that while they avoid paying massive amounts of taxes, they simultaneously take massive amounts of taxpayers’ money.
Between 2018 and 2021, Amazon paid $4 billion in federal income taxes to the government, but received over $3 billion in subsidies.
In total, the corporate giant has taken over $6 billion of taxpayers’ money.
Massive corporations also have the resources to weather regulatory storms that can sink many small businesses and — more importantly — navigate the sometimes-byzantine laws that govern their industries.
Indeed, Big Business has often historically been the loudest cheerleader for new regulations, knowing full well that they can afford to take financial hits that many of their small competitors cannot.
To make matters worse, rather than offering subsidies to spur small business growth and local community development, the federal government often prioritizes politically motivated subsidies that yet again often benefit only the big guys.
A great example of this is the myriad of green subsidies promoted by the Biden administration.
"Going green" is an expensive undertaking, and many small businesses will never be in a position to make the kind of investments in green energy that Big Business can.
The government has effectively created a climate in which massive companies can continue to grow exponentially, monopolizing their markets in the process, while small businesses slowly die off one by one.
In some cases, the government seems to go as far as assisting certain companies in building monopolies.
Take the example of Big Pharma.
Pharma patent protections grant de facto monopolies to the big players in the industry, and crafty pharmaceutical companies are frequently able to game the system in order to maintain monopolies on life-saving drugs for far longer than the law intends.
It’s clear that the government has its priorities wrong, to the detriment of everyone except the largest corporations and financial institutions.
Instead of subsidizing true economic growth through small business development, the government subsidizes tax breaks for companies like Amazon.
Instead of breaking up monopolies in the medical or entertainment industries, the government taxes and regulates small businesses out of existence.
Indeed, government policies have been fueling the corporatization of the economy for decades, and the exponential growth of big business has come at the direct expense of the small business economy — once the very backbone of the American Dream.
“In a comprehensive study, Professor Gustavo Grullon showed that the disappearance of small firms is directly related to increasing industrial concentration,” notes Jonathan Tepper in "The Myth of Capitalism: Monopolies and the Death of Competition."
"In real terms, the average firm in the economy has become three times larger over the past 20 years" and the "proportion of people employed by firms with 10,000 employees or more has been growing steadily," Tepper explains.
"The share started to increase in the 1990s, and has recently exceeded previous historical peaks. Grullon concluded that when you look at all the evidence, it points 'to a structural change in the U.S. labor market, where most jobs are being created by large and established firms, rather than by entrepreneurial activity.'"
This structural change is not just one of the labor market, but also represents a change to the very fabric of our national spirit.
A free market is necessary for a free people, and no market that is dominated by small smattering of giant corporations is a truly free one.
Voters must demand that our elected officials work to reverse our steady march towards corporatocracy.
Otherwise, the land that offered hope of the American Dream for all will be nothing more than an economic plantation built for the benefit of a tiny few.
Julio Gonzalez is the CEO and Founder of Engineered Tax Services, Inc.
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