I believe everyone should read this paper by Thomas Sowell - Townhall Columnist. People who believe that taxing the rich accomplishes that goal are missing the total picture of how the economy works. You may even begin to understand why some like myself advocate for a 0% corporate tax. Right now the corporate tax just makes prices higher. A 0% would need to be coupled with a few other laws to keep people from abusing their corporations for personal expenses but written properly it would mean lower prices plus more economic activity. I would also change depreciation deductions to allow full write offs in the first year if they so choose. Once again to stimulate spending. Right now Obama is making a big deal about companies leaving the US for lower taxed nations. What he and others fail to explain is the following. Income in the US is still taxed in the US. Them moving location only influences the current double taxation that happens when foreign profits are repatriated. Current law allows those profits to be left outside of the US to avoid taxes. Apple does this. It also allows loans from foreign divisions to domestic ones and such interest paid to be written off and thus lowering taxable income. So what would a zero percent corp tax change? 1. Companies such as Apple could bring profits home. They could spend that money in the US without having to face double taxation (once where they made it and again here). 2. Large companies would consider moving into the US. No matter what you think we all know this will mean more jobs. 3. It would level the playing field. Large companies would no longer use tax breaks to their unfair advantage over smaller competitors. I would dare say that the data and common sense seem to show that as economic activity is consolidated into fewer companies that employment (and thus wages) go down because of the economics of scale. So I think this would lead to more jobs as well. And as in the past if we get money moving vs sitting (Apple is the perfect example) it leads to more tax revenue as you will see from reading this pdf. So read it and think about what I am saying. Those with money will always find ways to pay less taxes. In fact the actual tax rate (what people really pay) stays relatively the same no matter how much the the marginal rates change. So lets shift that money into economic growth vs. being kept in places to avoid taxes.
Posted on: Fri, 08 Aug 2014 17:48:43 +0000
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