As of Sunday, that’ll be true.
The Washington Examiner posted this graphic, which originally came from the Senate Republican Policy Committee, today…
When you’ve got the highest corporate tax rate in the world, which we will have on Sunday after the Japanese corporate tax rate cut goes into effect, it’s virtually impossible to expect that your economy will grow.
And furthermore, nobody actually pays that tax. The tax code is replete with loopholes, tax breaks and examples of special treatment which make it virtually impossible for small businesses to compete with lawyered-up and lobbyist-armed major corporations who have the resources to tailor their operations not to pay taxes.
Everybody knows that our corporate tax rate needs to come down. Even our illustrious president, who spends much of his time attempting to demonize one element of the private sector or another, has offered to cut the rate to 28 percent. But of course to get that passed would require an actual effort at pushing legislation, and he didn’t even do that when he had a Congress full of Democrats.
Obama’s proposal, moreover, has some $350 billion in offsetting tax increases. That’s a poison pill which prevents agreement by Republicans.
And the myriad Republican proposals to lower the corporate income tax have gone nowhere in the Senate, where people like Harry Reid and Chuck Schumer couldn’t possibly agree to take them up without Obama giving his assent.
Meanwhile, it’s worth examining why we have a corporate tax in the first place. In 2010 corporate tax revenue to the federal government was all of $195 billion.
That seems like a lot of money, but when you consider that this is what the federal government is bringing in with what will now be the highest corporate tax rate in the world it’s not so impressive.
And it’s destructive to have that tax.
Remember all the talk about the $2 trillion in U.S. corporate revenue that’s parked overseas because its owners don’t want to pay taxes on it? Get rid of the corporate income tax and there’s no reason why that capital wouldn’t come home.
How many $50,000-a-year jobs can you create with $2 trillion in capital? How about 40 million? We don’t even have 40 million people out of work who could fill those jobs, meaning an injection of $2 trillion in private capital which went completely to job creation would make for a massive labor shortage in this country and drive wages up largely across the board.
And since, on average, a $50,000 income is taxed around 10 percent each one of those jobs would be worth $5,000 a year in federal revenue. by pure static analysis if you created 40 million jobs at $50,000 in income it would be worth $200 billion a year in federal revenue and getting rid of the corporate income tax would pay for itself.
You wouldn’t create 40 million jobs with that $2 trillion. You might create 10 million jobs, though, meaning you’re $145 billion short. But how much federal spending could go away if you didn’t have to give 10 million people endless unemployment benefits, Medicaid or food stamps?
And if we’re no longer making corporations waste money on lawyers, lobbyists and accountants to avoid a 35 percent tax burden – or pay those taxes – what effect would that have on consumer prices? We know that tax burden is being passed on to the consumer just like every other cost businesses incur. Given the current prices of food and gas, among other things, in Obama’s America, it sure might be nice if people had an opportunity to actually save money at the store. That would mean more disposable income, and quite likely more consumer spending as defined in the number of purchases.
And a higher standard of living.
It would also likely mean more research and development, more foreign investment in the United States, more technological innovation, more entrepreneurship and an overall faster economic growth.
That means more rich people, which we should all want. But of course the Left doesn’t want more rich people, unless those rich people are dependent on government favors to get rich.
And that’s why there will be resistance to cutting the corporate income tax no matter how stupid it is.
So enjoy the distinction of living in a country whose power and prestige on the national stage came largely from the development of the world’s most successful and iconic corporate entities but now punishes its corporate sector with the worst tax system on the planet. And remember that it’s not this way by accident.
Elections mean things. We’ve elected people who gave us the system we have.
UPDATE: And of course naturally we’re going to send our retard Vice President out to advocate that there be a global tax on manufacturing to address this situation.
How come Obama didn’t make this case himself? Anyone?