Filed under: Capitalism, Democrat Corruption, Domestic Policy, Economy, History, Politics, Regulation, Taxes, The United States | Tags: America's Corporate Taxes, Republicans v. Democrats, Treasury Secretary Jack Lew
Here’s the difference between Democrats and Republicans —clear and simple.
President Obama has nattered on about “Economic Patriotism” and what they call “Corporate Tax Inversion.” Some corporations are finding it to their advantage to locate their headquarters in a country with significantly lower taxes. Medtronic is acquiring the Irish company Coviden and moving its corporate headquarters to Ireland.
The problem is American corporate taxes — which are the highest, at 35 percent, among the advanced economies in the world. Not only that, but the U.S. also taxes the income that American corporations earn overseas — something no other country does.
Democrats are up in arms. How dare they pick up and move? It’s not even patriotic to not pay taxes in your own country. Democrats intend to make “Economic Patriotism” a major issue in the fall campaign. (Good Democrats all hate big business).
Treasury Secretary Jack Lew, who should know better, has advocated “anti-inversion legislation.” Democrats are afraid that if a few companies do this it will open the floodgates and all sorts of American companies will locate abroad. Corporations who operate in the United States would still pay taxes on all the income earned in the U.S. but they won’t be paying double taxes to a foreign country and to the U.S. That gets very expensive, very fast.
There is, of course a very simple solution. You cut the corporate tax rate back to a rate more in line with other nations — or, gasp, even below. Yes, this is a Republican thing. Republicans like to cut taxes. The result would be a burst of activity from business, hiring, expanding, growing. The economy might even actually recover. It is how we have recovered so quickly from past recessions when Republicans are in charge.
Burger King has purchased Canada’s Tim Horton chain of coffee and donut shops, and plans to move their headquarters to Canada, where tax costs will be 46.4% lower. Canada has lowered their corporate tax rate from 43 percent in 2000 to 26 percent today. How much tax revenue did Canada lose by the dramatic reduction in their corporate tax rate? None. The lower tax rate raises more money.
For Democrats, this simply does not compute.
Secretary Lew said the corporate tax moves would mean that “all other taxpayers —including small businesses and hardworking Americans—will have to shoulder more of the responsibility of maintaining core public functions that everyone, particularly U.S. businesses, depends on.” Sigh. This man is the Secretary of the Treasury!
Lew’s remarks, delivered at an event hosted by the Tax Policy Center in Washington, came the same day Bloomberg News reported that Sen. Charles Schumer (D-NY) will soon introduce a bill that would slash the amount of interest an inverted firm can deduct from its U.S. income from 50 percent to 25 percent.
Filed under: Capitalism, Democrat Corruption, Domestic Policy, Economy, Liberalism, Politics, Regulation, Taxes | Tags: America's Corporate Taxes, Free Markets / Free People, World's Highest
Democrats are not happy with President Obama, and they are trying desperately to change the subject from things like ISIS, and Russia, and foreign policy in general, ObamaCare, immigration, the miserable economy, and jobs, and jobs and jobs.
Their natural inclination is to focus on those things which arouse people’s passions, so naturally they are freaking out about Burger King’s plans to merge with Tim Horton’s Canadian coffee and donut chain and move to Canada. “Economic Patriotism” they cry, and moral panic and sheer rage that an American business would consider relocating for the simple reason of paying taxes. Obviously it’s time for my favorite quote from Walter Wriston:
Capital will go where it is wanted and stay
where it is well treated. It will flee from manipulation
or onerous regulation of its value or use and no
government power can restrain it for long.
The business of business is to make a profit. Liberals always want to impose other rules on business. They are deeply suspicious of the whole idea of profits. They are outraged at CEO salaries. Proper people work in service jobs, like government, or for foundations, or righteous causes or universities. Liberals are really quite conflicted about business. They were outraged by the Citizens United decision. And even more so by Mitt Romney’s claim that corporations are just people. On the other hand, they get enthusiastic support from some businesses like Google, or Facebook, but that’s different.
The problem isn’t just that America has the highest corporate taxes in the world, but that America collects taxes on the income earned in other countries., though those other countries collect taxes as well. Because they distrust business in general, Liberals have little hesitation in finding new and better ways to tax business.
Total tax costs are 46.4% lower in Canada than in the U.S. Is it really a surprise that Burger Kind wants to move there? Burger King would still pay their full taxes on income earned in the U.S. but their taxes on income earned in Canada would be taxed at Canadian rates.
The number one issue among American voters is unsurprisingly — jobs. If you vigorously try to maximize the taxes that American businesses pay, they will hire fewer people. If you raise taxes on business, they raise the cost of the goods or services they sell, or reduce their expenses, by cutting the number of people they employ.