Tuesday, September 2, 2008

More on income redistribution

The United States has made history—but it’s nothing to be proud of. For the first time, our statutory corporate income tax rate is 50 percent higher than the average rate of our international competitors. At 39.3 percent, it stands second only to Japan’s, and the prognosis for U.S. business is not good. According to a new study by the Paris-based Organization for Economic Cooperation and Development (OECD), “Corporate taxes are most harmful for growth, followed by personal income taxes, and then consumption taxes.”

Apparently, the rest of the world has caught on, but while other nations have been slashing their rates, Washington politicos have refused to budge. Just last week, Sen. Byron Dorgan (D-ND) stated, “It’s time for big corporations to pay their fair share,” citing a Government Accountability Office statistic that 28 percent of large U.S. corporations did not pay income tax in 2005 (notwithstanding that 85 percent of these companies made no profits in 2005).

Barack Obama’s “solution” is to tax foreign profits where they are earned—in essence driving more American businesses offshore. Meanwhile, John McCain wants to cut the federal corporate tax rate to 25 percent, which is a good start but not enough. As The Wall Street Journal notes, Washington should seriously consider eliminating the corporate income tax altogether. Otherwise, U.S. corporations will increasingly find foreign shores more welcoming than our own.

Barack Obama is an avowed redistributionist when it comes to his individual income-tax plan. He has not been shy about his intention to raise taxes on the “wealthy” —variously defined as those earning anywhere from $100,000 to $250,000 or more per year. For those wondering what he would do with that money, look no further. Obama proposes $1,000 tax credits for those who pay little or nothing in federal income taxes. Not only that, but they would be “refundable,” meaning that if one’s tax bill is $300, the government would pay the taxpayer $700; if the taxpayer owes nothing, he gets the whole $1,000. This is nothing more than robbing one taxpayer and handing the money to one who pays very little or no tax at all. Some might call this the new welfare. Meanwhile, the top individual rate would be increased by 13 percent, to 39.6 percent. That’s the real change you can believe in.

Reprinted from the Patriot Post http://www.patriotpost.us/

“Now our opponents tell you not to worry about their tax increases. They tell you they are not going to tax your family. No, they’re just going to tax ‘businesses.’ So unless you buy something from a ‘business,’ like groceries or clothes or gasoline... or unless you get a paycheck from a big or a small ‘business,’ don’t worry... it’s not going to affect you. They say they are not going to take any water out of your side of the bucket, just the ‘other’ side of the bucket! That’s their idea of tax reform.” —Fred Thompson


Anonymous said...

As the hourly wage increases the democrats put us farther behind the rest of the world as far as corporate expenses are concerned, aren't they the ones who wanted a world economy?

Anonymous said...

If we are second only to Japan in corporate taxes, that would tend to have me believe that the USA is way over paid on a world income basis