I’m a big fan of lower corporate tax rates.
I also want to eliminate worldwide taxation so American companies can be on a level playing field when competing for market share around the world.
And I want to get rid of the double taxation of dividends and capital gains in part because these reforms will boost business investment.
Given this track record, I don’t think anybody could accuse me of being an anti-big-business activist.
But I do get very irritated when politically connected corporations use cronyism to guard their interests at the expense of other taxpayers and the overall economy.
That’s why, in this interview with Larry Kudlow on CNBC, I spend most of the time advocating for pro-growth policies, but near the end I slam corporate CEOs from the Business Roundtable for endorsing higher tax rates for small businesses.
For those who don’t follow the intricacies of business taxation, most small companies – such as sole proprietorships, partnerships, and S-corps – are taxed through the personal income tax.
So it’s a bit outrageous when corporate CEOs endorse higher personal income tax rates, knowing that their smaller competitors will get reamed.
I don’t think they’re doing it just for that purpose. As I say in the interview, it’s more a case of feeding somebody else to the sharks out of a narrow, short-term sense of self preservation.
But this also explains why I am such a strong believer in the no-tax-hike pledge. Once “revenue enhancement” is part of the discussion, taxpayers lose their sense of unity and begin to throw each other overboard.
And this isn’t just something that happens among Washington insiders. I’ve previously explained that ordinary Americans get very tempted to support class-warfare tax hikes once they realize someone is going to be raped and pillaged by Washington.
This is why, to discourage talk of tax hikes (especially by crony capitalists), I am willing to make a special exception and support an excise tax on CEO salaries. Anybody who endorses higher taxes should be first in line for the guillotine.
P.S. I apologize for the poor quality of the video. The guy at Cato who does these things is out for the holidays, and you see the suboptimal results when I dabble in technical things. And since I’m acknowledging my shortcomings, I should have said “obediently” instead of “appropriately” at the 3:44 mark.
[…] explained during a recent speech in Poland that I get very upset when big companies support policies that disproportionately harm small […]
[…] P.S. The Chamber of Commerce is not the only business association governed by fools. Yes, I’m referring to the Business Roundtable. […]
[…] I make the all-important point that profits are laudable – but only if they are earned in the free market and not because of bailouts, subsidies, protectionism, or a tilted playing field. […]
[…] Washington is filled with dishonest and self-serving analysis. Much of that shoddy output is driven by privileged groups seeking bailouts, subsidies, protectionism, or a tilted playing field. […]
[…] as I wrote in 2012 that a tax increase on small businesses would tilt the playing field in favor of big […]
[…] as I wrote in 2012 that a tax increase on small businesses would tilt the playing field in favor of big […]
[…] as I wrote in 2012 that a tax increase on small businesses would tilt the playing field in favor of big […]
[…] Back in 2012, I criticized the Business Roundtable for embracing tax increases on small businesses, so you can see that the Eleventh Theorem of […]
[…] then they should ask him for a yes-or-no answer on whether he will support legislation specifically increasing the tax rate on CEOs of investment funds. And follow that with a question of whether he endorses higher capital gains […]
[…] análises, incluindo a percepção muito importante de que a regulamentação e a intervenção tendem a ajudar as grandes empresas em detrimento das empresas pequenas e novos […]
[…] Second, complicated taxes and regulations are a much bigger burden for small companies compared to big corporations. Every large firm has teams of lawyers and accountants to deal with tax and regulatory compliance. That’s expensive and inefficient, of course, but such costs nonetheless consume only a very small fraction of total revenue. For small businesses, by contrast, those costs consume an enormous percentage of time, energy, and resources for owners. For all intents and purposes, bad government policy creates a competitive advantage for big firms over small firms. […]
[…] Second, complicated taxes and regulations are a much bigger burden for small companies compared to big corporations. Every large firm has teams of lawyers and accountants to deal with tax and regulatory compliance. That’s expensive and inefficient, of course, but such costs nonetheless consume only a very small fraction of total revenue. For small businesses, by contrast, those costs consume an enormous percentage of time, energy, and resources for owners. For all intents and purposes, bad government policy creates a competitive advantage for big firms over small firms. […]
[…] Second, complicated taxes and regulations are a much bigger burden for small companies compared to big corporations. Every large firm has teams of lawyers and accountants to deal with tax and regulatory compliance. That’s expensive and inefficient, of course, but such costs nonetheless consume only a very small fraction of total revenue. For small businesses, by contrast, those costs consume an enormous percentage of time, energy, and resources for owners. For all intents and purposes, bad government policy creates a competitive advantage for big firms over small firms. […]
[…] adds some analysis, including the very important insight that regulation and intervention tends to help big companies relative to small companies and new […]
[…] they’re perfectly happy to support higher taxes, at least when the rest of us are being […]
[…] they’re perfectly happy to support higher taxes, at least when the rest of us are being […]
[…] P.P.S. Since we just reviewed research on how big corporations can benefit by supporting regulations that will disproportionately hurt their small competitors, you probably won’t be surprised to learn that some of those same big companiessupport tax hikes that will be especially damaging to small businesses. […]
[…] P.P.S. Since we just reviewed research on how big corporations can benefit by supporting regulations that will disproportionately hurt their small competitors, you probably won’t be surprised to learn that some of those same big companies support tax hikes that will be especially damaging to small businesses. […]
[…] should also be upset that big corporations sometimes support higher tax rates on their competitors from the small business […]
[…] You’ll notice that the video in this post has good quality, unlike the fuzzy resolution and discontinuous footage in clips I’ve recently shared. That’s because Cato’s expert on such […]
[…] You’ll notice that the video in this post has good quality, unlike the fuzzy resolution and discontinuous footage in clips I’ve recently shared. That’s because Cato’s expert on such […]
[…] this is called crony capitalism and too many people mistake it for real capitalism. Believers in capitalism believe in freedom, […]
[…] You’ll notice that the video in this post has good quality, unlike the fuzzy resolution and discontinuous footage in clips I’ve recently shared. That’s because Cato’s […]
[…] P.P.P.S. This is my second attempt at creating a video in the absence of the Cato expert. There’s a hiccup around the 2:25 mark, but I think the picture quality is much better than my first effort. […]
[…] P.P.P.S. This is my second attempt at creating a video in the absence of the Cato expert. There’s a hiccup around the 2:25 mark, but I think the picture quality is much better than my first effort. […]
The French term Dirigiste suits as well.
Sitting in the audience last May where the Governor, Mayor, Chamber of Commerce, and various connected Big Businesses like defense contractors spoke on what Business needed from education, I came home and wrote this piece http://www.invisibleserfscollar.com/didnt-adam-smith-write-a-book-explaining-why-this-is-a-bad-idea-back-in-1776/
It’s Mercantilism and most people do not know the difference between Mercantilism and free markets. This agenda of a planned, redesigned Ecosystem economy is not going to work. It would be good if we could explain both why and what is happening.
CINO?
Please!
There are no ‘crony “capitalists.”‘
A Capitalist absolutely may not be “adjectivealized!”
Once that happens you’re, at best, dealing with a crony-corporatist!
With a CINO!
The only reason there is a whole lot of money in politics is that there is a whole lot of money in politics. Businesses would not fork over hundreds of thousands of dollars for lobbyists and political contributions if there was no return on that investment.
If we want to take the Crony out of Capitalism we could do it by lowering tax rates.