I appeared on CNBC a couple of days ago to discuss a new report which claims that some big U.S. companies “only” paid 9 percent of their income to the government.
While I’m a bit skeptical of the numbers (did it include the taxes paid to foreign governments, for instance, which can be substantial for multinational firms?), I confess I didn’t read the report.
So I focused on the best way of getting rid of corrupt loopholes while simultaneously boosting the competitiveness of America companies.
In other words, I said we should rip up the wretched internal revenue code and implement a simple and fair flat tax.
As is my habit, allow me to emphasize a few points from the interview.
- It’s good to keep money in the productive sector of the economy because we shouldn’t feed the spending addiction in DC.
- If tax rates are low, there’s much less incentive for companies to lobby for loopholes.
- The only feasible and desirable tax reform is to simultaneously eliminate tax breaks while lowering tax rates.
- The marginal tax rate is what determines incentives for new investment and job creation, which is why America’s highest-in-the-world 35 percent corporate tax rate is a major problem even if average tax rates are much lower.
Sadly, I’m not holding my breath expecting improvements.
Even though tax reform should appeal to well-meaning liberals, Obama seems committed to the class-warfare approach . Romney, meanwhile, mostly wants to tinker with the current system (when he’s not saying worrisome things about a value-added tax).
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[…] Tax preferences and other loopholes bribe people to use resources inefficiently. […]
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[…] Since Leftists Don’t Like Corporate Loopholes, They Should Support the Flat Tax […]
@ddrik Do you mean GE managed to escape gas tax, sales tax, road tax, transportation taxes, taxes on labor, etc, etc…
Or do you just mean they paid little if no US income taxes? If so, this just demonstrates that they’re faithfully following their fiduciary duty to mimimize their overhead – which includes the income taxes they pay – and maximize the profit the corporation makes for its shareholders. Which probably includes your pension fund or future retirement income in one way or another!
Rather than complain GE are doing it wrong, see that whenever someone reduces the taxes they pay to the government, they improve things for everybody because then the government has less funds. Then they do less, which means less interference with you doing whatever you do. The smaller the government, the larger your freedom!
GE paid no US taxes last year while getting huge contracts fro the government and while CEO Imeldt serves as Presbo’s jobs czar and is moving GE jobs to China.
Personally I support the Fairtax as opposed to just a flat tax, because with the Fair tax it gets rid of the IRS.. which is definitely a segment of the Federal government that doesn’t do anything constructive and just uses up resources.