In the old Wild West, the way for the sheriff to keep peace in his town was to pull out his Colt six-shooter. In today’s Democratic controlled Congress the way to keep peace with constituents is to pull out their ordnance of tax increases to shake down our businesses. Both of them can inflict great pain.
The U.S. may have a lost a step or two as the world’s leading economic power, but when it comes to taxing our corporations until they flee our shores and taxing the rich until there are rich no more, America is clearly at the front of the line.
Consider this. Nearly half of our states when combining federal and state income taxes already lead the world in the highest corporate tax rates of any industrialized country. If Iowa, Pennsylvania and Minnesota were countries they would be the top three highest taxed in the world. Massachusetts, Alaska and New Jersey would be four, five and six.
Twenty-four U.S. states have a combined corporate tax rate higher than top ranked Japan.
Thirty-two U.S. states have a combined corporate tax rate higher than third ranked Germany.
Forty-Six U.S. states have a combined corporate tax rate higher than fourth ranked Canada.
fifty U.S. states have a combined corporate tax rate higher than fifth-ranked France. Higher taxes are obviously not the answer.
They will only propel jobs and wealth away of America. It does not matter if our taxes were quadrupled; there is not enough money in America to bring redemption to the multitude of social problems inflicting our world.
The solution is an expanding tax base.
If you had to put your finger on the best way to expand America’s tax base, it would start with reversing our trade deficit. Our trade deficit is once again tracking to exceed $800 billion.
It is widely believed that market barriers, manipulations and distortions cost the United States $500 billion annually. I personally believe it is much more.
The corporate taxes paid on these lost sales assuming a 12% pre-tax income and a 40% federal and state combined tax rate would be $24 billion per year.
That’s just the beginning. Some $500 billion in manufacturing would employ roughly 3,500,000 Americans making on average $30,000 per annum or $100 billion in salaries. If we assume a 35% federal and local personal income tax rate this would generate $35 billion per annum in taxes. Also think of the millions of our citizens that would have healthcare coverage.
In addition there would be roughly $350 billion in material purchases and other operating expenditures from American vendors that pay corporate taxes and employ millions more paying personal income taxes.
All of this can be invested in our failing schools, crumbling infrastructure and renewable energy.
We would finally be able to do something about poverty alleviation instead of feebly railing against its immorality.
So why can’t we reap the dividends of this influx of taxes for the U.S.’ The answer is that many American companies are overtaxed, forcing them to put perceived profits ahead of what is best for America by sending jobs overseas.
Enormous profits are being made by foreign manufactures off the U.S. economy as a result of skewed and unjust trade relations that openly discriminate against American companies and workers. These foreign corporations and their employees pay taxes to their home governments providing the vital resources needed to develop their countries.
Meanwhile, American companies employing overseas workers are paying taxes to foreign governments, many of whom are despotic and openly Anti-American. We are aiding and
abetting a despicable crime against every American worker and tax payer.
If we are to restore confidence in the U.S. financial structure, it shouldn’t rely on having U.S. taxpayers bail out failed lending institutions. It must start with Congress removing the chains and shackles that bound America’s entrepreneurs by demanding comprehensive trade agreements with all our trading partners and especially China, Japan, India and Brazil.
By allowing American companies to fairly compete, we can expand our tax base by putting more American workers to work ‘ tax-paying workers. Let our exporters generate profits overseas, but with American labor so that the tax base stays here, along with the jobs.
We have come a long way from the Wild West, but todays stick ’em up politicians are not keeping the peace because they are shooting at the wrong targets.