Saturday, March 31, 2012

The United States Is Now Number One

Since Japan has lowered its corporate income tax rate, consistent with what is happening around the world, the US now has the highest corporate income tax rate in the world.   We are now Number One, which is a very bad distinction.  Socialist President Obama wants to lower our corporate income tax rate from 35% to 28%; but along with it, Obama wants to tax overseas profits that remain overseas and are already taxed in those countries.  If this were to happen, it would cause a trade war of sorts as other countries respond in ways that mitigate the effect of this crazy idea.  The impact of Obama's Socialist Scheme would be to actually raise corporate income taxes for major global companies so it would be very counterproductive.   Beware of any Socialist talking about tax cuts because they are rarely real cuts.

Here are the facts.  Several hundred thousand American companies that do not have overseas operations and that do not benefit from various loopholes and gimmicks in the tax code, which typically benefit very large companies, pay a federal corporate income tax rate of 35% along with average state income taxes of 5%.   So many American companies are paying about 40% of their profits to federal and state government.  This does not include payroll taxes, which amount to 7.65% of payroll to fund Social Security and Medicare, local property taxes, one way or another and various business taxes and other fees required to do business.  This gets these companies up to around 50% real quick.   So how is this different from Communism, where all the means of production were owned and controlled by the state? 

In addition, companies that provide their employees health insurance are getting killed as premiums continue to go up despite ObamaCare.  Finally, all companies in the United States must spend a considerable amount of money in legal and accounting fees to comply with all sorts of regulations and frivolous lawsuits.  Obama, in fact, has added 11,000 regulations since his election that are all job killers.  This is in addition to thousands of other state and federal regulations already on the books. 

Socialist President Obama, as part of his Class Warfare argument to get his PEEP's to the polls, has also singled out oil and coal companies and banks as enemies of the people calling for higher taxes and more regulations on these industries.  Of course, if these things were allowed to happen, we would just see higher costs passed on to consumers; i.e. higher gas and energy costs and bank fees.  It is already happening.  

The reality is that all subsidies, loop holes and gimmicks in the tax code that benefits any company, or industry should be eliminated.  That would include agricultural subsidies, ethanol subsidies, subsidies for green technology and oil companies and any other industry that benefits from crony capitalism.   We should just allow the free market to work based on supply and demand and nothing more.  The corporate income tax rate should be brought down to the average of the top ten industrial countries in the world to make the US competitive.  This is just common sense, something often lacking in Washington DC. 

I suspect that would give us a federal corporate income tax rate of about 22%.   From there, taxes should be computed by simply taking revenues, generated in the US and subtracting expenses and depreciation to determine pre-tax profit.  Federal corporate income tax would then be determined by simply multiplying pre-tax profit by 22%.   Just think, a simplified tax code might mean we won't even need accountants just to figure out what we owe.    

Of course, none of this will happen as long as Obama and his Socialist pals in Congress control any branch of government, which is another reason we must sweep them all out of office in 2012 and 2014.  The current corporate tax code gives US companies an incentive to move jobs and revenues overseas.   Companies, like people, vote with their feet when taxes are too high.   We are competing with countries like Germany, Canada, Ireland, China and many others that have corporate tax rates of 20% or below.   As long as this continues, the US is not competitive and we will continue to see many companies move operations overseas.  It is time for Congress and the President to fix this problem; however, it will not happen until we have a Republican President and Congress. 

The elections of 2012 and 2014 are perhaps the most important in 70 years.  There is no doubt that we have to take back our country to prevent the bankruptcy of the United States and that means defeating both Socialists and RINO's.  To do so, we must sweep Socialists, at all levels of government, including President Obama, out of office.   We can do it.  We must do it to preserve our freedom, our nation and way of life for the sake of our children and grandchildren. 

We have to reform our tax code, including lowering both personal and corporate income tax rates by getting rid of all the loop holes, deductions and crazy gimmicks in the tax code that distort the economy.  Only when we make this happen will we see economic growth and job creation again in our country.  To get there, we must make Obama a one term President.  So put on your hip boots because we have to drain the swamp in Washington DC.  It is dirty, stinky work; but we have to do it to take back our country.   

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