"WE ARE THE 1%" reads the sign posted in the windows of the Chicago Board of Trade ... in response to Occupy Chicago, a ripple (one of hundreds of ripples across the country) emanating from Occupy Wall Street.Well, you didn't expect the fat cats to walk humbly among the people, did you?
Meanwhile, NC Senator Kay Hagan has signed on to legislation (with John McCain) to ... wait for it ... slash corporate taxes on giant multi-nationals. We join the Progressive Pulse in being flummoxed. Baffled. Bewildered. Confounded. Discombobulated.
Really, Senator?
5 comments:
Confused and bewildered, JW? Let's see if I can help.
Currently $1.4T of that giant pile of cash American firms are sitting on is stored abroad--the bill lets them repatriate the money for a temporarily lower tax rate IF they hire new employees. Sound familiar? It should, because it resembles Obama's plan to give tax breaks to firms for hiring people.
But I can see your point. Leaving that money in UBS Zurich does SO much to help the "other 99%," right? (Actually, most of them use the cash to invest in factories abroad--just what American workers need, huh?)
Let's see what else the bill does...ah, penalize companies' tax situation if they eliminate jobs. Wow. Surely only the Koch Brothers could have come up with such a radically evil idea.
But I can understand if you feel companies should be free to fire whoever they want, whenever they want. I'm sure Art Pope agrees with you.
Mind you, one could argue that doing this as a tax holiday will be counter-productive and unlikely to produce the sort of repatriation and investment we would see if the tax rate was permanently raised to something like Sweden's.
Oh, wait. Did I say raise it to Sweden's level? I meant LOWER it. That's right--Sweden's median rate is 33% less than in the US.
http://www.nber.org/papers/w16839.pdf
http://www.cbo.gov/doc.cfm?index=6902
As long as we're making comparisons, let's see what the rates are for Japan, where the government is quite open about how it works for the benefit of large corporations? Hmm...it's the only OECD country with HIGHER top tax rates. Weird, huh?
So, when people ask whether you stand with progressive Sweden or right-wing Japan Inc., just say "Yea Toyota!"
Clearer now, JW?
Pedant--it all hinges not on the rates but the actual amount Corporations pay after all loopholes, exemptions, special write offs, depreciation deals, and other such gimmicks are invoked--many admittedly legal under our Swiss (ahem) cheese of a tax code but a shameful distortion of the actual tax rates.
Last time this tax holiday was tried under Bush it resulted in massive stock buybacks by the Corps, huge bonuses for execs, and more capital for the already-rich to speculate with in the derivatives markets. Create American jobs? lol (Bloomberg News had a good story on this the other day.) I say, why don't middle-class Americans just all collectively withhold our tax payments, like the Corporations do, and then when the government really needs our money demand a tax holiday before we pay what we owe--but only after they give us reduced rate?
Corporations are people, the SCOTUS says--so let's make them all pay at personal income tax rates.
And, JW, I don't guess we are going to see our freshwoman Senator joining the Occupy Wall Street demonstrations any time soon, huh.
Why not lower the corporate rate but tax the dickens out of exorbitant personal income? That would encourage corporations to re-invest profits in jobs and research rather than pay out massive bonuses, salaries, and golden parachutes.
Why is it that some of you think you can actually tax a corporation? All you can do is to use corporations as collection agencies for the taxes you want to impose on the people that use their products.
If you want to tax coca cola an amount equal to $!.00 for every coke sold, do you honestly think the price of coke will remain the same?
Taxes can have the effect of reducing the sales of that corporation as their prices are raised above what the market is willing to pay....or above what foreign competitors are charging.
You tax a corporation enough on whatever they earn and pretty soon they figure out that they can relocate outside of the US and not have to pay US corporate income taxes on the products that they don't ship into this country. How does that help American jobs?
You legislate, litigate and aggravate a company until you drive them offshore and then you want to blame the "evil corporations" for moving.
The way to tax the rich is to make stockholders and executives pay at full income tax rates on all dividends, stock splits, bonuses, capital gains (whether short or long-term) interest income, etc., and to charge a transaction fee (need not be very high) on all stock sales/purchases. Taxing corporations in and of itself is of course not the point, the point is to make them pay their fair share for all the institutions that support them: schools, roads, airports, the Pentagon, and all that stuff. I believe it was Louis XIV's finance minister, Colbert, who once said that whole art of taxation was to get the goose to give up the maximum number of feathers with the minimum amount of hissing. Problem today is, the geese run Washington....
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