Tax the hell out of them? Be careful of what you ask for!
By Jack E. Lohman
Indeed corporations are favored more than they should be, but that’s because our esteemed politicians get a piece of the profits before they are offshored. Yea, through overly-compensated CEOs and executives, but that’s the way today’s game is played. (Union members get theirs too, through a different money flow. Both games must be stopped.)
We tax corporations because it appeases the voters, but we all pay these costs when we buy product at the cash register. Added to the cost is an unnecessary expense to offset the costs for CPAs and attorneys for legal tax avoidance.
Having spent 25 years as a business owner — before I got old and retired — let me assure you that 100% of the taxes I paid were passed on to the consumer. I had to, or I would have gone belly up and my employees would have been out of work.
Thus corporate taxes should be ZERO!
Because too, they encourage companies (along with high labor costs) to take their jobs offshore, and even incorporate in other countries. As I said last week, “We have given them a choice: either bring your profits home so they can be taxed, or invest them overseas where they are not taxed.”
We know the decision they made. That makes zero sense, and we can do better.
No, corporations should not get a free ride. Those who stay in the US and employ US workers should have a competitive advantage on state and federal government bids. If there are three or more US corporations qualified to bid, no foreign corporations are allowed to bid unless they are at least 30% less costly than the lowest of domestic bids. (This of course needs fine-tuning by Elizabeth Warren to block the funny games CEOs play.)
And NO company should receive a tax break or subsidy if they are not incorporated in the US, pay taxes in the US, or otherwise outsource their jobs. Outsourcing is currently subsidized by our nice politicians, and India loves them for that, and so do the politicians that are on the take.
So how do we make it up?
With a more progressive personal tax that includes a 50% tax on all income (wages and benefits and bonuses) over $5 million per year. And if a corporation chooses to compensate its executives through funny games on the outside, such compensation is still taxed.
Will the Fat Cats then leave the state? Not if the corporations are penalized by the amount their top 5 employees would otherwise have had to pay. We CAN find a way to prevent loopholes, and we must. But we need honest politicians to do so..
It indeed irks me to see GE pay zero taxes while at the same time paying their CEO Jeffrey Immelt $15 million per year, and worse, President Obama hiring him as his expert on corporations. I’d rather have Qaddafi, but he makes no campaign contributions.
How about the VAT or sales taxes?
Well, they are all “regressive,” meaning that they affect lower-wage people more than the wealthy. So are tariffs.
But tariffs scheduled for, say, 2013, will encourage and give corporations time to bring their jobs back to the US. And if they don’t they’ll have higher priced products and the tariffs will help offset our costs for the unemployment they helped cause. And above all, if another country has 20% tariffs on imports from the US, then the US must apply a 20% tariff to their products. NOW!
Unfortunately, all of this highlights the main problem: our corrupt political system. Politicians are PAID to spend money and reduce taxes for businesses and the wealthy, and THAT is what we must fix. We need public funding of campaigns, and then the politicians will make good economic decisions that benefit the taxpayers and not their pocketbooks. And if we don’t get that this year, we must throw them all out in 2012.