That's what liberal economists teach, their lemmings expound in the mainstream media, and legislators actually do by rasing the federal corporate income tax.
Let's peel away the hyperbole and look at three facts, courtesy of the National Center for Policy Analysis:
- Relatively little revenue is generated by the corporate income tax. In 2013, it took in $288B (just 1.8% of the nation's GDP). If the tax was sunsetted, it wouldn't be hard to find waste in Medicare/Medicaid fraud or the bloated Pentagon budget to cover the loss.
- The tax is onerous, one that encourages corporations to relocate and operate overseas, keeping their profits abroad rather than reinvesting them back into the United States. All of this due to a confiscatory corporate tax rate (ahem, the highest in the developed world). Why give those foreign nations the jobs and tax benefits that belong at home?
- Most Americans view the corporate income tax as affecting only corporations. Ultimately, however, American workers and consumers are the ones paying the tax.The former bear their burden as jobs are shipped across seas. The latter bear their burden when they pay higher prices for goods and services.
Using a dynamic economic model for analysis, eliminating the corporate income tax would produce three important benefits:
- Capital stock would increase 23%-37%.
- Real wages would increase 12%-13%.
- The United States' GDP would increase 8%-10%.
Using the same model, reducing the corporate income tax from its current rate of 35% to 9% while eliminating loopholes and imposing a wage tax would also produce a number of benefits:
- Low- and high- skilled workers' wages would increase 6% in the short term and 9% over the long term.
- GDP would increase by 6% immediately and permanently.
- Capital stock would increase 17% in the short term reaching 30% by 2040.
This sensible reform of the U.S. tax code--eliminating the federal corporate income tax--would provide a boon to the nation's economy as well as to taxpayers who bear the brunt of current confiscatory rate of 35%.
The bottom line is that liberals are responsible for driving tax-paying corporations abroad to lower their expenses. If they could, liberals would keep increasing the federal corporate income tax rate, crying "foul" even louder when it is they who are responsible for driving more American corporations overseas, creating the loss of jobs at home, and indirectly taxing Americans when they make purchases. All the while, those same liberal legislators say they haven't voted to raise taxes on the most vulnerable lower- and middle- income Americans.
They know better. It's really too bad those lower- and middle- income Americans don't. If they did, they'd "throw the bums outta office."
Let the discussion begin...
To read the National Center for Policy Analysis study, click on the following link:
"Abolishing the Corporate Income Tax Could Be Good for Everyone."