Here are a few problems that America has to conquer in the near future:
1. The unending deficits that cause our huge national debt.
2. The lack of decent jobs for many people in this country, especially those without college educations.
3. The crumbling infrastructure that causes problems every day.
4. The rising dependence of many people on the federal government for subsistence.
5. The overstretched military that may no longer be able to meet all the missions set for it.
6. The slow growth of the economy.
So what do all these problems have in common? The answer may surprise you. They can all be solved almost entirely by revising the American business tax system. We need to go from the world's highest tax rate and a structure that discourages investment and economic growth to one that attracts new business to the USA and promotes economic growth and investment.
Right now, no country has a higher business tax rate than the USA. Even worse, the USA makes companies pay taxes on activities outside the country if the profits from those activities are returned to the USA. We also have rules that make investments in the USA more expensive than identical investments elsewhere. It's not surprising that as a result of these facts, companies place their activities elsewhere. Why build a factory in Ohio when the identical factory in Ireland, built for exactly the same price, will leave the owner with substantially higher profits? No rational person or business would choose the USA over Ireland in that example.
Now imagine that the US tax rate were cut from 35% to 20%. Imagine further that the tax on bringing earnings back to the USA is either abolished or cut to less than 10%. Imagine also that rules on expensing of investments are loosened so as to provide incentives for new investment in America. What would that do? The likely result of those changes would be to cause a tidal wave of new investment in the USA. American companies would change their plans so that expansion would take place here. Foreign companies would rush to locate their activities here to take advantage of our lower tax rates. Most of the more than two trillion dollars that US companies now hold overseas would be brought home. In short, we would see an economic boom.
All the resulting economic growth would generate more, not less tax revenues despite the cut in the rate. Millions of jobs would be created. The federal government would have more income, but it would also have less expenditures. Many people getting government assistance would no longer need help as new, better paying jobs were created. The cascade of cash to the federal government would provide funds to rebuild the military. America would be greatly strengthened.
The strange thing about all this is that in this election year, the Democrats want to raise taxes and put more obstructions in the way of economic growth. Their solution to business moving overseas is to penalize those who make the move rather than providing incentives to bring back those who have left. That will slow growth even more than now. Ultimately, companies that find it more profitable to do business elsewhere will find a way to leave. They will take their jobs and their assets with them. The companies left here will find it harder and harder to compete with companies in other countries. Eventually, the US companies will lose the battle and either downsize or shut altogether. The Democrat plan would just lead to a slow strangulation of our economy. Why would anyone support that? No one should.
1. The unending deficits that cause our huge national debt.
2. The lack of decent jobs for many people in this country, especially those without college educations.
3. The crumbling infrastructure that causes problems every day.
4. The rising dependence of many people on the federal government for subsistence.
5. The overstretched military that may no longer be able to meet all the missions set for it.
6. The slow growth of the economy.
So what do all these problems have in common? The answer may surprise you. They can all be solved almost entirely by revising the American business tax system. We need to go from the world's highest tax rate and a structure that discourages investment and economic growth to one that attracts new business to the USA and promotes economic growth and investment.
Right now, no country has a higher business tax rate than the USA. Even worse, the USA makes companies pay taxes on activities outside the country if the profits from those activities are returned to the USA. We also have rules that make investments in the USA more expensive than identical investments elsewhere. It's not surprising that as a result of these facts, companies place their activities elsewhere. Why build a factory in Ohio when the identical factory in Ireland, built for exactly the same price, will leave the owner with substantially higher profits? No rational person or business would choose the USA over Ireland in that example.
Now imagine that the US tax rate were cut from 35% to 20%. Imagine further that the tax on bringing earnings back to the USA is either abolished or cut to less than 10%. Imagine also that rules on expensing of investments are loosened so as to provide incentives for new investment in America. What would that do? The likely result of those changes would be to cause a tidal wave of new investment in the USA. American companies would change their plans so that expansion would take place here. Foreign companies would rush to locate their activities here to take advantage of our lower tax rates. Most of the more than two trillion dollars that US companies now hold overseas would be brought home. In short, we would see an economic boom.
All the resulting economic growth would generate more, not less tax revenues despite the cut in the rate. Millions of jobs would be created. The federal government would have more income, but it would also have less expenditures. Many people getting government assistance would no longer need help as new, better paying jobs were created. The cascade of cash to the federal government would provide funds to rebuild the military. America would be greatly strengthened.
The strange thing about all this is that in this election year, the Democrats want to raise taxes and put more obstructions in the way of economic growth. Their solution to business moving overseas is to penalize those who make the move rather than providing incentives to bring back those who have left. That will slow growth even more than now. Ultimately, companies that find it more profitable to do business elsewhere will find a way to leave. They will take their jobs and their assets with them. The companies left here will find it harder and harder to compete with companies in other countries. Eventually, the US companies will lose the battle and either downsize or shut altogether. The Democrat plan would just lead to a slow strangulation of our economy. Why would anyone support that? No one should.
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