January 3, 2009

BEING IRISH ISN'T JUST FOR ST. PATRICK'S DAY ANYMORE:

Ireland Gets It (Steve Forbes, 12.18.08, Forbes Magazine)

If the incoming Obama Administration is serious about squeezing more money from businesses, it should follow the example of Ireland and slash corporate tax rates. The U.S. has one of the highest profits levies in the developed world: 35% at the federal level, with another average of 5% from state and local taxes. Only Japan has worse. In contrast, Ireland's rate is a mere 12.5%. Imagine the howls from congressional Democrats if Barack Obama were to suggest enacting such a low corporate tax rate in the U.S.

But the accompanying table tells an eye-opening tale: Ireland's corporate tax take as a portion of its economy is higher than that of the U.S. High rates breed pressure for ever more complicated exemptions and ever more ingenious ways to avoid Uncle Sam's tax bite. But an Irish-like rate leaves companies to focus brainpower on growing their businesses instead of on jousting with tax collectors. A general flat tax, such as Yours Truly has been advocating for decades, would give just such a benefit to both individuals and businesses. Alas, misbegotten populist ideology still trumps fairness and common sense.


Posted by Orrin Judd at January 3, 2009 8:25 AM
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