July 16, 2014
WE ARE ALL NEOCONOMISTS NOW:
Tax Reform To End Inversions And Grow Economy/Jobs (Steve Abramson, 7/16/14, Forbes)
Corporations should be focused on increasing earnings on behalf of shareholders. To maximize shareholder value multi-national companies have already outsourced labor to lower-wage countries and shifted profits to subsidiaries in lower-taxed countries. In addition, for decades corporations have profitably lobbied Congress for endless allowable deductions and loopholes. From 2009 to 2011, the 280 most profitable companies paid just 18.5% in Corporate Taxes, about half the 35% statutory tax rate. 78 of these companies paid zero federal income tax in one or more of these three years. In 1952, corporate taxes accounted for fully one-third of federal revenues, but in 2013 amounted to just under ten percent. Tax avoidance has been very successful and inversion mergers if they take hold will make matters worse.There is a bold but promising solution to end corporate tax avoidance schemes: sweeping tax reform, replacing the CIT by a clean consumption tax with zero exceptions. For reasons that follow, economic growth would be expected, including increased employment, which would work towards leveling income inequality.
Posted by Orrin Judd at July 16, 2014 3:44 PM