Forum Post: The Middle Way, How to fix the economy in 1 year
Posted 12 years ago on Nov. 3, 2011, 4:07 p.m. EST by youngandoutraged
(123)
from Iowa City, IA
This content is user submitted and not an official statement
Step 1: Pass a law raising corporate tax rates 1 year from now. Step 2: Tell companies that they can keep their current tax rates, or even have a (slightly) lower one, if they can show they are working toward job creation in the next year. Step 3: End offshore tax privileges immediately, and make the IRS enforce fines on those companies who do not comply
Our economy will turn itself around, because business leads the way, as it should. Tax cuts for job creators has not created more jobs, so we need to attack the problem from the other direction
Please tell me what you think, and I'd love some economists' perspectives.
Updated
There are no offshore tax priviledges, only countries that have lower corporate taxes than the USA. Companies move operations to low tax jurisdictions. If you raise corporate taxes in the USA then companies move more operations overseas.
But the IRS allows companies to keep 'headquarters' in PO boxes and does nothing to enforce taxes on companies, while every year they bust tens of thousands of individual citizens. Wouldn't the additional tax revenue from restricting those types of havens be favorable?
Not true, the IRS has been relentless on any transactions or permanent establishment positions to ensure substance. Thos has been truenfrom Bush to O'Bama
Here's a thought for you youngandoutraged;
Do corporations ever pay any taxes?
Answer: No. They merely pass those costs onto to their customers in the form of higher prices for their products.
I understand that cost externalization is the norm, so you're saying we need to change the way externalization is dealt with, a new business paradigm. What we have now is not working
I'm saying nothing of the sort. What I am saying is that you should base your ideas in reality. As it stands, while well intentioned, you suggestions would only serve to make the economy worse.
So you are in favor of shipping jobs to China and India faster?
You're foolish tax & punish scheme would destroy jobs. Whether you want to acknowledge that reality, does nothing to change it.
Even if we gave a tax break to any company that could show it was creating US jobs? I think that the US being the worlds largest marketplace is overlooked, and globalization is already sucking American jobs, this would provide at least some incentive for them to stay
The problem with your tax break concept is the cost of those workers here in the U.S. versus what they cost in other countries (China, India, Mexico, Singapore, etc...).
Without addressing the "free trade agreement" problem (and China's currency manipulation), any tax breaks or conversely tax punishments, would be nominal in comparison the cost of each new American employee.
Like it or not, but those jobs are NOT coming back. It is best to deal in reality and avoid the temptations of "what if" scenarios about "bringing those jobs back".
What about closing offshore tax privileges? Can we at least agree that if you want to play in the largest economy you have to play fair?
As Fedup10 said:
There are no offshore tax priviledges, only countries that have lower corporate taxes than the USA. Companies move operations to low tax jurisdictions. If you raise corporate taxes in the USA then companies move more operations overseas.