US Coporate Taxes

This blog is taken, in part, from WSJ letters to the Editor, specifically from a Frederick C. Van Bennekom and Colin S. Jackson.

At issue in recent Presidential debate is the discussion of taxes, and more specifically, taxes incentivized companies to move off-shore. This was President Obama’s statement, to which Mitt Romney replied, “Mr. President, I have been in business for over 25 years, and I don’t even know what you are talking about”. While I tend to believe Mr. Romney, I still wanted to research it.

Here’s what I have come up with.

There are three things in play when one looks at the corporate tax policies:

1. the taxing of overseas profits earned by US firms
2. the deferral of that tax
3. the overall corporate tax rate.

First of all, the US is the only major country that taxes overseas profits, effectively creating an un-level playing field for US-based companies.

The deferral discourages US-based companies from investing in America (because if they bring the money back (repatriate) into the US, they pay taxes on it AND a penalty), which in turn encourages them to invest it elsewhere.   The folly of this is seen when a company is repatriating profits from a country with a lower tax rate than ours.  If it was your company located in Ireland, would you bring the profits back to the US to face the 35% corporate tax rate PLUS the 22% penalty repatriation penalty, or would you invest your profits in the local facility and face just a tax rate of 22.5%?  Think of the hiring you could do there, the equipment, the automation, the advancement of your processes! So you effectively BUILD your business there, to take advantage of where your money can be best put to work.

Had the President’s Bowles-Simpson commission’s recommendations to move to a territorial tax system been followed, this would hav eliminated this issue, leveling the playing field.

However, at the same time, the US also has the highest corporate tax rate of any major nation. This tax is levied on profits earned in the US by foreign firms, effectively discouraging these foreign firms from outsourcing to America.

It is offered that high corporate tax rates are the “currency of politicians”, as they use these rates to create loopholes for their favored groups.  This corrupts at all levels, and undermines everything we are working for.

In 1994, there were 10 OECD (Organization for Economic Cooperation and Development countries with higher corporate tax rates than the US.  In 2012, there are none.

Bottom line, without serious corporate tax reform, the US losing out on investments, revenues, and jobs.


Mainstream media, Class warfare distraction….

Mainstream media is threatening our country’s future | Fox News.

Will write more about this when I have time.  Just capturing the thought right now.  But do keep in mind this is a speech, so the written word is clumsy.  Be gentle, go for the intent as spoken, not as written. 😉

I do believe we have a problem where  “journalists” let their opinions cloud their judgement, and they spiral out of control from reporting unbiased news to reporting biased news.  And I am not talking about the TV/Radio talk hosts, (who do this too but not under the guise of journalism). I am talking about newspapers and TV news programming.

Top Obama contributor blasts the class warfare rhetoric

I firmly believe the class warfare rhetoric is just a distraction.  I do believe the incumbent wants to distract the public from his poor performance by inflaming their emotions and creating an “us against them” atmosphere.  The problem is, the middle class slippage has been going on since the 70’s.  All kinds of people have been screaming about it – but just like the housing bubble – no on wants to listen until it is too late.  The problem we are in is not an us against them, but it is about a government (over the years, so both parties) that is run by politicians who garner power by brokering deals that are not in the public’s best interests.  Want proof?  Look at the pension plans for city employees.  It is unsustainable.  Even Willie Brown issued a recent mea culpa and again called for pension reform.  But it was politics, combined with cronyism, and the politicians gorging themselves on that feed that got us into this bloated mess.

It’s really all about the National Debt, and how we all cut back, and rebuild the American Dream.  There will be outliers on either end, and we can’t chase those losers, but we can unite and fight for our country.



Christie to NBC’s David Gregory: ‘I wish you guys were as tough on the president’ | The Daily Caller

Christie to NBC’s David Gregory: ‘I wish you guys were as tough on the president’ | The Daily Caller.

I continually am aghast that people seem to expect a plan, fully penciled out, from Romney.  That would be impossible, in my opinion, until after he is in office and can review the situation in full detail.

If anything, I expect a plan from the President; furthermore,  I would then expect Romney to differentiate himself from that plan by citing what he would do different.  But since Obama doesn’t offer up anything that is concrete, Romney can’t dispute it.  So it leaves Obama supporters asking Romney to do what their own President can’t or won’t do – give us a detailed plan.