The ideal tax rate for individuals and for corporations has been hotly debated with the left favoring numbers in the 70-100% range and the right generally favoring numbers around 10-20%. My own position on corp[orate taxes is that they should be near zero, which is what they pay right now.
When a corporation makes a widgett, it sells it to somebody for say $10. Doing this, it makes a profit over the cost of manufacturing which goes toward bigger factories, R&D for new widgetts, and yes, pay raises all around. If the government demands 38%, as it currently does here, the price to the consumer is simply raised to cover the tax. Thus the corporation pays no tax, it simply passes it on to the consumer, who is now less able to afford the product.
Even this has its limits as this chart suggests:
When the Irish "harmonized" their tax rates at 12%, corporate and individual, every European in Europe began moving his now portable Euros to Ireland to start a business. This gave Ireland double digit economic growth for years. Unfortunately they elected a government capable of spending it faster than it came in, so the country, if not the underlying economy, now borders on bankruptcy.
France just elected its own version of Obama who will shortly either sell out his socialist principles to avoid national default, or will cheerfully lead France over a cliff. We'll see.
3 comments:
Did you see that a billionaire Facebook founding investor, Severin, just renounced his US citizenship in advance of the Facebook IPO?
What a greedy bastard. Makes a ton of money and has the effrontery to try to keep some of it.
Eduardo Saverin was born in Brazil and has been a resident of Singapore for some time.
It is obvious that he received no benefit from being a U.S. citizen.
ie, Facebook does not use the internet created by the U.S. government, nor does it use a network that runs across public property or has easement rights across the property of others'. The internet he used to make his billions was entirely created by private corporations, and runs only across privately-owned land.
Nor did the government safeguard his property or provide any other services to him. The Facebook corporation is a "person", not an artificial entity granted a charter by the government.
Saverin's wealth was entirely self-created; he and his success owe nothing to the United States.
I just wonder why such a paragon of virtue and morality didn't renounce his U.S. citizenship sooner -- or even bothered to become a U.S. citizen at all. After all, someone has smart as he is -- and his wealth is proof that he is smart -- must have known that the United Stated is a socialist gulag dedicated to oppressing billionaires with its 15% tax rate on long term capital gains. The horror, the horror.
Given the state of the union, I wonder why any Tea Partier chooses to stay in the United States, rather than going to a bastion of liberty like Singapore or China to make his fortune. You and your kind owe it to yourselves to do so
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