Flat tax or no Corp tax bring in more jobs?

I often find myself amazed at the brainpower and experience of those who offer their thoughts on this forum. I would welcome some comments on a few questions that never really seem to asked when I'm listening to the folks on the radio about how their tax reform ideas are the only way we are going to make it in the next decade.

I have heard many people suggest that if we remove the corp. tax from companies that we would see major company's coming back to the shores of the USA. I often wonder if such a move would really increase our ability to compete against the world market or rather just become a tax hideout for the megacompanies?

The same folks have also indicated they felt the workforce in America would also increase, I'm not so sure of this. I wonder if such a move in tax reform would only benefit the stockholders or would it actually increase jobs for the average American? Would we see a return in manufacturing jobs since no corporation taxes per say would be paid and the now freed funds being used to maintain employees and manufacturing in this country?

Would we perhaps just see a shift of taxes onto the shoulders of the American public?

I have heard many people suggest that if we remove the corp. tax from companies that we would see major company's coming back to the shores of the USA.

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When you have to deal with the EPA, OSHA, as well as a host of other government agency BS, why would you come back to the USA? when you have NONE of that to deal with offshore.

I often wonder if such a move would really increase our ability to compete against the world market or rather just become a tax hideout for the megacompanies?

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Could you compete by paying US wages with a offshore company that has wage cost's 1/4 to 1/10 of your's?

The same folks have also indicated they felt the workforce in America would also increase, I'm not so sure of this.

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I think you are right, unless the US workforce is willing to work for cheap. Example would be the wetbacks work for cheap, will you do that job for the pay they accept?

I wonder if such a move in tax reform would only benefit the stockholders or would it actually increase jobs for the average American? Would we see a return in manufacturing jobs since no corporation taxes per say would be paid and the now freed funds being used to maintain employees and manufacturing in this country?

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I dont see a way. Here is an example. My TV is a little flakey, does not matter what is wrong just that it needs something. So I am thinking, wonder if there's a tv repair guy in the phone book. Before I look I go to Walmart for another item and while I am there I check on the price of TV's. Now this set cost me maybe $175 a few yrs ago and I see a like size set at Walmart for $99.00. Who is gona even look at my set when a new one is that cheap?

Will any of the many TV manufactures even think of making a set here in the USA? I dont see how, even if the get the materials for free you can not assemble it, distribute it and sell it at walmart for 99buks.

Change the word TV to anything you want, shoes, shirts, cameras, shotgun, caster, computer, this pc's keyboard was bought for $10.00 because I spilled ice tea all over the old one... you want to make one for that?

Ohh and one more thing... learn how the US government HELP's send our jobs offshore here.
http://www.opic.gov/

One last little tidbit of information...
If a US company invests in offshore facilities and those facilities are taken away from them, OPIC will reimburse the costs, and you and I and all the other taxpayers in the US pay for OPIC.

You still want to open a manufacturing plant here?

Rusty,

I think the biggest problem is that our Government no longers strictly obeys the Rule of Law. It's more the rule of demogoguery.

Case in point was the Tobacco Lawsuits, where the maker of a legal product was sued in Court for making "Defective" merchandise FORTY YEARS AFTER they were forced to put "If you use this product you will die". The Settlement amounts were in no way commiserate with the actual damages. What legal basis existed for suing someone for making a legal product? For hundreds of billions of dollars?

Oh yeah, the Courts and Politicians could get away with it....

Then State Attornies General got into the act, and sued the tobacco companies for still more money. To help pay for Medicaid payouts. Yeah, right, and when does "Fast Food" and other "social sins" get their turn in the legal barrel?

We have all sorts of neat laws which make it hard to start a business, run a business and be flexible in a competive global marketplace.

Taxes are the tip of the iceberg. I think the real problem is that our Government has quit trying to play fair. They're acting more and more like a dicatorship.

I'm waiting right now for the Congress to outlaw "Speculation". They're already working on "gouging at the pumps". Next thing they'll have a legal limit on profits. When they reach that point maybe they ought to knock off the pretenses and start calling each other "Comrade".

The part which is hysterical is that the very same people who push these laws say that they're here to "help the working person".

No, thank you.


To answer your question - I like a flat income tax. I expect Americans to pay a little morel and to earn a little more. People might even work harder if they could expect to keep more of what they earn.

Funny thing - when people work harder and smarter we all benefit. We get more for our money. The converse is why "socialist" countries are so poor. Why knock yourself out when your extra effort is stolen from you?

Gene

The US did not have an income tax untill 1913
and the US was not a debtor nation.

Look at this...

U.S. NATIONAL DEBT CLOCK
The Outstanding Public Debt as of 10 May 2006 at 01:12:25 AM GMT is:

over 8,300,000,000,000



The estimated population of the United States is 298,678,408
so each citizen's share of this debt is $28,003.42.

The National Debt has continued to increase an average of
$1.95 billion per day since September 30, 2005!
Concerned? Then tell Congress and the White House!

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more here...
http://www.brillig.com/debt_clock/

The more I see and hear about illegals and drug runners, the better I like sales taxes. They may not bother to pay income tax, FICA, etc. but they cannot totally escape the sales tax.

For the honest people also, the sales tax has merit. You are not taxed on what you save or invest in the stock market -- only on what you consume.

Arguably the most hated tax is the personal property tax on ones vehicles.

Charles

I was handed a copy of a Flat Tax book this weekend and had some discussions on it with friends..... it seems as if movement is starting... ... it sounds interesting but I need to read this and see how the details work...... you know, that devil in the details thing. I'll report back later...

R608, give it a darn good read, especially the
part where they explain how they're going to
keep all the special interests from getting
their pet exemptions rammed through the new
tax plan.

And don't take "well, we just won't!" for an
answer.

BTW, corporations don't really pay taxes in the
US right now. Aside from simply *giving* them
more of our tax dollars as subsidies, they
can't go lower than that.

If anyone really cares, I suggest we repeal the
law that lets corporations vote.

Jim

If anyone really cares, I suggest we repeal the
law that lets corporations vote.

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Which law is that?
I never saw a Corp walk into a voting place, did you?

Ohh...but your right they just buy the voters, you know who they are, YOUR CONGRESS CRITTERS.

In 2003 9.9% of all tax revenue at the federal level, were paid by corporations. 50.6% were paid by individuals, and 35.6% were from patroll deductions(soical security, medicaid etc.) The remaining 3.9% was from various sources,excise, import, etc.

Probably the worse offender is Time Warner, from 2001 to 2003 T/W posted in excess of 6 BILLION dollars in profits. Over the same period, T/W claimed tax refunds of 457 million dollars. An effective tax rate of MINUS 7.3%.

IBM made profits during the same period of 14 BILLION dollars, federal taxes paid were 260 MILLION, and effective tax rate of 1.3%.

And corporate tax loopholes are great, Prudential Financial made profits 2001 - 2003 of 2.2 BILLION, and received tax refunds totaling 1 BILLION, and effective tax rate of MINUS 46.2%.
They recieved significant tax breaks by converting from mutual owernship (policy holders) to public owership(investors).

Must be nice to be a multi-billion dollar corp. in America.

AL

If anyone really cares, I suggest we repeal the
law that lets corporations vote.

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How about a law that prevents CEO's and other officers from owning stock? Sure, it violates the very premise of being a CEO, but do you really believe that no insider trading is committed by people "in the know"? Does anyone believe that that level of knowledge isn't abused? Does anyone NOT believe that US corporations drive our foreign policy?

Let's outlaw lobbying, too. (for everyone - not just the fringe)

By the way - Jim is right, although technically not accurate. Corporations don't pay taxes - but it's only because they pass them on to the consumer. That's the first rule of business. (as I learned it)

6handicap;

With all due respect...
You, like so many others, are clueless.
Corporations do not pay taxes. Period. Oh, they are assessed taxes by the IRS.. but it is ALWAYS the corporations CUSTOMERS that are paying the tax! That's the way business works. 100% of a corporations money comes from it's customers, in the short term or the long.

Raise corporate taxes, and you raise the cost of whatever that company does for it's customers.. whether that's build airplanes or shovel cow poop.


Further;
Our congress has been bought and paid for by lobbiests... I think everyone pretty much recognises that.
How do you take the power AWAY from the lobbiests?
You can try all sorts of convoluted (and 100% ineffective) "campaign finance reforms", or you can take away what 90% of the lobbiests are lobbying FOR;
Tax breaks.

Under a Fair Tax (consumption tax), there ARE no breaks for ANYONE. You buy something, you pay tax on it. Period.
IF enacted the way the Fair Tax book lays it out (and that's an important IF!), most lobbiests have nothing to lobby for. Their special little loopholes evaporate. Their congress-critters can't promise them any more obfuscations of the Federal Income Tax code, because the entire tax code will be reduced to about two pages, double spaced.


Quite honestly, folks...
If you haven't read the Fair Tax book... even if you HATE the idea as you've heard it thus far, please go get or borrow a copy and read it.
I think you'll be quite suprised how simple and effective it can be.

Paul F.

How about a law that prevents CEO's and other officers from owning stock? Sure, it violates the very premise of being a CEO, but do you really believe that no insider trading is committed by people "in the know"? Does anyone believe that that level of knowledge isn't abused? Does anyone NOT believe that US corporations drive our foreign policy?

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I've been advocating this for ages.
If you have senior management owning large amounts of stock in the company, plus they are on short term contracts, then the focus of the managers will become driving up the stock price by whatever means they can.
MCI or Enron anyone?

The focus will be short term profits just to impress wall street and their "next 1/4 is long term planning for us and screw the company" view.

The other thing that should be made illegal is large scale bonus's unless available to ALL employees, no more 50% bonus for a CEO while cutting pay and conditions for everyone else.
If the company hits their profit target , then all the employees must get the same bonus no matter what grade they are.

Let's outlaw lobbying, too. (for everyone - not just the fringe)

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Yeah right, and how do we outlaw it?, by congress (or parliment in my case)passing a law cutting off their own funding...like that will ever happen.
But you've cut to the nub of the problem in our representative democracy, elected representatives not representing the people that voted for them (or not voted for them) but representing whichever company pays them the most money

We need another revolution I think and not just in the USA this time

Boris

We need another revolution I think and not just in the USA this time

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The last time this country had a revolution, only the freaks and perverts showed up.

If you can sock away 90 to 99% of your income, into Bonds or stocks, then you will be all for any type of "Consumption" or "Flat" tax.

As a corporate cheftain, at 10 million a year, spending, say, a million on the "necessities", you will pay what has been variously estimated to be anywhere from 18 to 32 % to be revenue neutral, ie, raise the same amount of tax money. So the Big Guy spends 1.32 million max, leaving 8.7 to bank.

He would have paid some 3 million pre consumption tax. Flat tax, if you go the lowball of 12 or 18 %, he pays 1.2 to 1.8 million, 8.2 to 8.8 to bank.

Stands to reason, does it not, that you and I will somehow be asked to make up the shortfall?

And, you know, this is just the initial plan, we won't know how much the shortfall will be till after it is in place for a year or 2. So, the rate is adjusted upwards. Whoops.

Sales, or consumption tax, has been estimated to be nearly that high, say 24 % added to everything you buy, not just the things that carry a sales tax now, which varies from state to state.

Any how, you make 50 thou, HAVE to spend 25 to 30 for everyday expenses. As is, you probably clear somewhere near 35 thou, 5 to 10 is "extra".

I know, EVERY proponent says their plan will give personal exemptions of 10, 20, 30 thou. I don't believe them.

Still, if you consider it fair or not, the man who makes grossly more money than the rest of the population should pay more, and at a higher rate than those living on a subsistance level.

I'm sure most of you are aware that the rich get more from the society we live in. When they pay less, and some now pay nothing or at most a pittance, they will still get preferential treatment from the same people and authorities they do now.

You will still be the working stiff you are now.

Cheers,

George

I don't see corp tax = more jobs. Internatrional corperations have a great ability to 'pump' money from one nation to another without having to give somebody a job.

You want more jobs, I suggest taxing imports so they bear an equal burned as US factorys do. Right now, I think an imported item is taxes at about 1/10 an American factory would be for making it. (Saw this in another thread here)

Don't get me wrong, reducing taxes will help the economy. In particular the double dipping on corperate earnings when they go to stock holders would make a big difference. I have always favored a national sales tax on new goods and services and not on income. I think a national sales tax would reduce disposable consumerism and focus people buying quality not just the cheapest.

Ted

How do corporations vote?

That's an easy question, with MONEY. There
was a supreme court decision that said that
a law preventing corporations from contributing
as much money as they wanted to, restricted
their free speech.

Bonus points for naming the case.

But wait!

Why does the first amendment apply to
corporations?? Double bonus points if you
can figure that one out.

Jim

Jim;

I don't know if you've noticed this... but PEOPLE work for corporations... and RUN corporations.
As long as PEOPLE are doing the talking, the first amendment covers them. And it SHOULD.

If we start making these "little distinctions" between who gets to speak and who doesn't, we've lost our 1st amendment just like we've lost our 2nd. (but that's for a WHOLE nother thread).


George;

You're really not getting the concept of percentages, are you?

The "rich" WILL be paying more.. they spend more. You can try to gloss over that fact all you want, but that's a fact.

And, by the way, all your arguments are covered in detail in the book.

Paul F.

It's a legitimate question though.

Should the US constitution's first amendment
rights to free speech apply to the concept
of an artificial person: the corporation?

Should corporations have the right to wield
practically limitless political power, by
contributing as much money to candidates as
they wish?

A show of hands, yes or no - if you please.

Jim

Again... A corporation is comprised of PEOPLE.
From the CEO to the lowliest employee sweeping the floors. They're PEOPLE.

We may not like WHAT they lobby for, but as citizens of the United States, they have the right to petition their representatives.

The road you suggest leads back to slavery under a monarch that "knows what's good for us".

Paul F.

So petition your freaking representatives by electing the PROPER people, starting from the bottom up!

Yes, that's right - I dare suggest that people get off of their asses, and vote in all the relevant elections. Your representation isn't some lobbyist, who is a legal briber. (briber?) It's your state and local officials, who are supposed to be your electoral representation.

Slavery? Nah. Only if someone else has the right to do it, and you don't.

The biggest problem with Americans is complacency. It's time to stop being the "Christmas and Easter crowd", and starting paying attention to important issues every day of the year. Of couse, I realize that I'm asking too much, but I can "Imagine", too, can't I?

Actually, now that I think about it, would it really be a good thing if everyone voted? I mean, if every person with the power to do so, actually voted, would America as we know it be better off, or worse? Is this one of those, "be careful what you wish for" scenarios? Something to think about...