Abolish the corporate income tax!

Pat Buchanan's picture

News that Pfizer, the world’s largest pharmaceutical company, plans to buy Britain’s AstraZeneca for $106 billion, renounce its U.S. citizenship, and declare itself a British company, has jolted Congress.

Pfizer is being denounced as disloyal to the land of its birth, and politicians are devising ways to stop Pfizer from departing.

Yet Pfizer is not alone. Hedge fund managers are urging giant corporations like Walgreens to go nation-shopping for new residences abroad to evade the 35 percent U.S. corporate income tax.

Britain’s corporate income tax is 20 percent, and Pfizer stands to save over $1 billion a year by moving there.

In what are called “inversions,” dozens of U.S. companies have bought up foreign rivals, and then moved abroad to countries with lower tax rates, cutting revenue to the U.S. Treasury.

But Pfizer is far and away the biggest.

The real question, however, is not why companies are fleeing the USA, but why our politicians continue to drive them out of the country.

Consider. Here in America we do not tax charities, churches or colleges. Yet these institutions produce a fraction of the jobs that businesses produce.

If, as a nation, we are committed to “creating jobs,” does it make sense to impose the highest corporate tax rate in the Western world on our biggest and best job creators?

Is this not economic masochism?

Many governors understand that if you want something in your state, you do not drive it out with high taxes. You strengthen the magnet of low taxes. Florida wants residents of other states to move there and retire there, so it has no income, estate or inheritance tax.

For years, Rep. Jack Kemp urged the creation of enterprise zones in poor communities like Benton Harbor, Michigan, and Harlan County, Kentucky. Businesses that relocated there would be exempt from corporate income taxes.

Why not make the United States the largest enterprise zone on earth — by abolishing the corporate income tax?

If the corporate income tax were repealed, no U.S. company would think of moving abroad, and every transnational company would think about moving to the USA.

What a message this repeal of the U.S. corporate income tax would send to corporate headquarters worldwide: Relocate your company or next factory to the USA, keep every dollar of profit you earn, and either reinvest it here or take it home. Your call.

How would America benefit?

Every U.S. company, liberated from its corporate tax burden, would see its profits soar and have more cash on hand for cutting prices, raising wages and salaries, and new investment and hires. And every company that relocated here would create new U.S. jobs.

This would be a stimulus package to end all stimulus packages.

Isn’t this what we all want? Or are we not willing to create jobs here if the means of doing so conflict with redistributionist ideology?

Consider the other benefits of abolishing the corporate tax.

Corporate lobbyists, who spend their days walking Capitol Hill corridors seeking tax breaks, and their evenings at fundraisers handing $1,000 checks to congressmen who can create tax loopholes — in a form of legalized corruption and glorified bribery, could be put out to pasture.

Armies of tax lawyers, accountants and IRS agents could be shifted to more productive work. Companies could focus full time on creating new wealth, not finding ways to keep what they have earned.

Many politicians seem to think the corporate tax punishes the rich and powerful and is an indispensable weapon in reducing inequality and redistributing wealth. This is neosocialist myth.

As Ronald Reagan used to say, corporations don’t pay taxes, people do.

The billions in corporate income taxes paid by Wal-Mart and McDonald’s come out of the dollars spent by consumers who shop at Wal-Mart’s and eat at McDonald’s. Where else does Ford Motor get the money to pay its corporate income tax, if not from dollars spent by Middle Americans on Ford cars and trucks?

Middle America pays the corporate income tax.

How could we make up for the lost revenue to government?

Simple. The corporate income tax last year produced $273 billion, less than a tenth of federal revenue. Imports, which kill U.S. jobs and subtract from GDP, totaled $2.7 trillion last year.

Put a 10 percent tariff on imports, and the abolition of the U.S. corporate income tax becomes a revenue-neutral proposal.

Looking back, consider what our political class has done to our once self-sufficient American Republic.

We impose on businesses, our principal job creators, the most punitive corporate tax rate in the West. Through “free trade,” we tell U.S. companies that if they wish to avoid our taxes and get around our minimum wage, health, safety, and environmental laws, they can move to China, produce there, and bring their products back free of charge — and kill their competitors too patriotic to leave America.

“The Decline and Fall of the United States of America” is going to a piece of cake for future historians to write.

[Patrick J. Buchanan is the author of “Suicide of a Superpower: Will America Survive to 2025?”] COPYRIGHT 2014 CREATORS.COM

Gort
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If you did cut corporate

If you did cut corporate income taxes to zero in the US, it does not mean new US jobs will be created or lower prices will follow.

Sorry Pat but Pfizer is a bad example. They don’t pay the 35% tax rate or anything close to it, (as most corporations don’t,)

http://www.americansfortaxfairness.org/files/Pfizer-Fact-Sheet-FINAL.pdf

What it will do is give corporations more money to field more K Street lobbyist demanding more favors of the government. So if corporations don’t pay any income tax, the favors they get will be at the expense of other taxable sources of income like labor.

I think the taxes corporations pay should equal the amount of the benefits they receive from the government.

G35 Dude
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GORT

Corporations don't pay taxes. They either raise the price of the product so that the consumers actually pay or they skip off to another country. Another reason that we need the Fair Tax.

G35 Dude
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Can you say Fair Tax?

We need the Fair Tax. Just by converting to the Fair Tax the government would save $8-$10 trillion by eliminating 75-80% of the IRS. Companies would save by not needing as many accountants to track taxes. Companies would have no incentive to relocate etc. The problem is that this takes too much power away from our politicians. So they'll never allow it.

mudcat
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So, is this not the point where we take power away from them?

And I don't mean by voting them out of office. Maybe cut off their funding by not paying taxes until they come up with something better than what we have now? Fair Tax is good, 9-9-9 is ok as well, actually anything would be an improvement.

Where's Thomas Jefferson when you need him?

G35 Dude
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mudcat
Quote:

Where's Thomas Jefferson when you need him?

I think he's dead.

mudcat
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Where is someone living today like Thomas Jefferson?

Someone who cares deeply about the country and can actually do something.

Is that better carboy/history professor/grammar policeman? Doing the best I can here.

My point of course is that once in a while we need to refresh the tree of liberty with the blood of patriots. Not that Lois Lerner is a patriot by any definition, but her blood needs to be shed first and then we can all move along.

Time machine time: How about projecting Lois back to the 1780's and see what they think about her or the IRS. Or we can project Thomas Jefferson into 2014 and see what he thinks about Congress and the White House and the IRS - especially the tax on capital gains. Go ahead, ask him - I dare you.
I'd like to see him interviewed on TV by Anderson Cooper and later Al Sharpton.

G35 Dude
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mudcat

LOL In spite of my teasing I do agree with you. If only we had that time machine!!!!

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