Why doesn't the US tax code ever get simplified, less onerous or cut
from its 80,000 pages after decades of politicians offering their own
version of how it could be done?
To learn the answer you need look no further than to a bold comment
made at the first Republican presidential debate by Donald Trump,
"All politicians do is talk"!
Many in the audience agreed, and not one politician on the stage
attempted to refute what he said, nor could they!
This election year Trump, like most others, is offering his own
version to replace the current complex and convoluted tax code
with one that is simpler, fairer and stimulates economic growth.
Although different versions offered have merit, most retained the
'anchor' that holds down American businesses from competing
against foreign companies and investing in their companies, the
corporate tax!
Its long been said corporations don't pay taxes, people do in
the added cost they pay on products and services. If this is
true than a corporate tax defeats the purpose of shared taxation!
The US corporate tax is not only one of the highest, its the
reason businesses and organizations have offices in Washington,
close to politicians and federal regulators so they can cajole
for favors that benefit THEIR interests, not the country's!
Nor would companies have to retain offices in Washington to do
business with the IRS.
Abolishing the corporate tax will also move us closer to what we
deserve, an honest tax system to fund the govt., without doling
favors to influence peddlers.
What would the elimination of the corporate tax cost us? In 2015
businesses paid $340 billion or only 11% of total collected, an
amount not much more than what we pay to Japan, Great Britain
and China each year in interest payments on our exploding debt!
But, is it really a lose if the benefits are greater?
First, why leave more money then necessary in the hands of people
who have proven to be irresponsible and tolerate "waste, fraud
and abuse", a long standing catch phrase of a dysfunctional system
that needs to be overhauled?
This $340 billion could be better used when retained by companies
to strengthen their competitiveness, investing in expansion, better
equipment leading to hiring more employees, all which drives
increased federal revenue!
Plus, the $340 billion is not all companies pay to meet their tax obligations,
tens of billions are the unseen cost of compliance.
But something else should be abolished along with the corporate tax,
the federal subsidies the govt. provides to select industries such as
agriculture, energy and environmental. Without a corporate tax there
is no need taxpayers subsidize such as fossil fuel at $400 billion,
renewable energy at $66 billion and agriculture at $20 billion.
Additionally, the reluctance of foreign business to establish offices
in the US would be replaced with an 'immigration' all Americans would
welcome, international companies establishing domestic headquarters
without baring the tax burden, and bringing new job growth with them.
The $340 billion 'lose' could become a $500 billion gain!
An unintended 'positive' consequence would be doing away with the
non-profit status which allows qualified organizations a tax exemption!
Non-profits, created to provide tax relief for worthy endeavors, have
abused the privilege. Many have become multi-million dollar enterprises
using the tax exempt status to run businesses and influence what govt.
does, beyond any boundaries of "worthy endeavors" which includes
filling their coffers.
Doing away with this 'industry' will cripple its funding mechanism that
has become one more an impediment to responsible governance.
With almost two million non-profits the rise has also "bought" political
influence. A member of Congress is more likely to answer a call from
a powerful non-profit than an average citizen.
The people may not think eliminating the corporate tax is enough to stimulate
the economy and create more better paying jobs, but this single tax has
greater implications than lowering or ending taxes on low income earners,
increasing the minimum wage or raising taxes on the rich.
One thing the tax experts fail to factor is changing the tax code releases
the power of human behavior. Ending the corporate tax will demonstrate
just how powerful it is.
Please add feedback in comments section
below, or email ajbruno14@gmail.com
"Point of View" blog
http://ajbruno14.blogspot.com/
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