Skip to main content

Corporate Taxes, the unintended consequences

Why do I keep writing economics? Nobody's listening. What do I know anyway? In one way knowing is living through it. That's the economics of the street.

An observation anyway: the higher than the rest of the world corporate tax structure in the US (35%) introduces two unintended consequences. One, a corporation including its officers can retain more of their collective income by paying sky-high bonuses thus reducing corporate income, that is, providing the officer's tax rate is substantially lower than the corporation's tax rate. Given a corporate tax rate of 35% that would be a probability. The solution would be to lower corporate tax levels below those of the executive officers, vise versa or a combination of both.

Sequestering foreign revenue from overseas factories in overseas accounts retains more of the corporate earnings whilst enjoying overseas tax rates far below our own. The corporation finds no way to bring those earnings back home, so if invested at all, the earnings are invested outside the US. The solution would seem to be a lower US tax rate than the foreign tax rate. It would not hurt to give a one time tax exemption for corporations to bring their earnings home.

Is there any wonder?
Labels:

Comments

Post a Comment

Popular posts from this blog

Existentialism

There are more things in this World Horatio, than are dreamed of in your philosophies Shakespeare Definitions from Oxford Languages · Learn more: adjective relating to existence. "The climate crisis is an existential threat to the world." PHILOSOPHY concerned with existence, especially human existence as viewed in the theories of existentialism. "The existential dilemma is this: because we are free, we are also inherently responsible." LOGIC (of a proposition) affirming or implying the existence of a thing. the existential proposition that truth and reality are constructed fictions" Even physicists struggle with truth. Reality in the laws of physics repeatedly give way to new findings. The James Webb Telescope finds galaxies beyond the time and space of the established Universe. Anthropologists find evidence of civilizations earlier than documented history. What is truth? The use of the word existential as a syndrome for virtual truth begs the question o...
Post a Comment
Read more

Rick Atkinson

THE FATE OF THE DAY , just released, The war for America QUOTE George Washington. Our conflict is not likely to cease so soon as every good man would wish....Our cause is noble. it is the cause of mankind, and the danger to it springs from ourselves. March 31, 1779
Post a Comment
Read more

Domestic Labor

A smal incrament of domestic economic activity drives a large increase in the GDP. Vvelocity times money supply equals gross domestic product (GDP). The Velocity in single didgits when multiplied by money in the trillions has far greater effect than interest rates. For many decades, society overlooked and denounced Domestic labord. IRS reporting requirements, imcontax on the worker and social stigma discouraged if not eliminated this valuable segment of the labor force. Tax free, regulation free, domestic employment would add a significant boost to the overall economy, employ the unemployable, and provide shelter to the homeless, not a hundred percent, but to a significant degree. Think affordable houskeeping, cooking, and babysitting for the single mother working long hours.
Post a Comment
Read more