Let’s get it out of the way- like it or not corporations for the most part aren’t evil. What’s the biggest business in the United States? Microsoft? Apple? Amazon? GM? Nope, it’s the United States Government— it has gotten so big that it is the number one employer in the US— that is an astonishingly frightening thought if you’ve ever spent any time at the Post Office (yes not paid for by us I know), the DMV, The Social Security Office, City Hall or watched a road crew where one guy is working and eleven guys are standing around watching him work. The thing that boggles my mind is those are OUR tax dollars. People get all kinds of excited when somehing is “Federally” Funded— where do you think those funds come from in the first place? So the least efficient corporation in the United States is the one WE THE PEOPLE pay for?
Wow.
Okay, tax the hell out of corporations. There is a proposal to Tax Corporations 28%— that’s only fair right? Coporations only duty is to answer to the share-holders— which once again, surprise! It’s us. Or those of us who invest in such things.
The current coporate tax rate in the United States is 21%. Let’s not forget that Colleges and Universities are generally exempt from taxes despite massive profits. Funny how no one seems to want to go after them. At 21% that’s fairly high on the world stage but it’s workable, at 28% all you will do is send those same corporations to Ireland where the Corporate Tax Rate is 12.5%. Say goodbye to the local jobs and money that goes into the economy, 12.5% is pretty enticing.
All you do by raising the minimum wage and the corporate tax rate is create Detroit. Been to Detroit lately? When the car companies pulled out they took the high paying jobs with them and they left an economic ghetto in it’s place. Detroit has been on a rebound but its nowhere near it’s glory days of manufacturing.
It’s simple economics.
It’s why Socialism doesn’t work. If we take it to a local level, and I mean really local, imagine for a minute that you live in House A— on either side of you are houses B and C and across the street is house D.
You and your spouse work and you make a pretty comfortable income of $125k per year. When you were a kid you thought this would make you rich, but the reality is you still have to shop sales and probably use coupons. Of your $125k you pay roughly 22% in taxes so $28k goes to Uncle Sam and Auntie State. You still have $97,000 left over (and I also want to remind you there was a time when we paid NO INCOME TAX and when they introduced it they told us it was temporary). Well, bad news because under socialism you have to give some to house B and C because they don’t choose to work. Lucky for you, house D also works so you and they will split the bill— but after the first year guess what, house D decides to sell and move somewhere else that doesn’t enact such a proposterous idea and now you’re left with the whole bill.
It’s simple economics. The “rich” are far more likely to donate to causes, support public funding, help charities until they are forced to do so— then they take their money and they move somewhere else— probably Ireland. And now that neighborhood that you lived in is occupied by four families who don’t choose to work, so the cancer spreads to the houses adjacent to them, now houses E, F, G and H have to foot the bill for the four houses that don’t contribute.
And I’m not saying there should not be a support system for people down on their luck. Unempoloyment insurance is something we all pay into, but it’s benefits are limited because it’s designed to be a step not a crutch.
Social Security? I think we don’t pay out enough- if you worked your whole life and you retire you should have no ecomomic worries, and we could do that if we didn’t waste so much money everywhere else, including the Deficit which no one likes to think about because when you’re talking about a Trillion Dollars our calculators explode.
I’ll wrap up simple economics tomorrow.