Saturday, May 23, 2009
Obama's Tax Grab
"President Obama revealed Monday that he's half a supply-sider. If only someone could explain to him the other half. We have a tax code, the President said, 'that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York.' ... Set aside that India is a poor example to make Mr. Obama's point, since its corporate tax rate on foreign-owned companies can be as high as 55%. ... The current tax-deferral system is a clumsy attempt to deal with the fact that most other countries don't tax their companies' overseas profits. ... And because almost everyone else's corporate tax rates are lower than America's ... , US companies end up paying higher taxes than their international competitors. ... America now has the worst of both world's--a high statutory tax rate and a tax code so riddled with complexity that it is both expensive to administer and inefficient at collecting taxes. And yet Mr. Obama's proposal to limit deferral only layers on the complexity. ... Some of Mr. Obama's advisers understand all this, but then their real goal isn't tax reform or US competitiveness. It's a revenue grab, one made easier by the fact that overseas tax 'avoidance' is easily demagogued. ... But even as a revenue raiser, this is likely to fail. Fewer companies will keep their headquarters in the US, especially small or mid-sized firms that can slip away without becoming a political target", Editorial at the WSJ, 6 May 2009.
The Obamites won't get much from this. I agree with WSJ. "Mr. 57 states" is apparently innumerate, like many other lawyers. See my 22 December 2007 post: http://skepticaltexascpa.blogspot.com/2007/12/us-injustice-system-at-work.html.