Janet Yellen, Biden’s Treasury Secretary knows the higher corporate tax rates Biden wants will reduce American competitive ability to compete globally. Her answer to this is to get other countries to raise their corporate taxes. To achieve this objective she seems willing to give international bodies the ability to determine our tax rates. It is an awful policy direction; one that I hope fails.
This article is a fairly good summary of the state of understanding who actually pays the corporate tax, since it is certainly not the corporation. In articles i wrote about our tax system I advocate eliminating the corporate tax entirely. Those articles can be found in the category “tax policy”.
Biden’s tax proposal involves raising the corporate tax rate to 28%, putting the U.S. corporations at a substantial competitive disadvantage. The Treasury Department has been working with other governments to get them to raise their rates so all countries can increase their revenue and fool the public into thinking they are not paying the tax that is really another cost to businesses.
I have written several articles on U.S. taxation policy. In all, I have always recommended a corporate tax rate of zero. My reasons are delineated on the posts under “Things I have Written”. These letters to the editor offer additional reason, all written in response to an essay by Janet Yellen.
I got to know Kevin when he was head of the Economics Policy group at American Enterprise Institute. He’s exceedingly bright, not ideological and completely fact and analytic based. I admire him and his work. This essay is the first of what he says will be a series on various aspects of a likely policy agenda of a Biden administration, if we are so unfortunate as to have this pliable, mediocre man become president. Kevin’s essays will be interesting and thoroughly researched. To make it easy for the reader of this blog to find them, I’ve set up a new category “Biden’s Policies” which will hold all of Kevin;s essays.
The scholars at American Enterprise Institute are among the brightest and most thoughtful in America. In this compilation, nine of them offer their views on what the next president needs to do. They cover a range of topics from governmental reform, the pandemic, the looming debt crisis and others. I have not posted each of these essays but you can read them by clicking on the appropriate link.
FDR is today celebrated as an outstanding president who brought us out of the depression in much the same way that President Obama is lauded today for leading us out of a severe recession. There plaudits are not deserved. Roosevelt’s policy extended and deepened the depression and Obama’s was the worst recovery in almost a century. Yet, Democrats never seem to learn and Biden’s economic plan is likely to be even worse, if it passes and if he is elected.
This article was written early in President Obama’s second term. It points out that the Obama claim of a great recovery was wrong; the recovery was miserable. It also argues that his program for improving the economy was not working and would not work. Finally, It argues that the best way to help the economy is to eliminate the corporate tax entirely or, at least, lower the rate to competitive international levels. This finally got done in the Trump tax code revision but the cost of getting this benefit was reducing the tax burden in other areas that would have little economic impact.
I’ve written a lot about our tax system and this essay deals with one aspect of our tax code – corporate tax rates. The left thinks corporations “do not pay their fair share”. Of course, their fair share is never defined. I argue that the best corporate tax rate would be zero; that would have a huge, beneficial effect on our economy. It would only be bad for politicians.
President Obama made a number of speeches about the need, as he sees it, for high income earners to pay more in taxes. Warren Buffett, a long time friend and a person I greatly admire, supported Obama’s assertion with an extraordinary example. He pointed out that his secretary had a higher income tax rate than he did and this was wrong. I thought the whole discussion was nonsense. If you read all my essays, you’ll see I dealt with this version of class warfare a number of times. When Warren made his public comment, I thought a rebuttal was in order. The number and vitriol of the letters written in response to my op ed was really interesting. I enjoyed reading all those comments at the time. My op ed in the WSJ certainly got people’s attention
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