Tag Archives: taxes

Fair Share and Government’s Revenue

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President Joe Biden’s (D) Council of Economic Advisers Chairwoman Cecilia Rouse had some very instructive things to say on Fox News Sunday last weekend.

One was this:

The idea is to make sure that corporations are paying their fair share, to button up some of the loopholes, which have meant more corporations were actually putting more money offshore—off of US soil—and having a global minimum tax so that we’re working with the rest of our trading partners, so that we’re working with the rest of the world so that corporations are paying their fair share worldwide[.]

Couple things on this. One is that business of “paying their fair share.” Once again, a Progressive-Democrat declines to say what that “fair share” is, leaving us to conclude that “fair share” to Party is “more” until Government is getting all of it.

Sadly, too, Fox News Sunday‘s host Chris Wallace chose not to ask her what she considered to be that fair share, choosing instead to let that slide.

Another instructive remark from the FNS segment was this one by Rouse.

Yes, internationally we don’t want to be disadvantaged, so he’s also working with other countries so that we have a minimum tax internationally so there’s not a race to the bottom.

This is another example of the Progressive-Democratic Party politicians pushing us to be more like the European Union. Every nation must charge high taxes with no economic competition among the nations to attract real innovation, real business, real economic activity which can only redound to the citizens of each nation.

Rouse, like the administrative state running the EU from Brussels, insists that a tax rate race to the bottom, a race to leave ever more money in the hands of the folks working to earn that money, is somehow a bad thing.

And that flows from a third instructive Rouse statement.

What we’ve seen over the past several decades is that the wealthiest Americans, the big corporations are getting wealthier, and they’re contributing less in terms of federal revenue[.]

“[I]n terms of federal revenue.” Because it’s not Americans’ money, it’s not (big) corporations’ money, it’s Government’s money.  Never mind that Party (nor Republicans nor Conservatives) have for far too long, justified Government’s claimed need for the money.

Josh Hawley Has This One Wrong

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Senator Josh Hawley (R, MO) is planning to introduce a child tax credit bill that would grant $6,000 to a single parent family with children less than 13 years old, and $12,000 to two-parent families with children in that age group.

We need a plan to help working parents that is pro-family and pro-work. I’ll be proposing legislation this coming week that gives a major tax cut to working parents to help them afford to start a family and raise their kids[.]

I have no doubt that Hawley’s heart is in the right place, but he’s badly mistaken on this.

For one thing, stipulating his underlying premise that tax gerrymandering is a good idea, he misses the point that kids cost the same to raise no matter how many parents they have, and regardless of how many of those parents work. The idea, predicated as it is on giving two-parent families a choice in how many of the parents work, also ignores the simple fact that a single parent not only has no such choice, but she (yes, I’m assuming. Sue me) has no support from a second parent, working or not.

For another thing, his underlying premise is badly flawed. Our tax code has no business being used for social engineering, whether for family support or for any other purpose. The same (tax) cost break could be given to those families, along with all American families and individuals, by limiting our tax code to covering the three—and only three—spending purposes enumerated in our Constitution, and then by setting that tax code to a single, low, flat rate shorn of all credits, subsidies, deductions, on all income, regardless of source, that leaves more of our money in the pockets of each of us.

Internal Tariffs

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Mercantilist tariffs (as opposed to tariffs as foreign policy tools) are purely protectionist, designed to punish competitors for competing. They’re not only aimed at foreign competition, either, as Europe’s auto industry is demonstrating [emphasis added].

Auto makers in Europe eager to boost sales of their electric vehicles have a new strategy: demanding higher taxes on conventional vehicles that burn gas and diesel fuel.
The top executives at several car and truck makers are calling on European governments to introduce the new taxes on carbon-dioxide emissions from gasoline- and diesel-powered cars and trucks as a way to help their EVs better compete.

And there’s this bit of disingenuosity [emphasis added]:

Taxing emissions from polluting vehicles, he [Volkswagen AG Chairman of the Board of Management and VW Group CEO Herbert Diess] and other executives say, would help ensure electric vehicles remain attractive for buyers after the expiration of subsidies that are now sustaining sales.

But don’t you dare think about taxing the EVs’ pollution from mining the materials needed for the batteries, the pollution from manufacturing those batteries, or the pollution from disposing of those batteries when they’re spent.

Once again, if a company’s product is unable to compete in a free market without subsidies for their own products or artificial burdens—those internal protectionist tariffs—laid on competing products, the company’s product is not viable and not ready for market.

Full stop.

Facilitation

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Recall that the Progressive-Democrat-controlled Congress and President Joe Biden (D) enacted a $1.9 trillion Wuhan Virus Relief bill that contained a sliver of money for actual virus-related relief. The bill also included $12 billion in transfer payments for New York to “assist” that State with its budget.

This is what that bill and those $12 billion in transfers also facilitated.

The Democrat-controlled New York legislature has passed a budget deal that includes a $2.1 billion fund for illegal immigrants—including a one-time, $15,600 payment for those who lost their job during the pandemic.

Fully 17% of that Federal largesse—of average American‘ generosity—went to illegal aliens (whether us citizens agree with that or not). It’s plain that the State, at bottom, had no need for those $12 billion, since it has no need to spend the money on the citizens of New York.

Corporate Taxes

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Treasury Secretary and ex-Federal Reserve Chairman Janet Yellen opened her Wednesday Wall Street Journal op-ed with this:

When Congress enacted the Tax Cut and Jobs Act of 2017, the result was a dramatic reduction in corporate tax revenue. Over the past three years, corporate tax collections have fallen to their lowest level since World War II: 1% of gross domestic product.

Amazingly—shockingly—Yellen wrote that as if it were a Bad Thing.

Then she partially rationalized her disparagement with this:

Proponents of the TCJA said the US would get something in return for these tax cuts. Lower rates, the argument went, would lure production and investment to our shores, but that hasn’t happened—and for an obvious reason: other countries see what we’re doing and respond. When they see us lower our rates, they lower theirs to undercut us. In the end, no nation ends up more competitive. The result is a global race to the bottom….

Some of this is plain wrong. We did get trillions of dollars of corporate cash repatriated. We did get production and investment returned. And that spurred the outcome that Yellen so breathtakingly mistakes as a further Bad Thing. Other nations were spurred to compete on tax rates in order to retain their own businesses and to attract foreign investment.

Which drives the race to Yellen’s so-feared bottom.

But what is that bottom? Our Constitution specifies that the only things our Federal government is allowed, legitimately, to raise revenues for are three: to pay the Debts and provide for the common Defence and general Welfare of the United States. Those, with the general Welfare further specified by the remaining clauses of that Article I, Section 8, also, are the only things on which our Federal government may spend our taxpayer money. The other nations, particularly those competing with us on tax rates, have their own taxing (and spending) floors.

Racing to those bottoms may be bad for Government bureaucrats like Yellen, but they’re unalloyed Goods for the citizens of all of our nations, as we get to keep more of our money and make our own spending, saving, investing, and other allocating decisions with our money—and our decisions will be far better and far more efficiently done than any of our Governments can ever hope to do.

And at that natural bottom, nations can stop trying to compete on tax policy and focus on Adam Smith’s competition—providing better quality goods and services. Which is even better for us citizens, if not for the power of Government personages.

Only a Leftist or an entrenched bureaucrat can misunderstand that.