Tag Archives: taxes

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.

“Don’t Tax You…”

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“…Don’t tax me;
Tax that rich guy
Behind the tree.”

With (not too) many apologies to Russell Long.

New York’s Progressive-Democrats are on the move, again.

New York Governor Andrew Cuomo and state legislators are close to reaching a budget agreement that would raise taxes on residents earning over $1 million.
If approved by the Democratic governor and Democrat-controlled legislature, New York would become the state with the highest personal income tax rate in the country.
The budget measure also includes increasing the state’s corporate tax rates….

And

The proposed changes would increase tax rate from 8.82% to 9.65% for individuals making over $1 million or those joint-filing making more than $2 million.
Two new additional tax brackets would also be created –10.3% for those making $5 million to $25 million, and 10.9% for those making over $25 million.
New York City high-income earners could be paying the highest in the country in personal income taxes. By adding New York City’s additional top-earner tax rate, those making over $1 million could pay as high as a 14.8% tax rate, surpassing California’s 13.3% tax rate, the highest in the country.

The State’s Progressive-Democrats already tax the hell out of all the yous and mes in that State, also, though, so Long’s plea is being implemented much more broadly.

It’s important to recall, also, another of Long’s aphorisms:

I have become convinced you’re going to have to have capital if you’re going to have capitalism.

New York’s Progressive-Democrats are bent on denying precisely that to the State’s private economy. That says volumes about Party’s ultimate goal.

Infrastructure Biden-Style

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That’s what his latest tax-and-spend multi-trillion dollar bill that he’s masquerading as an infrastructure bill is—a misleading mess of profligacy. Here’s some of what’s in it besides actual infrastructure monies.

  • $174 billion for electric vehicles
  • $400 billion on home-based care for the elderly and disabled
  • $25 billion on child care facilities
  • $50 billion on “research infrastructure” at the National Science Foundation
  • $213 billion for home sustainability and public housing
  • $35 billion+ for climate change R&D
  • $50 billion to create a new office at the Department of Commerce to “dedicated to monitoring domestic industrial capacity and funding investments to support production of critical goods”
  • $30 billion to prepare for future pandemics
  • $45 billion so the Feds can buy “clean energy goods”
  • $14 billion “to bring together industry, academia, and government to advance technologies and capabilities critical to future competitiveness”

That’s more than $1 trillion out of Biden’s $2 trillion demand for his bill. Many of these things might actually be worthy projects—depending on pesky details—but they have no place in a real, legitimate infrastructure program.

And there’s this non sequitur that has no immediate cost, but it will reduce take-home pay of non-union members to no useful purpose and greatly limit our economy and drive up prices through greatly increased union costs:

[T]he PRO Act, which would essentially override right-to-work laws in states across the country, allowing unions to extract dues from workers who do not want to be members.

Senate Minority Leader Mitch McConnell (R, KY):

It’s like a Trojan horse. Its called infrastructure, but inside the Trojan horse it’s going to be more borrowed money, and massive tax increases on all the productive parts of our economy.

Indeed. Dollars—trillions of dollars—out of our economy immediately and trillions more for the foreseeable future.

Gross Misunderstanding

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And a key distinction between what the Left and their Progressive-Democratic Party want and what Conservatives and, to an extent, the Republican Party want. President Joe Biden (D) fronts for this…position…and his Treasury Secretary Janet Yellen made it explicit last Tuesday in front of the House Financial Services Committee:

We’ve had a global race to the bottom in corporate taxation and we hope to put an end to that.

The fact—I claim—is that the race to the bottom is a National Good, not a National Bad. Our Constitution specifies only three things our Federal Government is allowed to spend money on: to pay the Debts and provide for the common Defence and general Welfare of the United States. The general Welfare is further specified by the remaining clauses of that Article I, Section 8.

The only legitimate purpose for taxing is to raise revenue for those three narrowly specified items.

Above that low floor (or it would be low were we not living in a dangerous world with many enemies for whom the vasty oceans no longer represent serious barriers and were it not for out Government having been so profligate with spending for so many decades), the more money left in the hands of We the People in our private economy for our spending decisions, the better.

So, yes—a race to the bottom is good for our nation, the prattle of the Yellons and the Bidens and the Party notwithstanding.

Misapprehensions

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More in a long list of Leftist and Progressive-Democrat misapprehensions. Recall that President Joe Biden has abandoned the Trump administration’s Public Charge Rule. That rule required immigrants be financially stable to become US citizens or obtain permanent residency.

Naturally, the Leftist critics are coming out of the woodwork with their objections.

…the policy hurts those trying to obtain citizenship or [permanent] residency. The Legal Aide society [sic] called the policy a “wealth tax” that discriminated against people on the basis of race and immigration status.

One misapprehension is this business about hurting those trying to obtain citizenship or [permanent] residency. No nation has any obligation to grant residency—permanent or otherwise—or citizenship to anyone wishing to immigrate (more on this in a bit). No nation has any obligation even to entertain such applications. Hence no injury is possible here.

Another misapprehension: the idea that any sort of wealth tax is being applied from a public charge sort of rule. There is no tax intrinsic or even implied in requiring prospective residents or citizens to be independent of the receiving nation’s welfare system, in requiring them to be able to fend for themselves or to rely on their own family. The only tax involved would be the added burden on the receiving nation’s extant taxpayers.

Yet another misapprehension: the idea that requiring a degree of independence or self sufficiency as a prerequisite to residency or citizenship is somehow racist. This beef suggests that prospective immigrants are, because of their race, inherently unable to see to their own welfare. That attitude itself is invidious and racist.

A fourth misapprehension: the idea that any sort of public charge criterion discriminates on the basis of immigration status. No. National borders effect that discrimination. It’s one of the purposes of national borders, it’s a part of maintaining and enforcing a nation’s sovereignty. No one, nor any collection of people, has any inherent right to enter another nation without that nation’s prior permission. Neither has that nation any obligation to grant that permission.