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Look at the graph below and it is easy to see what is wrong with that picture.
Combined Corporate Tax Rate
The US government is signaling to business that if they have a choice there are better places than the U.S. to invest new jobs and grow. Any first year financial analyst would recognize that the return on investment needed to invest in America must be at least 13% better than other OECD (Organization of Economic Co-Operation and Development made up of countries with established, emerging, and developed economies committed to global development) countries in order to make sense.
In times of trouble, Americans should work together to solve our problems; fighting amongst each other just creates more troubles. While the U.S. has been brought to its knees by the worst economic period since the Great Depression, states continue to fight with each other to attract businesses. Their weapon of choice, the state-level corporate income tax rate.
Debt, Deficit, Taxes are the talk of the town right now. Whether government spending and taxes are too high or too low is a confounding issue. Right now there is a consensus that the current corporate tax rates scare away foreign business and push U.S. companies into investing abroad. Neither of these actions helps the U.S. get out from under its mound of debt. In all of the confusion, there is a solution that helps both businesses and the U.S.
Like many Americans I have become fed up with the debt ceiling debate. How many more articles do we need to read about potential solutions that go nowherein the contentious nature of today’s Washington? The situation got so out of hand that President Obama and House Speaker Boehner spoke directly to the American people to drive support for their plans. The President specifically said “I’m asking you all to make your voice heard. If you want a balanced approach to reducing the deficit, let your member of Congress know.” Calls and emails to the White House and Congress surged, but it seemingly has had little impact, if any at all.
The recently passed debt ceiling deal, the Budget Control Act of 2011, is already being attacked for its deficiencies. The bill was a necessary short-term fix for raising the debt ceiling to prevent a governmental default. However, it does not adequately address long-term fiscal problems. Reflecting the deal’s inadequate fiscal reduction plan to stabilize the government's debt, Standard & Poors downgraded the US credit rating from AAA to AA+.
243,000 new jobs? This is more than respectable. No unseemly disparagement by Republicans welcome, nor victory lap by Democrats. A pox on both their houses.
Proto-Supply Sider (who, among other things, generously cut oppressive tariffs) King Canute achieved mythic status by ordering the tide to cease rising. What often is forgotten is that he did so to show his sycophants the limits — not extent — of his powers.
As medieval chronicler Henry of Huntington wrote:
[A]t the summit of his power, he ordered a seat to be placed for him on the sea-shore when the tide was coming in. Then, before a large group of his flattering courtiers, he spoke to the rising sea, saying, ‘Thou, too, art subject to my command, for the land on which I am seated is mine, and no one has ever resisted my commands with impunity. I command you, then, o waters, not to flow over my land, nor presume to wet the feet and the robe of your lord.’
The tide, however, continued to rise as usual, dashing over his feet and legs without respect to his royal person.
Then the King leaped backwards, saying: ‘Let all men know how empty and worthless is the power of kings, for there is none worthy of the name, but He whom heaven, earth, and sea obey by eternal laws.’
“Obey … eternal laws.” The business cycle is as sacrosanct as the law of gravity. Utopians sacrifice Virgins and pray (Cut Entitlements!) for Endless Summer; Neo-Keynsians chant mumbo jumbo (Stimulate Aggregate Demand!) and command winter to end. Harry Truman famously once said (long safely retired from the presidency): “My choice early in life was either to be a piano player in a whorehouse or a politician. And to tell the truth, there’s hardly any difference.”
By Richard Callahan
Job creation almost nil, unemployment increasing, the left is angry, the right is up in arms and the center is grumbling. What is wrong with this great experiment that promised so much?
Almost 4 years ago an eloquent, energetic, charismatic political outsider, Barack Hussein Obama, burst upon the scene. He arrived at a time of great economic turmoil and dissatisfaction with the regime in power and promised sweeping change. He promised change from an economic downturn gripping the country. He promised new, forceful leadership in which all citizens of the country would be united as one and prosperity and economic vibrancy would once again be restored. He promised American international leadership and the restoration of the American dream. Sadly, his promises have proven to be empty rhetoric and his policies have wreaked destruction on the unity of America, it's economy and the hope of so many Americans who believed his false prophecy.
By Tammy Frisby
This blogpost originally appeared on Advancing a Free Society, on June 12, 2012.
This week’s installment of Data Matters features data presented by Tammy Frisby, a research fellow at the Hoover Institution who also teaches in the political science department and public policy program at Stanford.
This week on Capitol Hill, there was renewed attention to the looming Taxmaggedon (or Taxmageddon; take your pick), which involves, among other pending tax code changes, the scheduled expiration of lower tax rates on income, dividends, and capital gains, and the end of the extended payroll tax holiday. There is now more public talk from senators and members of Congress about using the threat of Taxmaggedon in January 2013 to build a legislative coalition for a sweeping tax overhaul that would preempt the economic and political damage that Taxmaggedon would wreak.
By Michael Lombardi
Just outside Los Angeles is the City of Compton, home to 93,000 people…a city running out of money. As the city treasurer eloquently put it, he has $3.0 million in cash and $5.0 million in bills due in the next month. (Source: Reuters, July 18, 2012.)
If debt restructuring decisions are not made soon, the City of Compton could file for bankruptcy as early as September.
Due to the fact that Compton has a $43.0-million budget deficit hole, it has been unable to secure a line of credit to get it through a difficult period. The reason why it can’t secure a line of credit is that the budget for 2012 is forecasting a further budget deficit of $9.0 million!
By Bea Kath
The Congressional Budget Office (CBO) released a report to show how Obama’s tax hikes, signed into law last month, will affect the federal government’s fiscal outlook.
Here are some highlights: