What do call the economy of a country with a 35% corporate tax rate? How about “dismal?” “Pathetic?” Perhaps “out of touch?” How about “American?”
The United States enters the second decade of the third millennium with the second highest corporate taxes in the industrialized world; but it won’t stay there for long . . . Japan’s Prime Minister Naoto Kan said he will lower that nation’s corporate tax rate from 40% to 35%. That's almost funny . . . Kan expects to revive his nation's moribund economy by dropping them into a tie for first place corporate taxer with America? Germany with one of the healthier world economies charges 29%; South Korea does better and has only a 24% corporate tax.
Republicans planning to spur job creation have announced their goal of a 20% corporate tax retroactive to today, New Year’s Day January 1, 2011 to stimulate the economy and jobs growth the old-fashioned way by rewarding job-creators directly. Right now American corporations are seeing a huge growth in jobs . . . but . . . overseas in far friendlier tax environments. But the issue is not just important to Republicans and TEA Party members, but actually bi-partisan.
According to G.O.P. Senator Judd Gregg of New Hampshire and Oregon Senator Ron Wyden, a Democrat a twosome who are co-sponsoring a bill to make an 11% tax cut down to 24%, by eliminating a few tax breaks and instituting the corporate tax cut, the United States will instantaneously become far more competitive “with the world’s present up-and-coming economies.” However, there do appear to some Grinches in the picture: Nancy Pelosi, Harry Reid and the Grinchiest of them all: Barack Obama. Despite the balanced approach favored by Wyden and Gregg, Obama-Pelosi-Reid and their progressive followers insist that the corporate tax hike can only occur if energy taxes are allowed to rise. Let’s see, energy prices go up; then transportation prices go up; then the price of everything in the economy really goes up and . . . you guessed it, we’ll see fewer jobs in America not more.
It’s high time Barack Obama admitted that his two most evil . . . promises which he made in an interview with the San Francisco Chronicle in 2008 before the election . . .
#1 “My energy policy will bankrupt the coal industry”
#2 “In accord with my cap and trade energy program, the price of electricity will necessarily sky-rocket . . .”
and his even eviler promise
#3 To “create five million green-tech jobs” which (if the study of the decimation of Spain’s economy after a similar program was initiated taking the country from less than 4% unemployment to 20.8% today) can be expected to cost 11 million jobs in the wider American economy (not to mention that in all similar instances, only 10% <500,000> of the green jobs will prove permanent) . . . altogether these three promises will literally destroy the American economy if Obama is allowed to keep them.
Grow up, Mr. President, learn the lessons most of us learned in our college Econ-101 Class:
- A. What government taxes you get less of. Tax energy profits more there’ll be less energy profits.
- B. “Profit” is not an evil word. Profit keeps the doors of a business open. Profit keeps the company from becoming a bailout candidate. Profit creates jobs. Tax energy profits and we’ll not only see fewer energy jobs from the real economy; we’ll see far fewer jobs across the entire economy.
- C. Government interference in the free market is the chief cause of the booms and bust cycles in those markets.
Speaking of “government interference” a.k.a. government boondoggles, do you remember what happened shortly after progressive President Jimmy Carter was inaugurated roughly 34 years ago? They created a new program forcing the banks and mortgage companies to knowingly make bad home loans with something called the Community Reinvestment Act of 1977. Funny thing, in Arkansas the very same year of CRA ’77, they created the Arkansas Community Organizations for Reform Now (ACORN) which helped Bill Clinton become governor of that state via a bit of voter fraud; meanwhile they were browbeating Arkansas lenders into complying with that stupid law. Later as President, Bill Clinton would expand that law four times (Regulatory expansion as soon as he was elected in 1993; two new legal expansions in 1995; and the steroid version of CRA ’77 in 1998. In 1975, for every 404 home loans only one was completed at 3% down payment or less.
In 2005, 34% of home loans were written at 3% down or less (many of them at 0% to people without jobs; without good credit ratings; whose only “income” was food stamps; and even to illegal aliens all thanks to the nationwide, grown-up version of ACORN (now the Association of Community Organizations for Reform Now). That despite the progressives claims that it was the free market that gave us the current debacle . . . that was what caused the sub-prime lending crisis that precipitated the current meltdown. By the way George W. Bush spoke to Congress 19 times before a 2007 law somewhat reining in CRA ’77 was passed in July, 2007 . . . a law 30 months later and far, far less effective than the law he asked for originally in January, 2005.
As far as the corporate tax rate, the ball will soon be in Mr. Obama’s court. Nancy Pelosi has no more power to stop it. Harry Reid will probably NOT be able to stop it. Let’s see if Mr. Obama grows up and learns his lessons; let’s see how he plays tennis . . . .
Ya’all live long, strong and ornery,