creators.com opinion web
Liberal Opinion Conservative Opinion
Patrick Buchanan
Pat Buchanan
30 Sep 2014
Barack Obama, Outside Agitator

In his U.N. address, President Obama listed a parade of horrors afflicting our world: "Russian aggression in Europe,"… Read More.

26 Sep 2014
A Basket of Snakes

"Once war is forced upon us, there is no other alternative than to apply every available means to bring it to … Read More.

23 Sep 2014
Is Burger King an Economic Patriot?

"Merchants have no country. The mere spot they stand on does not constitute so strong an attachment as that … Read More.

Abolish the Corporate Income Tax!

Comment

News that Pfizer, the world's largest pharmaceutical company, plans to buy Britain's AstraZeneca for $106 billion, renounce its U.S. citizenship, and declare itself a British company, has jolted Congress.

Pfizer is being denounced as disloyal to the land of its birth, and politicians are devising ways to stop Pfizer from departing.

Yet Pfizer is not alone. Hedge fund managers are urging giant corporations like Walgreens to go nation-shopping for new residences abroad to evade the 35 percent U.S. corporate income tax.

Britain's corporate income tax is 20 percent, and Pfizer stands to save over $1 billion a year by moving there.

In what are called "inversions," dozens of U.S. companies have bought up foreign rivals, and then moved abroad to countries with lower tax rates, cutting revenue to the U.S. Treasury.

But Pfizer is far and away the biggest.

The real question, however, is not why companies are fleeing the USA, but why our politicians continue to drive them out of the country.

Consider. Here in America we do not tax charities, churches or colleges. Yet these institutions produce a fraction of the jobs that businesses produce.

If, as a nation, we are committed to "creating jobs," does it make sense to impose the highest corporate tax rate in the Western world on our biggest and best job creators?

Is this not economic masochism?

Many governors understand that if you want something in your state, you do not drive it out with high taxes. You strengthen the magnet of low taxes. Florida wants residents of other states to move there and retire there, so it has no income, estate or inheritance tax.

For years, Rep. Jack Kemp urged the creation of enterprise zones in poor communities like Benton Harbor, Michigan, and Harlan County, Kentucky. Businesses that relocated there would be exempt from corporate income taxes.

Why not make the United States the largest enterprise zone on earth — by abolishing the corporate income tax?

If the corporate income tax were repealed, no U.S. company would think of moving abroad, and every transnational company would think about moving to the USA.

What a message this repeal of the U.S. corporate income tax would send to corporate headquarters worldwide: Relocate your company or next factory to the USA, keep every dollar of profit you earn, and either reinvest it here or take it home. Your call.

How would America benefit?

Every U.S.

company, liberated from its corporate tax burden, would see its profits soar and have more cash on hand for cutting prices, raising wages and salaries, and new investment and hires. And every company that relocated here would create new U.S. jobs.

This would be a stimulus package to end all stimulus packages.

Isn't this what we all want? Or are we not willing to create jobs here if the means of doing so conflict with redistributionist ideology?

Consider the other benefits of abolishing the corporate tax.

Corporate lobbyists, who spend their days walking Capitol Hill corridors seeking tax breaks, and their evenings at fundraisers handing $1,000 checks to congressmen who can create tax loopholes — in a form of legalized corruption and glorified bribery, could be put out to pasture.

Armies of tax lawyers, accountants and IRS agents could be shifted to more productive work. Companies could focus full time on creating new wealth, not finding ways to keep what they have earned.

Many politicians seem to think the corporate tax punishes the rich and powerful and is an indispensable weapon in reducing inequality and redistributing wealth. This is neosocialist myth.

As Ronald Reagan used to say, corporations don't pay taxes, people do.

The billions in corporate income taxes paid by Wal-Mart and McDonald's come out of the dollars spent by consumers who shop at Wal-Mart's and eat at McDonald's. Where else does Ford Motor get the money to pay its corporate income tax, if not from dollars spent by Middle Americans on Ford cars and trucks?

Middle America pays the corporate income tax.

How could we make up for the lost revenue to government?

Simple. The corporate income tax last year produced $273 billion, less than a tenth of federal revenue. Imports, which kill U.S. jobs and subtract from GDP, totaled $2.7 trillion last year.

Put a 10 percent tariff on imports, and the abolition of the U.S. corporate income tax becomes a revenue-neutral proposal.

Looking back, consider what our political class has done to our once self-sufficient American Republic.

We impose on businesses, our principal job creators, the most punitive corporate tax rate in the West. Through "free trade," we tell U.S. companies that if they wish to avoid our taxes and get around our minimum wage, health, safety, and environmental laws, they can move to China, produce there, and bring their products back free of charge — and kill their competitors too patriotic to leave America.

"The Decline and Fall of the United States of America" is going to a piece of cake for future historians to write.

Patrick J. Buchanan is the author of "Suicide of a Superpower: Will America Survive to 2025?" To find out more about Patrick Buchanan and read features by other Creators writers and cartoonists, visit the Creators Web page at www.creators.com.

COPYRIGHT 2014 CREATORS.COM



Comments

2 Comments | Post Comment
What wrong with you opinon? Is fantasy. Companies already for many years see profits soar. Have been given tax breaks, free money from taxpayers given by goverment to give back to taxpayers but they no do. They keep and don't spend. Banks and business have much cash on hand today for cutting prices, raising wages and salaries, and to make new investment and new hires as you say. But they no do that. Keep cash and profit. No raise wage and salaries. cut jobs. Lower salaries. End benefits. Steal pensions. Make only low pay jobs and no raise for many years. No want to pay taxes like rest of us. No want to pay fair wages to any of us. So they go. America need stop military protecting they corporate interests overseas.
Comment: #1
Posted by: steveM
Mon May 12, 2014 1:47 PM
Reagan may not have considered corporations to have the same rights and responsibilities as persons. However, the SCOTUS has decreed that corporations do have the same rights as persons. Therefore, corps should have the same responsibilities, including paying taxes. Corporations derive tangible and intangible benefits from being U.S. domiciled and there needs to be a monetary value assigned to that, which is the corporate tax rate.
Additionally, you cannot raise tariffs without expecting trade partners to simultaneously raise their tarrifs, offsetting the original intention and reducing the effect and benefits.
Comment: #2
Posted by: kathon
Tue May 13, 2014 12:03 PM
Already have an account? Log in.
New Account  
Your Name:
Your E-mail:
Your Password:
Confirm Your Password:

Please allow a few minutes for your comment to be posted.

Enter the numbers to the right:  
Creators.com comments policy
More
Pat Buchanan
Sep. `14
Su Mo Tu We Th Fr Sa
31 1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 1 2 3 4
About the author About the author
Write the author Write the author
Printer friendly format Printer friendly format
Email to friend Email to friend
View by Month
Authorís Podcast
Ray Hanania
Ray HananiaUpdated 2 Oct 2014
Froma Harrop
Froma HarropUpdated 2 Oct 2014
Lawrence Kudlow
Lawrence KudlowUpdated 2 Oct 2014

11 Oct 2011 The Religion Card Is Turned Face Up

27 Jul 2012 In the Long Run, Is the GOP Dead?

26 Jun 2007 Will Bloomberg Swift-Boat Hillary?