By Douglas V. Gibbs
Obama, and his cronies, are out to stop what has made America great. The Obama White House wants to shake the foundation of America, and drag it to Hell.
They claim they are in your corner, and it is the rich they hate. They claim they wish to close tax “loopholes,” because these tax rules allow the wealthy to get out of "paying their fair share." His goal to cut corporate "loopholes" claims the same goal they always claim - to soak the rich in search of "fairness," a policy that, by the way, has failed historically, every time it has been applied.
Besides, no matter how good he tries to make this all sound, in the end Obama eliminates these "loopholes" he talks about, while creating other opportunities specifically designed for his political buddies.
Earlier this week President Obama proposed reducing the corporate tax rate from 35 percent to 28 percent.
Really?
Almost sounds like a conservative move, doesn't it?
Considering that the U.S. corporate tax rate has consistently been among the highest in the world, I've got no complaint on the surface, or at least I didn't until I began to truly analyze his plan. The high corporate rate has posed as a major obstacle to American businesses, creating roadblocks when it comes to American companies competing in the global economy.
The problem is, the President's good thing of cutting corporate tax rates isn't what he claims, nor is it so good for business.
The new policy singles out specific industries he has a problem with. You know, big oil, big insurance, small aircraft manufacturers, and of course any company that has proven to not be labor union friendly. Those companies get a close of any "loophole" and despite a rate drop, their taxes go up. Yet, at the same time, his buddies get a tax rate cut to 25%.
How?
Obama's tax incentives encourage "investment in clean energy." The industries that play ball like he wants them to gets tax reform and a free pass, and those that don't play ball get slammed for refusing to do as Obama demands.
Sounds like the trappings of a dictator, doesn't it?
Obama is picking winners, and is giving breaks to those he approves of, while penalizing those he doesn't. In Britain during the time of the American Revolution, this was called "mercantilism." Mercantilism was one of the concepts we fought the Revolution over to get away from.
The liberal democrat plan to make us competitive, however, has all kinds of its own "loopholes," designed to increase taxes on the wealthier in the end, thus penalizing the producers, and ultimately making the American economy weaker.
Companies that dare go abroad with their business, because the obstacles in the U.S. have made it unreasonable to do business here, also will be hammered with punitive taxation. Corporations doing business outside the United States already are taxed by the foreign government, and then are taxed again here as they connect to their Stateside operations. Obama's plan works to tax foreign earnings even more heavily. This is his way of stopping companies from outsourcing around the world. Rather than improving the conditions here at home, to lure them back, he would rather smack them heavier for daring to go against his wishes.
What will this do?
In the end, he is worsening the problem, because the companies will then end all dealings with American consumers. They will shut down all ties to the States, and sell to the highest foreign offer. In the end, the companies take away all business done in the United States, taking away all domestic taxation, and will ultimately become foreign corporations where all of their profits will be subject to taxation everywhere but here. In the end, the revenue Obama claims this plan will create ends up lost, and in the end that revenue the federal government claims they will reap will be reduced with the loss of these corporations. And that is not even considering the negative economic impact to the U.S. when this country loses their business in the States. The impact on our financial system is devastating.
To make up for this, of course, the democrats won't see the error of the ways, and the taxes domestically will rise.
Of course, Obama isn't finished dragging America's economy to Hell at that point, either. He wants to raise corporate taxes on the Internet, too. He is proposing a tripling of the dividend tax rate, and the net effect is likely to raise the hurdle rate on business investment, which means less business investment. Less investment means labor productivity growth slows, and so wage growth slows. In other words, the President would leave American companies less competitive, and he would leave American workers with lower wages.
And Obama and friends calls this "tax reform," and claims he's doing what the republicans would do too, to lure in all approval. But it isn't "reform." What he proposes is an increase in government control, and an increase in the level of mercantilism.
The fact is that the U.S. corporate tax rate is too high. Straight cuts in taxation, and a reduction in regulations, is what will encourage growth. The federal government should pursue true corporate tax reform which includes reducing the corporate tax rate, and reducing the tax rate on small, non-corporate businesses as well. This will make U.S. companies more competitive around the world.
Enabling the growth of "individual" businesses by creating opportunity is how the American System works, and is what will bring us back from the brink. Obama's push will not only not bring us back from the brink, but will push us over the edge of the raging falls.
We need to be rowing away from the great waterfall of economic destruction, not putting an outboard engine in the water aiming us full throttle for the roar of destruction.
Obama's plan does not create growth, or a sense of fairness. It creates two classes of businesses: Those who get rewarded for playing ball with the government, and those that are punished for daring to refuse to.
-- Political Pistachio Conservative News and CommentaryObama's tax plan: Crony capitalism at its worst - Washington Examiner
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