Governor Palin's Tax Plan: Simply Genius
September 5, 2011 | MinnMike
Posted on Monday, September 05, 2011 10:03:01 PM by MN_Mike
It's been a long while since I posted at FR, so bear with me please. There has not been sufficient discussion about Governor Palin's superb tax policy she announced in Iowa this past weekend. So, before the other campaigns try to co-opt it, I think it's necessary to put our pro-Palin stake in the ground.
Current Situation -
As we are all well aware, the high unemployment is plainly nasty and long-standing. Much as President Obama would like any of several of his targets to take the blame for the economic fix we are in, it is his name that will be on the 2012 presidential ballot.
We have major problems with our current tax system, and Governor Palin provided a practical solution for the corporate tax mess. Let's start out by restating the fact that at 34% our corporate tax rate is the highest in the developed world. And, as the Governor pointed out, unseemly politicians manipulate the tax system to provide loopholes for their corporate friends at the disadvantage of all other competitors and the absence of a free market system.
The corporate tax system at 34% results in some seriously adverse outcomes. Today, corporations with foreign subsidiaries are unwilling to consolidate their profits and investment dollars back into the US parent because it will incur a 34% tax just as if it was earned in the US to begin with. As a result, you too frequently read headlines that read that a US based corporation is laying off workers in the US while hiring at their foreign subsidiaries.
The Palin Tax Plan -
The Palin Plan eliminates corporate taxes and (obviously) tax loopholes. Let's talk first about the absence of loopholes.
Tax loopholes have been the way for politicians to pick winners and losers, where donor corporations just so happen to receive loopholes. Meanwhile, corporations who donate to the opposition or make no donations receive no loopholes and are therefore at a competitive disadvantage. It's corporate welfare, corporate cronyism, and "pay for play' all at once.
The removal of loopholes eliminates the prospect of "pay for play" because it is the free market, not the crony politician who sets the rules, who determines winners from losers.
As for the elimination of corporate taxes, this would level the playing field and bring the money earned at foreign subsidiaries back to the US parent. Why is this important? Because investments are made where the money resides. In essence, this become a stimulus plan not by and for the government but for the private sector, the job creators.
As such, businesses will invest in their expansion in the US instead of at foreign subsidiaries. With expansion comes the creation of many new jobs. The economy is unleashed and new jobs means new tax payers.
