Radical Tax Reform (Part 1): Corporate and Business Taxes

Okay, let's break this down, because honestly it's really not all that complicated.  We all know that this country needs a radical overhaul of our close to 70,000 page tax code which covers everything from personal income tax to corporate and business taxes and even how much of your estate that you have to hand over to the government (instead of passing it on to your family) after you are dead.

Let's start by breaking down the most important part of our economy and how our tax system affects them; Corporate and the Business taxes.

It really torques my chain when people start talking about the Big, Bad, Evil and Greedy corporations and businesses (you know...the ones who employ you, give you your paychecks and help you put food on your table and pay your rent/mortgages...) who's primary goal in life is to make as much money as they can so that they can give the fat cat CEO's millions of dollars, becoming filthy rich and having dinner of caviar and champagne on their yachts and corporate jets.  HELLO?!  That's the whole point, isn't it?  And another thing, have you ever heard of a POOR person being able to employ another person.  Obviously the answer is no.  It is the rich business owner who has the ability to employ other people.

But I digress . . . we were talking about taxes, weren't we?

So what are the effects of taxes on corporations and businesses.  If you listen to our politicians in charge today (aka the ones on the left), they will tell you that the rich corporate fat cats and business owners have to pay their fair share and they need higher taxes.  Well, let's say we DO tax the corporations and small businesses (who might be individuals making over $250,000); what will happen then?  Let's break it down:

MORE TAXES=

1. Less money for the Corporation and the Business Owner.
2. Fewer dollars to employ people.
3. Fewer jobs and possible layoffs.
4. Higher unemployment.
5. Fewer benefits or a reduction/elimination of benefits.
6. Higher prices of goods and services passed on to the consumers (who now have no jobs), because the business has to try to make up the money somehow.
7. Corporations moving overseas to avoid the higher taxes and taking their money and jobs with them.
8. Corporations shipping jobs overseas because of cheaper labor and to avoid payroll taxes.
9. Hundreds of Billions of dollars moving out of this country looking to avoid the tax burden.

Sounds like a great idea, huh?  Well, now that we know what some of the consequences to higher taxes to corporations and businesses are, I would like to throw out a HUGE "WHAT IF" scenario.

"WHAT IF . . . we ELIMINATED all Corporate, Business and Payroll taxes?  What do you think would happen?  Let's take a look:  

No Corporate, Business and Payroll taxes =

1. More money for Corporations and Business Owners.
2. Businesses will have more money to hire people and expand their business.
3. Businesses will have more money for benefits to entice high quality candidates to work for them.
4. A major drop in unemployment.
5. Through basic principals of economics:  prices of goods and services will DROP because the cost of production will be less and competition will force the price to go lower.
6. Corporations that have gone offshore to avoid the tax ramifications WILL ALL COME BACK!
7. Foreign Corporations will ALL want to move their businesses to the United States, thus providing MORE jobs for the American worker.
8. Wages will go UP because competition for jobs and low unemployment will force companies to offer more money in order to get the BEST candidates.
9. Billions of dollars will come flooding back into the United States.

Now I know what you are thinking, "Oh my God!  We can't do that.  We need those tax dollars to help pay for Social Security, Medicare and all the other government programs that are being shoved down our throats!" 

Well, yes we can (no pun intended).  We can radically reform our tax code, simplify it and still have plenty of money to fund all of these wasteful government programs.  I don't want to spoil the surprise though and will leave that for a further blog posting.  Next time I'll throw out another "WHAT IF" scenario with some pro's and con's.