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Milton J. Madison - An American Refugee Now Living in China, Where Liberty is Ascending

Federalism, Free Markets and the Liberty To Let One's Mind Wander. I Am Very Worried About the Fate of Liberty in the USA, Where Government is Taking people's Lives ____________________________________________________________________________________________ "Extremism in defense of liberty is no vice. Tolerance in the face of tyranny is no virtue." -Barry Goldwater-

Wednesday, March 18, 2009

Insideous corporate income taxes......

US corporate taxes, among the highest in the developed world, moves marginal investment capital offshore to other jurisdictions where taxes are lower. For example, lets say that a Swiss investor wants to invest in some new technology, process or good. Would you choose to set-up in the US or some other country that offers lower taxes. No, that is not what drives the decision since other factors all go into the the decision, however, IT dOES affect the decision. The lowest tax jurisdiction does not get 100% of all investment capital but having the highest corporate income taxes does negatively impact investment and productivity decisions....
Simulation results show that repealing the corpo­rate income tax alone, which would cost approxi­mately $300 billion in annual tax revenue, would produce by 2012:
* 2 million more jobs than the baseline scenario;
* $280 billion more in real GDP);
* $4,000 more in real disposable income for a fam­ily of four;
* $707 billion more in household net wealth—the base of economic strength and stability.

The Obamessiah, one that wants to take all of your income and redistribute according to his values and wishes, is not one that will make the US nation competitive from a tax perspective. In fact, I suspect that he will heap all kinds of new taxes on businesses and productive enterprises and this will promise that less investment capital will be deployed to the US than otherwise would be the case. So we get less long-term investment capital from external investors and we also get the government taxing capital generated by businesses and then deployed into the 'golden calf's' investment agenda. Also, some try to argue that the US dollar is improving but I warn to not confuse short-term capital movements with long-term investment, they are very different and those funds that move in quickly can also leave very quickly.


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