Abolish Corporate Taxes

An oped in the Cambridge Chronicle.

Demonizing Opponents

I agree with Mr Jacoby that the demonizing of opponents has contributed to the gridlock in Congress. Unfortunately from day one, Republicans have worked relentlessly to make President Obama either a one term President or to overturn every legislative program he proposes.

There has been no hint of accommodation on the Republican side and, in the first term, the President was attacked by liberals for compromising too much (e.g., no single payer option in Obamacare).

I do take exception to Mr. Jacoby's context free comment about then-Senator Obama's vote against raising the debt limit in 2006.

At that time, the US was in the wake of President Bush's tax cuts. GDP was then at an all time high of about $12 trillion and was rising at an annual rate of 6%.  Now 7 years later GDP, after declining during the financial crisis, has risen to $16 trillion; but the rate of increase has been a sluggish 3%.

In 2006, the good times, it was a good idea to close the gap by increasing revenue rather than raising the debt limit. Today, either increasing revenue or cutting expenditures would be a very bad idea indeed.


Sent to Boston Globe

Fix the Broken Tax System.

The corporate tax system is broken, badly broken (Tax lobbyists help businesses reap windfalls. Boston Globe, March 17, 2013: A1, A8, A9).

The fix is simple: abolish the corporate tax. If many corporations are not paying it, then it does not serve as a reliable source of revenue. If many fine minds are engaged in counterproductive legal and lobbying activities to reduce taxes, a better use could be made of their talents.

The corporation tax should be replaced by a financial transaction tax. Such taxes are being introduced in Europe's financial centers so that such a tax imposed in the US would be unlikely to result in a flight of trading to foreign bourses.

A very small tax applied to the multitude of financial transactions would generate the funds to replace the lost corporate taxes and might even reduce the speculative frenzy that sometimes inflames stock and bond markets.

It is time for the US to adopt a Financial Transactions Tax (A Tax that May Change the Trading Game, Business Day, February 22, 2013: B1, B6).

The financial sector is, after all, where the money is.

I think that this tax should be a replacement for Corporate Income Taxes which can be avoided by careful transfer pricing games.


Sent to New York Times

Tax Expenditures

Mr. Jacoby is absolutely correct (A guaranteed flop for Massachusetts. Boston Globe, February 6th. 2013).

Giving tax breaks to big business (like Theatrical Producers, Movie Makers, Insurance Companies, etc.) to encourage them to locate in a given area is a beggar-thy-neighbor proposition. Often, as in New London, CT, the jobs never materialize, or they last only a short time as in Devens, MA and Providence, RI.

Some years back, the legislature passed an inter-state compact (National Popular Vote) to bypass the Electoral College to ensure that the President is elected by all the people. We urgently need an inter-state, inter-city, inter-town compact that will disallow these ridiculous handouts to the wealthy top managers of corporations seeking tax breaks.

Where do you think that $4m or $10m or $20m tax rebate will go: right into the pockets of the CEO and top management through their profit related bonuses.

It is past time to say "No" to the corporate welfare bums (Quote from former Canadian New Democratic Party leader, David Lewis).


Sent to Boston Globe

Mr Pratt needs a new accountant if he believes that George Bush's tax
cuts had any impact on his ability to invest in his company or hire
new employees.

Money reinvested or used to hire people comes from pre-tax income. It
would be included as an expense and would be deducted from income
before the resulting profits were taxed. So the reduction in tax rates
would be irrelevant.

His letter is incorrect. The Globe did us all a disservice by not
requiring careful fact checking before clearing it for publication.



Sent to Boston Globe

The Supercommittee: Jockeying

So there is jockeying around who is to be appointed to the deficit reduction committee (Republicans and Democrats begin Jockeying Anew in Next Phase of Budget Fight. New York Times, August 4, 2011: A1, A14).

We know that many Republican legislators have taken Grover Norquist's No Tax Increase pledge. This should automatically disqualify them from serving on the supercommittee.

For the sake of the Nation, I would hope that all members of the Committee would sign a pledge that between now and the end of November they will not meet with, talk with, read e-mails and text messages from, or receive legislative suggestions from lobbyists.

Sent to New York Times

Gifts to Government

Published: Toronto Star, page B4

Hearing the suggestion that the gift of a swimming pool to the Prime Minister had been ruled to be a gift to the crown and hence was tax deductible aroused a fantasy in my mind as to how the Government of Canada might become more responsive to the people. I must admit that this fantasy arose from my misunderstanding of the news item — I thought that the gift was to be in lieu of taxes rather than merely a deduction from income.
Anyway, I thought "Why Not?" Let gifts to the government be acceptable in lieu of taxes. That way one could support the government services each of us thought useful.
Instead of just a minute fraction of my own tax dollar going to social services for example, I could, by donating a gift to the appropriate department, make sure that my whole tax dollar went to the services that I wanted. In this way each of us could support the services he or she wanted.
All the retired colonels who crave for a military presence in the Arctic could club together and pool their tax-gift to raise a regiment for the defence department. Those who cry for law and order could earmark their gifts for the RCMP; others could specify their gift as support far the unemployed.
This has a glorious. anarchic ring to it — everyone paying for his own thing. My own guess is that under such a system there would be little actual change in the budgetary allocation — there is enough diversity of interest in the country.
There would of course be no reduction in the total sum received by the government. The difference would be that we might be more satisfied with paying our taxes; we would be paying for things that we wanted the government to provide rather than for things government wanted us to have.
Still, government would never permit such anarchy. Maybe they could keep some control by limiting the proportion of tax payment we could earmark in this way or by offering us bargains—when a department was failing to meet its budget and the government wished to maintain that budget then they might offer a $1.10 tax credit for each gift of $1 to that department.
This system, of course, provides a strong incentive for the government to perform In terms of its programs: those that are successful will continue to draw gift support, those that fail will not.
Just maybe, the government should give anarchy a try.
Griffith Evans is a Toronto Teacher