Saw this today over on Hot Air, and being the econ geek that I am I decided that I would throw my two cents into it.
The Tax Foundation ranked all 34 countries in the Oganization for Economic Cooperation and Development (OECD) and found very unsurpisingly that the U.S. tax system sucked. How badly does it suck you might ask? Well it turns out that we only were slightly better than the economic powerhouses that are France and Portugal. Such bastions of economic growth as Mexico and Greece kicked our ass.
We may have lost out on winning the title of worst possible tax system, but we did win (lose?) the title to highest corporate tax rate. You know that when you can’t get past the first page without being kicked in the teeth things aren’t going to get much better.
The largest factors behind the United States’ score are that the U.S. has the highest
corporate tax rate in the developed world and that it is one of the six remaining countries in the OECD with a worldwide system of taxation.
That’s right ladies and gentlemen, we have the highest tax rate in the world on corporations. Adding insult to injury the U.S. treats any money made anywhere in the world as if it were made here and taxes that too.
Those of you who hate what Burger King and others are doing, are you starting to get the picture as to why yet?
Face it we have allowed our governement to destroy our markets by continually extorting more and more from the very entities that grow and create our market. If corporations of all sizes didn’t exist, we would have no market. Sure your local town may have a market, but tell me, if Wal-Mart and Clorox didn’t exist where are you putting your money so it will work for you?
To add to that burden companies spend gobs of money simply complying with the tax code or lobbying to attempt to get it more favorable to them and crowd out competitors (crony capitalism anyone?).
For instance, the deadweight losses in the United States attributed to tax compliance and lobbying were estimated to be between $215 and $987 billion in 2012. These expenditures for lobbying, along with compliance, have been shown to reduce economic growth by crowding out potential economic activity.
I’m sure that throwing anywhere from a quarter to amost a full trillion dollars down the drain to comply with this crap, while attempting to curry favor, didn’t hurt the economy at all in any way though.
Oh but relax young peasant, the government won’t let you get off any easier. See on top of the State, county, city, and every other tax thrown at you the U.S. has the most backward useless regressive tax code of destruction with a high point of 46.3%. Yup that will entise you to become successful right? Knowing that almost half of your money goes to good ol’ Uncle Sam and his legion of bureaucrats just waiting to properly dispense with your money, never wasting a cent of course.
Taxes as we often say here are simply extortion. They are paid at the point of gun, through threat of force and penalty. If I did that to you personally I would be in jail. Yet we continually allow our government to do it to us. Then have the audacity to be pissed off when a company figures out a way to pay a smaller extortion bill.
Taxes much like extortion can only be as high as someone is willing to pay. Once the penalty becomes more enticing than the payment, the payment will stop. Since inversion is a legal way to get out from under the thumb of the worst tax system ever created, we at The Handbook say good on you. Keep doing it. Make it hurt.
Until such time that the lesson is painful enough to break through, they will continue to attempt to take more and more of your money. Never allow them to tell you that a tax break ALLOWS you to keep more of your money. Call them on it. Make sure it is known that taxes steal from you, and from our economy, and we ALLOW them to have a portion of OUR rightful earnings.
Just so everyone is clear, no I don’t believe money made through stocks, investments, gambling, or anything other than your actual JOB should ever be allowed to be taxed.
Oh one thing I missed before. Every OECD country minus 3 have reduced their corporate tax rate since 2000. Guess which group the U.S. falls into?
But our consumption tax rate is 4th best, so there’s something right? Damn we are dumb sometimes.