Will cutting corporate taxes cut unemployment rate?
The 'Bulls & Bears' sound off
- Duration 8:40
- Date Jan 14, 2012
The 'Bulls & Bears' sound off
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One week from now they'll be voting in South Carolina and without will be right here -- at this time covering it but last night.
Rain and think what could be a more deciding vote downgrading this new European nations including France Italy Spain Austria and Portugal.
US stocks and banks feeling the pain Friday.
Will US jobs being next hire you want I'm Brenda -- this is Bulls and Bears let's give.
They do it.
Bulls and Bears as we Gary Smith Tobin Smith Jonas Max Ferris along with -- and -- -- and Christian Dorsey welcome back everybody.
Tell me you say we need to do something right now to stave off this threat -- -- three.
-- -- cut corporate taxes we have every one of these Republican candidates are agreed on one thing cut corporate tax bullet just don't see the history books look at my old country Ireland.
We there it in 198415%.
-- went -- -- flat rate 15% vs the Euro what 3035%.
They grew their economy four times faster they're GDP kicked.
But for 2223.
Years we've seen it in every other country that have done this Estonia -- -- off it's time to do it now and let's get ahead -- this thing is that we don't.
We are going to have some real job -- here because Europe is going to be negative for the next six month.
And in fact we have the second highest corporate tax rate in the world second only to Japan Christian is that the way to -- By its it will give it if all -- interested in is increasing corporate profits short cut the tax -- -- really interested in.
-- hot doll sometimes you need to do a lot more.
You know the reason that you know businesses are not hiring right now has less to do with the -- tax rate but more to do with the lack of aggregate demand out there in the economy.
-- -- if you increase -- profits by cutting taxes you're still not creating a market for those goods and services that's the real.
Key issue and you know what's going on in Europe right now has been placed in.
And factored into while markets for the last six months so this is not a surprise all what we really need to do -- -- increase employment at home.
Is to what to improve the employment situation by getting more people back to work and seeing their wages rising again.
Okay carried me -- Well the first the law I thought Toby some kind of Scotland and not Ireland last week -- was Scotland but you've got that that notwithstanding.
-- -- -- -- I was standing and I I appreciate I appreciate Christian -- throwing the liberal line but it just doesn't back up what the -- one.
You mentioned Brenda that we have amongst the highs and not the highest.
Corporate tax rate of all the countries we lowered -- to 25%.
Local what happened -- -- you know brought up some examples of overseas but.
Joint task force and -- congress studied the whole issue what do they find they found that when no less a person that president Kennedy.
Lower tax rates across the board what happened employment went up and -- Other news -- -- also.
The same thing happened under -- President Reagan's tax cuts employment unemployment backdrop from ten -- 06%.
-- Honors went up so case by case you'd have a hard time.
In fact arguing the other side -- lowering.
Taxes both individual and corporate doesn't lead.
To higher employment and higher revenues I don't see why why we don't know what it makes perfect sense well there are a lot of different tax rates and Jonas does lowering the corporate tax rate helped start -- which do -- a lot of hiring.
No because when you start a business you're not going to be paying a very high corporate tax rate for the first -- the second -- for several years so it's I don't wanna say it's punishing success but it gives an edge to the start up.
Now -- look -- for low corporate tax -- -- it would invest money is investing for profits and you want taxes low -- corporate tax rate.
Is actually pretty -- he does for all the deductions the top 200 companies pay an average rate of like 1819% they don't pay just 35% -- we have more reductions -- other country now does that mean we shouldn't get to the deductions number low rate of course we should but if -- -- -- jobs and you compared to -- the payroll tax cut.
That is a cost that all employers have to pay your starting a business every single person you are you've got to pay this payroll tax rate.
I know when I've sort of been out of rather -- a higher corporate tax rate -- lower payroll right below what a pain in the corporate -- wasn't making any money.
But I had to pay for those employees but when I was -- start up to you want to lead -- hiring lower the cost of hiring which is the payroll tax for the companies -- not even decide that the employer that the -- worker pays.
If you had to choose between the -- Million you know you're also a business owner what do you prefer.
I don't I -- if if it was that easy that there was one solution in this problem would go away we'd already be doing at the reality is it's not just the corporate taxes.
Small business owners which is a hundred million in last have said.
Over and over again these beings.
-- really is what we actually need in order to be able to put in start hiring people so yes.
This is one issue that we actually need because you -- -- weekend which is it just too high.
-- we talk about the deductions I hear you but that is only for the big companies for small business owners we don't get those deductions and we need a lower rate but we also need.
The payroll tax we also need access to funding we also need the EPA a lot of these other people -- -- -- complete Havoc on our trucking industry.
The that the price of diesel going back and -- but consider everything needs to get.
But -- on it is the only one with multiple just a moment -- -- is the one.
Saying that all the GOP candidates in South Carolina agree upon that we should have a cut in the corporate tax rate.
Tobin if it is it the one thing.
We agree that there maybe you know.
Add a whole panoply of things that that could help but is -- one thing that that might help.
Less well it isn't you combine it with the other side of what's was work is that the cut corporations when they make a profit overseas are allowed to bring that profit back the United States again why is Google.
Run all their business out of Ireland because other European business gets taxed at 15% back at that income.
This stays there it gets invested Derek doesn't -- here if you combine.
They're not saying it's a 50% flat deal and you allow American corporations the large 500 guys who believe it or not.
Are responsible for 40% of the hiring United States in and a big way for high paying jobs.
You'll see the double combination of -- of the huge trillions of dollars we patriot -- state investments made the United States.
In that lower rate means by the way -- probably have a -- 151000 by the time they've got the which increases the -- increases.
Christian am so you've you've heard the -- this side you you think that lowering the corporate tax rate would be a mistake.
Well you know it's not it's not a mistake and in the sense that it shouldn't be done I agree with -- onus that the corporate tax rate there is room to lower provided that you.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Lowering the corporate tax rate as the -- for employment situation is just disingenuous.
The real issue.
You know we're gonna disagree about many of the things that were discussed but the real issue is that we don't have suitable enough demand and until you get that issue.
You're really not going to improve our employment good.
Said yeah yeah -- other screens that we received a report if if this is disingenuous and then what -- the point five -- -- growth and what about the thirty years of growth and unaccountable puppet told congress that in its -- Carol -- I rarely happens to be the poster child for the first European clouds will not forget that they're getting all the banks for the governor had taken over is a disaster and a critic -- -- -- model of six does he wanna -- So ideally -- say look at these kind of felt.
If what if tomorrow we lowered our corporate tax rate in didn't get rid of the deductions -- -- a net loss to the revenue the IRS.
We would -- -- rating cut again in addition the -- we just had last year because.
We have a problem these kind of a problem not be able to pay their bills and you can just wholesale cut taxes without removing deductions from the equation.
And taking even less money that's the only thing we've got going over -- Europe right now until we're a little more likely to -- people but the most.
To Europe right about what it'll tell you is making money more fluidity Toby is a 100% -- -- As a business owner it would make money more fluid to be able to actually bring it back again.
And in bringing back -- we can actually then be able to reinvest it so when people complain that there's so much money overseas -- true the rich and the reason why is because that I'd rather.
Hold little over there are at a lower rate -- bring it back or get smacked with it okay.