US set to have world's highest corporate tax rate
Japan drops its rate
- Duration 8:55
- Date Mar 31, 2012
Japan drops its rate
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No jokes about this April Fool's Day has come tomorrow the US will have the highest corporate tax rate on the -- After Japan lowers its rate.
And someone hearsay and that's no laughing matter for American workers hi everyone I'm -- got here that -- Bulls and Bears let's get wry humor.
The Bulls and Bears -- week Gary B Smith Tobin Smith Jonas Max Ferris.
Along with John to back out and -- members are welcome everybody okay -- be the highest combined corporate tax rate in the world that lead to higher unemployment.
World soon be a number one -- unemployment Brenda if the trend continues look if anyone says that higher corporate tax rates don't.
Affect unemployment they've never worked in business at all.
Here's what happens then we -- Barbara sickness corporate tax rates remain high.
What are companies doing in this day -- thought.
Mobility -- outsourcing.
Their relocated to foreign countries -- expanding even faster in foreign countries and they would overhear their hiring.
Less people because a higher corporate tax rate.
Goes right to retained earnings they have less money.
To hire people.
If you don't believe it just look what's happening with the state -- that we've seen states that have lower tax rates are attracting business we talked about this last week as a matter of fact.
It's Indiana I believe that had lower tax -- was attracting business.
For other states with higher corporate tax rates in fact the issue has been studied a few years ago the bipartisan I point out joint committee on taxation.
Said that the number one way.
To let's see increase growth in the economy lower the corporate tax rate we're not doing that we need to.
Well John -- -- though -- if you add in all the deductions all that we're actually pretty fair when it comes were were right about average when it comes.
More like sixty apple because our companies you -- -- that we don't have much for example in a value added tax across most of Europe so.
-- their governments take tax along the way by adding -- taxes different levels of sales taxes all the -- we just flopping on of the corporation now.
I don't think our system's bad the problem is is other countries -- are -- it ours has been staying the same -- like the eighties and they keep knocking down this week in Japan I believe was the latest to go down so we don't we almost have to go along because you -- you have no choice these companies will fly around and move during somewhere else beat Google in a lot of tech companies are running nonprofit student.
Fire Lyndon -- 2% tax rates so.
-- -- -- choice but I I will say having taxes higher somewhere else in the pipeline isn't great for jobs either necessarily -- points are true.
Except we don't we can't lower the rate to zero is does good for jobs have been raised the income tax higher there's -- as high as other countries because it's also bad for jobs.
Since tell me.
Yes he did -- now let's take real life in real life and 84.
Republican island had had lost jobs for look literally fifty or hundred years.
And they took the corporate rate from 35 or 30% down to 15%.
At the same time NORTHERN IRELAND did not.
And port 24 years they had an expansion in Ireland twice the rate of Europe.
Three times the rate of NORTHERN IRELAND I mean.
Up we've seen it real lives of anybody's gonna argue against -- I gotta say.
Write him Caracol evidence shows it makes a difference and if we lowered to 15% in the states.
The growth we would get one more than make up for whatever this quote unquote cut was because you really get -- -- -- lieu of raises you get higher revenues and you get a higher income to the employees because it would be paid more.
-- -- David though if you look at the country that has has lowered it's tax rate the most over the last ten years it's in Greece.
And I don't think we.
Not addressing the revenue side that's for sure.
To maintain there there's citizenry and their social welfare.
But that said I don't think much changes with the nominal rate going down.
We are all on consensus.
Whether it's Republicans or Democrats it's gonna come down 2528.
That's a target.
But I think what we have to address of the loop holes.
That are incentivizing.
Industries for instance a gas well oil companies that don't need it was all time profits when we should be spurring on our manufacturing.
Where we've seen job growth -- 435000.
Over the last couple years.
Okay John take that -- Now I I feel like I he would Jonas is coming from and he's talking about an effective rate went loopholes and stuff that's lower.
Toby took about real -- whatsoever about real life on the small business owner when you look at the loose money policy that we've had in the in the US over the last couple years.
You look at the deficit the state -- facing.
Small business is not only faced with a higher effective rate.
It's not even 39% of you stop the factor in municipal taxes told hiked fuel -- -- energy tax sites.
All going down to the small business I think are effective rate is close and a fifty.
And there's no doubt about it from my perspective would without some certainty that these corporate -- -- are going -- I think look out.
To the unemployed because is -- some big problems ahead for them and -- me.
That is that is true for this the smaller business but -- larger businesses there really are deductions.
Well -- -- a bit -- there are there are deductions but to David's point.
He talks about loopholes as if -- you know some the evil corporation's common there.
And create these loopholes let's look at all the loopholes the government has created.
What about the fact that General Motors pays no income tax what about the loopholes that the -- that the agricultural.
Industry gets what about the loopholes that everyone other than the oil companies don't get like all the Green.
The Green energy companies so there's a lot of loopholes out there I think everyone's.
All perhaps creating a play a level playing field let's take it level all throughout fell.
I -- also Gary I commit if it did the the court quote loophole is always -- through the oil and gas companies.
Are taking the same with the police since ten to depreciation expense that every other company it's not like they created it for the oil and gas industry.
But we -- investments in manufacturing companies we take depreciation we take the police and on resources we're all business we have other you know there's there's some don't they'll throw this thing up that somehow their oil industry got some special -- -- that's just not true everybody -- century.
Well Jonas is the issue I have.
I'm just so complicated.
Or is is the issue that it's too high.
I think the issue is becoming that that it's getting easier and easier to avoid it to the point where it's hurting the government's revenues is not that it is so high when you factor and all -- the taxes compared with other countries like for example -- for most employees at a -- -- today.
Pay much lower income tax been injured Europe in Germany and Japan especially.
Knowing other oil -- -- Norway and stuff these guys these are -- that he was an income tax rate but what is we can pay our workers last because they don't pay as much of their income to tax.
If we lower the corporate tax rate to zero hypothetically.
But then -- say sales tax and income tax rates to other country levels.
-- -- or comport employers got to pay more because you work for an after tax wage so.
It's it's not wonderful have to white and we look in -- -- lower the rate they'll hire more people but in fact it's not always that way we -- to get really revenue somewhere you work the point that all the countries that lower their taxes too much are having problems here raising money to hatred URL to another wrong eventually though it.
We we we we have an unemployment problem we don't we don't have a tax problem yet if you go back through history and look at some of the great presidents that -- corporate tax cut is like Kennedy like Reagan might even Bill Clinton.
They all enjoyed.
Vast improvement in the employment numbers -- history definitely proves that fact wrong.
And what we need now is some certainty more than anything so that employers will start employing.
Well also looks aren't really.
The problem isn't apparent outbreak -- all -- -- attacks on success let's hypothetically say you've edited zero.
And you raise the tax somewhere else than a startup company which doesn't even pay actually lot of corporate tax to they're not profitable yet.
It is -- have a higher cost selling stuff with a -- tax let's say are higher in contact source any contacts.
Yeah actually rather from the start appointed maybe this what America has the best start -- infrastructure the best entrepreneurship.
There is no penalty on starting up it's -- successful businesses that already have profits.
No -- week's federal one story making during those -- about example.
But the point is maybe we have a better system that allowed its citizens don't have the start up infrastructure that we do because our tax that is more started favorable.
Let me get the last word to take Gary -- -- -- Well I let let's go back to the high level Brenda we are not we are not competitive with any.
Modern organized country in the world -- tax rates we need to lower it just to be competitive we shouldn't be number one or number two we should be somewhere in the middle of the pack.
If we went to the getting an athletic programs that -- here at.
Apple FaceBook Google literal about it here it's such a bad tax rate system down as I'm sorry we gotta go I think we're at high at spring break you must think the only one down there and I am.