America doesn’t want You, and neither does Delaware
Jul 8th, 2009 by Timothy Pancoast
That’s right America’s government doesn’t want you, it just wants your money. That’s okay though because there is still Canada. Delaware received a brief dishonorable mention as part of a larger, national problem on the Rush Limbaugh show today from guest host Mark Belling. He noted that Tim Horton’s Coffee, a Delaware registered corporation will be leaving the state to register up in Canada due to favorable tax conditions. While our nation and state are scheduling tax and fee hikes, Canada is working on lowering its corporate taxes. Canada’s already lower business taxes will soon be less than half of what business taxes are in the US.
A government that is raising its tax rates on you or your corporation is basically saying that it is interested, not in your personal skills and interests, but in your money. It could care less what you are capable of doing for yourself, or what you would have done for others with the money it is taking. It doesn’t matter that we could solve the problems that we are faced with now if we were aloud to. The government wants to take our money and it will try to deal with those problems itself. Unfortunately, a cause of a problem is rarely the solution.
Canada’s government has tried taking money and control away from its productive businesses and citizens. It thought it could do a better job taking care of the people than the people could do themselves. There were enough drawbacks to that approach that Canada is starting to reverse course. Now Canada wants you, and it wants your business. Canada seems to have regained some of its trust in private citizens and private enterprise when its old policies brought the government face to face with its own flaws. Their government has decided that the people and businesses are going to be the solution to its problems. Now it is beginning to make overtures to invite business back and I wish the Canadians well.
America isn’t learning the lesson that Canada learned. The way our government has operated made it a major contributor to the current financial mess. Rather than give money and control back to its citizens and businesses in the form of tax cuts, our government is trying to grab more money and control from us through policies like Cap and Trade nationally, and raising a myriad of taxes and fees on the state level. Washington D.C. has problems and it wants to own those problems. It isn’t letting go, but it will pay for them with our money. These policies show the lack of trust that our national and state governments have in the people. Sometimes that lack of trust is justified, but I must ask where has our government shown itself to be more trustworthy than the people and businesses that it wants to regulate, tax, take over, and/or shut down?
Hello.
I would like to put a link to your site on my blog roll if you want to do the same for mine. It would be a good way to build up both of our readerships.
thank you.
Corporate franchise taxes are like found money for a state. The corporations do not require much in the way of state services (other than the administrative costs of Chancery Court) nor a great deal of infrastructure. There may be a small headquarters or a resident agent (who does pay income taxes) so anything paid in taxes is a windfall for the state and the resident taxpayers.
There are a lot of practitioners of the politics of envy and closet socialists who think that profits are inherently evil and they would like to squeeze a few more golden eggs out of that special goose.
Perhaps we really do not always elect the brightest and the best.
I actually agree with the argument that corporate taxes are a drag on businesses. Not only that, since corporate taxes are paid only on profit, they create incentives for schemes to cook the books, which ultimately distorts markets and increases prices for everybody.
That is why I think corporate taxes should be eliminated and replaced with progressive taxes on individuals.
So I am pleased that you have recognized Canada as a policy role model for the US, with its single-payer health care system, and its progressive income tax brackets, which with Federal and provincial taxes combined, tops out at a combined marginal rate of up to 46% for the upper brackets.
I recognized a single Canadian policy as a model which America and Delaware would do well to follow. Though Canada may be implementing more possitive changes in the future. Thank you for your attempt to bring health care into it, but sorry, no. Canadians still recognize the bennefits of our health care system.
I think it is very unfortunate that Delaware seems to be loosing its status as a corporate friendly environment. We are going to continue to loose more corporations in the process, and more burden will be placed on the remaining businesses and citizens.
The solution is to let the people and businesses of Delaware and of America dig our nation out of this mess. We the People are the ones who ultimatly do it anyways.
When Kublai Khan ruled China, the grandson of Ghengis engaged in a bit of tax reform by imposing a flat income tax. China prospered.
How “progressive” should a tax rate be? How high can marginal rates go? Ours once topped 90%. Sweden once went to 101%.
Is this a means of raising revenue or a form of income redistribution?
Note who pushed for the first serious drop in marginal tax rates. It was JFK.
The politics of envy always appeals to the losers of the world…Also to those who have theirs (often as a result of inherited money sheltered offshore).
Timothy:
The point was that Canada’s higher taxes and health care system is what enables them to cut corporate taxes. So if you want to emulate their corporate tax cuts you need to make up the revenue somwhere else, as Canada has done.
And, I forgot to mention, as far as I can tell Canada treats investment income as regular income (exempting 50% though).
Art:
All the US flat tax proposals are essentially the “No Tax For Steve Forbes Act.”
Show me a flat tax proposal that imposes the same tax on wages as well as investment income, and also funds Social Security and Medicare/Medicaid out of the flat tax.
The Bush-43 tax policy has assisted in redistributing wealth upwards, so please do not lecture us on redistribution of wealth. We need tax policies that redistribute wealth back toward the middle. Reasonably progressive income tax policy will do just that!
I agree with noman on taxing corporate profits, although I do think a modest tax is justified to pay their share for the services and infrastructure that we provide for their conduct of business.
And Timothy, you seem not to understand the impact of deregulation and laissez faire policies on the severe economic downturn we are experiencing, as you seem to be calling for a continuation of the same policies. That makes no sense at all!
And of course, rapidly escalating health care costs, and education costs, will be a continuing drag on our economy both short and long term. Most Canadians are happy with their healthcare system; just think, we might be able to learn something from them and others who provide affordable access to quality healthcare for all their citizens. We have yet to do so! Why?
My point is that a government that raises a tax tells people and businesses, “we don’t want you. We just want your money and with that we will take care of things.” A government that lowers or eliminates a tax is telling people and businesses, “we want you. You can help solve our problems. We think you can help us out, and your presence here will make this a better place.”
I am not going to address health care here, but I may create a new post for that. I am sure there are things we can learn from every health care system. Each one does at least a few things right.
However, there is more than one way to justify and afford a reduction in corporate taxation. One way is for government to step back and acknowledge that the businesses and people themselves can help solve the problems the government faces, not just their money. Every problem that is fixed by private citizens and businesses is a problem the government no longer needs tax dollars to solve.
If we had deregulation and laissez faire policies, we would be better off. The problems we have came out of the government not from a lack of government.
Perry, could you elaborate upon what I don’t understand about deregulation? Perhaps I was overlooking something in writing that post that gave off the wrong impression. I for one do not concider regulation to be a dirty word. There are several regulations concerning employment, safety, and so on that I totaly support. Many of the regualtory issues that I have aren’t with overregulation so much as the wrong regulation. For example with Cap and Trade, since the science is unsettled and the actual effectivness of the measure is questionable, my suggestion would be to regulate carbon emmissions, if at al, through incentives rather than penalties.
I agree that rising health and education costs are a major problem. I think we should look at what is causing those costs to rise. We shouldn’t implement elaborate programs to solve those problems until we have a comprehensive picture of what is causing the dramatic increases in cost that seem to be out pacing the rest of the economy.
The real answer; cut government.
TP: “Perry, could you elaborate upon what I don’t understand about deregulation?”
Timothy, you don’t seem to understand the origins on Wall Street of the toxic assets that have set off the downward economic spiral in which we find ourselves. With proper government oversight and regulation, this would not have happened, or at least it would have been lessened.
On taxes, you Republicans don’t seem to realize that you have an obligation to the people to provide an orderly societal framework based on the law. With your idea of ultra-limited government, we would continue the chaos that we now experience. Taxes are used to provide the needed protection within the law. This is not to say that government revenues can also be poorly handled, so an observant citizenry can play the watchdog role to guard against this possible abuse of public monies.
You mean the regulation which required banks to give loans to people who either could never pay them back or were unlikely to pay them back in a reasonable amount of time, thus forcing them to get creative and make up new financial vehicles in order to cope with this new toxic debt that they had no choice but to accept. Oh I wish the government had regulated the creation of mortgage backed securities and other toxic debt vehicles better. If they had it would have required them to acknowledge that their regulations and policies requiring mortgage lenders to give loans to people who couldn’t afford them were screwed up. They still won’t do it.
I think anyone with a job that is working as hard as they can should be able to apply for and achieve a mortgage. If they aren’t able to get a job, or can’t work, then their is other assistance designed to help with that. However, just because every gainfully employed person should be able to take out a mortgage does not mean that they should be able to get one for a 4 bedroom 3 and 1/2 bath house with a pool out back. If they can’t afford it, then they shouldn’t be given it. Instead they should be given a mortgage for what they can afford.
Mortgage lenders were regulated into a bad situation. When they came up with solutions to stay afloat that were just as bad or worse the government didn’t regulate them because they couldn’t, without taking a long hard look at the policies which caused the situation. That is the way I view this situation.
Perry, on taxes what we as Americans forget is that we the people have that obligation to create the societal framework and the laws. That is how this nation started, of the people, by the people, and for the people. Not of the taxes, by the taxes, and for the taxes. Most Republicans and Conservatives know that we can’t get rid of all taxes. However, they know we should take back a lot of them, a long with a lot of the responsibility for our own lives and the world around us. They want to at least get closer to the Constitutional government we started with. You can argue that is a bad thing but I think our founders did pretty well with it and I think we could too.
You mean the regulation which required banks to give loans to people who either could never pay them back or were unlikely to pay them back in a reasonable amount of time
Link please, to some regulation that has those requirements as you stated.
TP, did you voice objection to the Bush tax cuts that favored the higher income folks?
Noman, I’ll get back to you with a link or so after I finish working with a client. Sorry I don’t have time to pull together that information right now.
Perry, I did not object to the Bush tax cuts. Also I believe that they were beneficial to more than just the higher income people. Perhaps if I had the job I would have cut taxes differently, but I was okay with that part of what the President did and DID NOT protest it.
I assume your argument is that I support the Bush policy because I didn’t object to his tax cuts. I would like to point out that President Bush’s policy was more than just tax cuts. While Republicans like to lable Democrats as “Tax and Spend” Liberals, President Bush was a “Cut and Spend” Republican. Experience shows that a cut and spend policy can be even more immediatly destructive than a tax and spend one. Spending must also be cut and at the very least made more efficient and cost effective. President Bush did the opposite and grew public spending. That, I did not agree with and I DID protest it.
You may dissagree with my position, but while responding to your request for my record on President Bush’s tax cuts I thought I would flesh it out a little to give a more complete picture.
Thanks… and if it’s that debunked CRA stuff, don’t waste your time or mine.
Oh, I am sorry so you believe the government when it denies its own culpability. You are right there is no point in discussing that with you then.
My perspective is that a series of government policies, regulations and deregulations, since at least back to 1938 have led to the situation where mortgage lenders were pressured to lend to those who could not afford it, and then given the ability to come up with new ways to do so while minimizing their own risk. These policies came from both sides of the asile, and many of them worked when they were first instituted, but they continued with insufficient oversight and became detrimental as conditions changed, especially in the last few years.