Comments on: To create growth, unleash the invisible foot http://blogs.reuters.com/reihan-salam/2013/03/01/to-create-growth-unleash-the-invisible-foot/ Wed, 30 Jul 2014 19:10:25 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: thoughtful02 http://blogs.reuters.com/reihan-salam/2013/03/01/to-create-growth-unleash-the-invisible-foot/#comment-346 Tue, 05 Mar 2013 20:46:16 +0000 http://blogs.reuters.com/reihan-salam/?p=154#comment-346 This idea is silly. It’s just another tweak to the current tax code. If you want real change/reform, eliminate all taxes on commercial activity, eliminate all flat taxes, eliminate all deductions and exemptions for individuals or sole proprietorships eliminate the distinction between so-called capital gains and ordinary income, and tax individuals progressively on a very steep tax rate schedule like the schedule in 1954.

These changes would increase tax revenue, stimulate economic growth, end the distortion of economic decision-making that the interest and depreciation deduction cause, eliminate or reduce “financial engineering” as a form of entertainment for the wealthy, simplify the tax code, streamline the IRS (which is already very efficient, if not very effective – but that’s about Congress’ tax code). Such changes would attract businesses and, contrary to some arguments, not drive wealthy individuals away. Where would they go? Columbia? Jamaica? The Caymans? Chad? Kenya? Please… These changes would also eliminate of non-productive work for such highly skilled and intelligent professionals as lawyers and accountants, thereby, driving them into productive employment and enormous economic waste that this work entails. They would reduce significantly or eliminate the need for the IRS to sue companies for tax avoidance (they do this a lot, btw) and redirect their efforts to collecting taxes in a straightforward way. Last, they would reduce significantly or eliminate incentives for businesses to lobby Congress, the Executive Branch and the Judiciary (yes, the Judiciary…) for favorable tax treatment under the tax code. Think about the productivity improvements you would see in Congress. Think about the how these changes would reduce the advantages that established companies have over new competitors and small businesses who can’t lobby for special treatment or that can’t take advantage of the interest deduction until they’ve established credit. The imbalance between the cost of debt and the cost of equity would shrink to a small premium for debt (no benefit of ownership or control with debt).

So, that’s it: eliminate taxes on business, flat taxes and tax individuals without exemption or deduction at aggressively progressive rates.

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By: 1MTLMAN http://blogs.reuters.com/reihan-salam/2013/03/01/to-create-growth-unleash-the-invisible-foot/#comment-345 Tue, 05 Mar 2013 01:07:11 +0000 http://blogs.reuters.com/reihan-salam/?p=154#comment-345 A little “Deflation” would be good for everyone and the economy.

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By: changeling http://blogs.reuters.com/reihan-salam/2013/03/01/to-create-growth-unleash-the-invisible-foot/#comment-343 Mon, 04 Mar 2013 20:57:05 +0000 http://blogs.reuters.com/reihan-salam/?p=154#comment-343 Excellent article. Sometimes the simplest ideas are the best. And while not a cure-all, it represents a step in the right direction.

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By: AuAgExpl http://blogs.reuters.com/reihan-salam/2013/03/01/to-create-growth-unleash-the-invisible-foot/#comment-339 Mon, 04 Mar 2013 03:37:34 +0000 http://blogs.reuters.com/reihan-salam/?p=154#comment-339 Lowering the corporate tax would be a good start, but true tax reform is really needed. I would suggest that a massive simplification of the system with flow through taxation (no deductions) may help. If capital gains and income were taxed at the same rates and there were no deductions allowed, you could possibly talk about eliminating corporate taxes. A flat tax would seem to me to make sense, but will likely never see the light of day. I may be wrong, but if corp taxes were dramatically lowered, you would see a huge influx of companies into the US and significant new business growth.

But there are many other issues besides taxes, not the least of which is the incredible level of regulations that businesses must deal with. Leveling the playing field for small business will take more than tax reform.

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By: SamuelReich http://blogs.reuters.com/reihan-salam/2013/03/01/to-create-growth-unleash-the-invisible-foot/#comment-338 Mon, 04 Mar 2013 00:32:21 +0000 http://blogs.reuters.com/reihan-salam/?p=154#comment-338 As more things get more technical than consumers or salesmen who became a CEO knows about, there needs to be regulation to make sure people do not get killed, hurt or bankrupt.

Examples: Nuclear energy, toxic material (remember asbestos), medicines and medical devices, Building or all sorts need building codes so they do not fall in earth quakes, catch fire from bad wiring, the radio spectrum needs to be regulated or just have noise not cell phones. As the salesmen think up more odd securities and deals they have to be regulated.

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By: SamuelReich http://blogs.reuters.com/reihan-salam/2013/03/01/to-create-growth-unleash-the-invisible-foot/#comment-337 Mon, 04 Mar 2013 00:22:54 +0000 http://blogs.reuters.com/reihan-salam/?p=154#comment-337 Wise up all the things the consumer buys that can kill or hurt him that he has little knowledge of need regulation. We need building codes as shown by death tolls in areas with reasonable ones and enforcement during earth quakes, medicines is another example.

We can make the market place more completive by trust busting firms more than double economic scale and giving firms less than half economic scale incentives to merge.

The question is who determines what economic scale is in any line of bossiness.

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By: robb1 http://blogs.reuters.com/reihan-salam/2013/03/01/to-create-growth-unleash-the-invisible-foot/#comment-336 Sun, 03 Mar 2013 23:21:13 +0000 http://blogs.reuters.com/reihan-salam/?p=154#comment-336 Corporate Federal Tax of 15% for the first $50K earned should be raised to $250K. Top Corporate rate should be 30%. Most states tax us another 10%+ (e.g. California).

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By: Acetracy http://blogs.reuters.com/reihan-salam/2013/03/01/to-create-growth-unleash-the-invisible-foot/#comment-335 Sun, 03 Mar 2013 17:58:29 +0000 http://blogs.reuters.com/reihan-salam/?p=154#comment-335 An even better corporate tax plan would be a tiered tax rates by EBITAD levels.

Federal Income tax should be based on Earnings before Interest, Taxes and Depreciation. And it should be tiered just like individual tax rates. The first $million in EBITDAD at 10%, $10 million at 10% all the way up to over $1 billion 25%.

Most companies create accounting losses (and thus no income tax) by using debt and depreciation (also here depletion allowance). The beauty of this tax plan is that very few companies will be able to avoid taxes, and those that don’t leverage up, don’t over pay for acquisitions (writing off goodwill), and don’t push revenues into off-shore tax havens (supposed foreign tax) will be on the same playing level tax wise as the GEs, Mercks, Exxons, etc. of this world.

Corporate Income tax used to provide over 1/3 of Federal tax revenues in the 1950s but today it is less than 15% – more than 50% drop. IT has been the middle class that have picked up the tab. Plus in the 1950s many corporations provided pensions which have nearly disappeared. Another cost push to the middle class. IN the meantime, executive pay has skyrocketed (even the Swiss can’t take it anymore).

When large multinationals pay more in lobbying DC than they do in Federal Income tax, then we all understand who really runs our government and tax policy. It has nothing to do with economics but with greed. The result has been a US economy that is too leveraged, too reliant on old entrenched industries (oil, mining, agriculture, autos, and finance) to the detriment of the small entrepreneur who is really creating jobs of tomorrow.

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By: johnwerneken http://blogs.reuters.com/reihan-salam/2013/03/01/to-create-growth-unleash-the-invisible-foot/#comment-334 Sun, 03 Mar 2013 04:25:17 +0000 http://blogs.reuters.com/reihan-salam/?p=154#comment-334 I suspect if we move as far as we can without sending the military into the streets to end such things as deductions for interest TO HOME OWNERS as well as to businesses; deductions for TAXES; unfunded entitlements of all kinds; public regulation not directly related to serious risks to life or health of humans; and then seeking to provide publicly funded anything by competitive means with beneficiaries choosing the means – in short everything we can do to make anyone with much stake in society as insecure as possible – we will all get off our behinds and work, and allow others to.

With sufficient abundance, most will win a satisfactory hare and the society as a a whole could actually support a VAT to keep the least well off in dignity.

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By: BCanuck http://blogs.reuters.com/reihan-salam/2013/03/01/to-create-growth-unleash-the-invisible-foot/#comment-333 Sat, 02 Mar 2013 20:52:35 +0000 http://blogs.reuters.com/reihan-salam/?p=154#comment-333 The far simpler solution is to lower corporate income tax rates to ZERO
And
Then tax dividends (and capital gains) at normal personal income tax rates.

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