The following was meant to be posted on the 11th of August, but I guess I fell asleep on it or didn't realize it wasn't published. Which sucks, because I wanted to reference this post in the "Bootstraps" post I made earlier. Better late than never.
I mentioned in a tweet a day or so ago about how some FM blowhard advocated lowering corporate tax rates to 0%, if he ever became "dictator" of the U.S. The whole idea behind that (the taxes, not the dictatorship) is with a 0% corporate tax, more businesses will feel compelled to set up shop and do business in the U.S., and not hide themselves and their profits in tax havens such as the Cayman Islands, or play shell games like Google's "Irish Sandwich." The "Trickle-Down Theory" comes into play as the record profits made by corporations will somehow find their way into the average American's pocket, in the form of more jobs and of course, more money to spend on the things that these corporations make, which in turn generates more profits, more jobs, etc, ad infinum. It's all about giving the "job creators" more money to create jobs with.
Except that the "job creators" seem loath to create much of anything except a tidy profit in this country. Anyone who's seen first-hand the wonders of corporate outsourcing and off-shoring know that these corporations will have little to no incentive for creating new jobs in the U.S., at least not when they can create those jobs in cheaper locations such as Mexico and China. The costs of labor are low and they don't have to worry about paying health benefits or 401(k) plans, either. So why build anything in the United States, where your bottom line will be eroded by people wanting decent wages and a health care plan so they won't go bankrupt when they fall deathly ill, when you can set up shop in one of the many nations willing to pay their people $5/day, because the standard of living scrapes the floor in those locales?
Another thing that a 0% corporate tax fails to address is exactly who'll be paying these taxes. Certainly not the wealthy, since they'll use every loophole in existence to lower their tax liabilities. There are some out there who want the capital gains tax lowered to insane single-digit percentages for this very reason. And if the wealthy are keeping their pocketbooks closed for the tax man, that leaves middle-class and working-class Americans to pick up the slack. It's uncertain how anyone can run any nation just by taxing the lifeblood out of the middle and working classes while letting the "job creators" create profits....ahem...."jobs". But the Tea Sippers and other advocates of a 0% corporate tax have a plan to take care of that.
That plan involves taking the butcher's knife to "entitlements" such as Social Security, Medicare, welfare and other government programs that function as a safety net for ordinary Americans. And it'll be done on the assumption that Americans, being the proud and individualistic people they are, really don't need any of this stuff. Welfare? Let churches and charity take care of that. Medicare? Let grandma and grandpa fade away with dignity in the comfort of their grandchildren's homes if they don't have the money to keep on living. Social Security? Shouldn't you already have a nest egg that's been taken care of by the tender loving hands of Wall Street? You lost it? That's unfortunate. Go to Wal-Mart and see if they're still taking "greeters."
Education, apparently seen as another "entitlement" to some, will also have half-dollar-sized chunks torn out of its collective ass, as government cedes the job of providing free education to the nation's children to corporate-supported charter schools and private schools, if you can afford them. The most basic education will come free, but anything considered an "extracurricular activity" will bear fees. Fees that some families can't pay, because they're keeping their heads above water with the factory and Wal-Mart jobs, as it is. Once again, those with the most money will have the most choices.
Without the weight of those "entitlements," shouldn't that leave more money in the average American's paycheck, nevermind how that paycheck is slowly dwindling in a race to match the checks of those in Mexico and other "competitive nations" while the costs of living rises astronomically? Now how are these people supposed to support the consumer spending bonanza that a 0% corporate tax is supposed to bring, if they barely have enough money to spend on the most essential items? Wouldn't Wal-Mart and Dollar General be just a bit worried their customers were becoming too broke to purchase "dollar items?"
The nation is run on tax revenue, and it will come from somewhere if this nation plans on existing in its current form. With a 0% corporate tax, it may be the middle and working classes that once again have to bear the load of fiscally holding this nation up.
