6 months ago

Dr. Daniel Sutter: Who actually pays the corporate income tax?

 

 

The Senate passed a tax bill last weekend. The details must be ironed out in conference negotiations with the House, but the plan includes a corporate income tax overhaul. This was a campaign promise of President Trump, and is long overdue.

The corporate income tax does not apply to all businesses, only those organized as corporations, which include most recognizable national businesses. Washington currently taxes corporate income above a modest threshold at 35 percent, the highest rate of any developed nation. The top rate will fall to 20 percent, in line with other countries. Our rate is high now in part because we are one of three developed nations not to have cut corporate taxes since 2000.

The U.S. also currently taxes profits earned by the international subsidiaries of American firms, as opposed to just domestic earnings. The 35 percent rate, less any taxes paid to another nation, essentially applies to all earnings everywhere. The Senate bill would end worldwide taxation.

The corporate income tax affects many business decisions. The tax has fueled corporate inversions, which is when an American company reincorporates in another nation. Burger King and Fruit of the Loom, for instance, have renounced their American corporate citizenship.

Inversions are for tax purposes and do not move all operations or even the headquarters overseas, but are still troubling.

American companies also keep significant earnings overseas, perhaps as much as $2.6 trillion, to avoid our taxes. The Senate bill allows repatriation of these profits with payment of a 14 percent tax. Lowering our top rate and ending worldwide taxation should end this problem.

Few companies, though, pay the full corporate tax. The Government Accountability Office found that around 70 percent of all corporations – and 20 percent of the most profitable – pay no corporate tax in a typical year, due to tax breaks. The corporate tax has raised about 10 percent of Federal tax revenue since the 1980s, versus 30 percent in the early 1950s. We do not really rely on the corporate income tax to fund Washington.

Modest revenue generation does not imply no harm to our economy. The tax particularly impacts companies unable to secure breaks from Congress. And when CEOs focus on avoiding corporate taxes, they are less likely to improve their products and services or lower costs. A focus on avoiding taxes slows economic growth.

Many Americans, I think, still like the idea of making rich corporations pay. Only the corporate tax does not ensure this. Taxes often get shifted, meaning that the people sending a check to the government may not really pay the taxes. Consider the example of gas taxes, which gas stations “pay.” Higher taxes generally increase the pump price, effectively passing on some of the tax to drivers. The potential for tax shifting makes the analysis of who really pays taxes relevant and challenging.

Appearances can be deceiving, and politicians count on this with corporate taxes. As Nobel Prize winning economist Joseph Stiglitz writes in a textbook, “Politicians like to give the impression to voters that someone else pays the corporate tax. But the reality is that households, workers, consumers, and investors pay the tax, just as they pay any other tax.”

Economists are unsure who really pays the corporate tax, partly because the answer depends on many factors. Candidates include a corporation’s customers, its workers, and investors across the economy. Even if the owners pay, which is likely at least in part, not all stockholders are rich. Many Americans own stocks through pension plans.

I personally believe that we should keep taxes and spending low. When we tax ourselves, I think that we should use taxes with clearly understood incidence. This makes the burden of government transparent, encouraging informed decisions by citizens.

The corporate income tax fares poorly in this regard. The tax today is like a con game, one riddled with exemptions for privileged firms. Reform is long overdue.

Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University.

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18 mins ago

Any politician not calling for a special session on school security is committing political malpractice

The most predictable thing in America is that we will have another school shooting soon. We don’t know where it will be, but it is coming.

Every delay in addressing these issues is another day closer to more dead kids, and an eventual mass casualty event in Alabama. We can talk about hardening targets via new construction, and limiting access to guns until we are blue in the face, but these things are either expensive or not happening.

Every politician in a heated race in Alabama should be calling for a special session on school safety. State Representative and candidate for Lieutenant Governor Will Ainsworth is right on track with a real solution:

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“Every school shooting that takes place in another state around the country brings us one step closer to an active shooter attacking classrooms here, in Alabama, so the governor would be wise to call a special session this summer,” Ainsworth said.  “Signs reading ‘Gun Free Zone’ are a magnet for those who wish to do harm, so we must provide teachers with the training, knowledge, and ability to defend their students with something more lethal than a ruler and a No. 2 pencil.”

Of course there is an ad as well:

Why this matters: This is good politics and good policy. The people have decided on this. The media can pretend all they want that people are torn on this, but they are not. Americans, and Alabamians especially, understand that there is nothing stopping shooters from walking into their kids’ school today and shooting it up. The idea that allowing teachers to carry makes a child less safe is laughable, the teacher willing to do harm is not stopped by a gun-free zone. Good teachers with guns, however, are following the law and the law is protecting school shooters.

The details:

— 69 percent of Republicans are in favor of allowing teachers to carry.

— 78 percent of parents would feel more safe, or just as safe, with their child’s teacher being armed.

— The media is lying and saying there have been 22 school shootings in 2018. They include accidental discharge of a firearm in their count.

— As of May 8th, Gov. Kay Ivey had not ruled out a special session, but she has not responded to Ainsworth’s call.

@TheDaleJackson is a contributing writer to Yellowhammer News and hosts a conservative talk show from 7-11 am weekdays on WVNN

48 mins ago

‘Party Like It’s 1776’ theme too offensive for school prom

A New Jersey high school principal apologized Friday for a “Party Like It’s 1776” theme at prom.

Dr. Dennis Perry, principal of Cherry Hill High School, posted on his Twitter feed an apology for the theme printed on prom tickets, calling the decision “insensitive and irresponsible,” reported Fox News.

“I especially apologize to our African American students, who I have let down by not initially recognizing the inappropriateness of this wording,” Perry wrote in a statement.

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To make up for what he deemed an indiscretion, the principal said students would not need to bring their prom tickets in order to get into the event — they would instead only need to state their names to be matched up with a list of who bought tickets. Cherry Hill High School would also give every student attendee a “commemorative” ticket displaying a new design at the prom. Perry stated that a “diverse group of people” would review information distributed by the school prior to its dissemination, in the future.

Lloyd Henderson, president of the Camden County NAACP East Chapter, saw the incident indicative of a school culture “where African American students’ needs are not considered along with the rest of the school,” but mentioned that he appreciated Perry’s speedy response.

Cherry Hill High School made headlines in February when it suspended social studies teacher Timothy Locke after Locke told students to remember him if he died defending them during a school shooting.

(Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org.)

2 hours ago

Alabama boy drowns in rough surf along Florida’s Gulf Coast

A 5-year-old Alabama boy died after getting caught up in rough surf on Florida’s Gulf Coast.

The News Herald reports Christian Doyle of Dothan, Alabama, was one of three swimmers pulled from the water off Panama City Beach on Saturday evening. Officials say single red surf warning signs were flying at the time, notifying beachgoers of the poor conditions.

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Panama City Beach fire rescue crews and a bystander performed CPR on the boy, but he died a short time later at a hospital.

The conditions of the other two swimmers, who were also from Dothan, were not immediately available.

(Associated Press, copyright 2018)

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Why Christians should visit holy lands


Listen to the 10 min audio

Read the transcript:

TOM LAMPRECHT: Harry, last week, we talked about the opening of the new embassy in Jerusalem by the United States. Guatemala, later in the week, also moved their embassy from Tel-Aviv to Jerusalem.

Harry, in the aftermath of what happened on that day, there were, as we talked about, a number of Palestinians that were trying to breech the security border fence in Israel and they were pushed back by Israeli soldiers. A number of Palestinians were killed.

Later last week, we found that, indeed, while there were a number of Palestinians protesting, they were infiltrated by a number of terrorists and, in fact, there’s video evidence that Hamas was paying children to be involved in that group and some of those children lost their lives.

WHY VISIT THE HOLY LAND?

DR. REEDER: Tom, I’m going to be over there while this program is airing. People ask me, “Why do you go there?” It’s a principle I’ve learned in my own life and I use it in teaching others: If you can get direct access to the environment to where things occur, you pull in all of your senses when it comes time to learn and that enhances your learning — you get insight while you’re on-site.

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As we are spending the time there, we’ll go to the various places. I have a wonderful guide that goes before us and checks all the logistics and then makes her statements about the area. She’s very knowledgeable and then she steps back. And then I start going into connecting the dots — Old Testament, New Testament, what happened here, why’d it happen here — and the providence of God.

SITES OF JESUS’ MINISTRY CAN BRING THE BIBLE TO LIFE

I take people to the city of Naan — that’s where Jesus raised the boy who was being carried out of the city. I actually have found the place where that occurred and, not long after that, interestingly, an archaeological team working from the United States working in Israel found that the gates of the city were actually right there. And the way I found it is I found the ruins of an old church that used to be there, knowing that, early on, they would build churches on sites where certain things had occurred. That’s how I found it and then archeology, there was a big article on this in Biblical Archeological Review, they begin to dig and, sure enough, they found out that here’s where the gates of Naan were.

Now, there’s a lot of reasons to weep when your only son died if you’re a widow. In the surrounding societies, widows lost their legitimacy of existence when their husband died. What could preserve them is their children, in general, but the firstborn male, in particular.

Therefore, with her husband gone and her child gone, if she actually had been in another country, many of them, they just put them out and let them die or even, in some cases, put them to death because such women were considered as a burden upon society and no longer a productive member of society.

In Israel, that was not the case because the Lord had embedded the dignity of women into the ceremonial laws, in general, and the Law of God, in particular: “Honor your father and your mother.” “Do not commit adultery” — the sanctity of marriage and, therefore, the wife’s position in a marriage, that a wife was not just property.

He raises the boy and she’s got a lot of reason for joy and the people are amazed and they say, “He’s a prophet.” What a lot of people don’t realize is that there was a great prophet by the name of Elisha and that is the very area where he ministered. He, of course, raised a widow’s son as an affirmation that he had followed Elijah, who raises a widow’s son.

And, right there in that very area, they would be fully aware of that, very sensitive to that story and, when Jesus comes in and raises up the widow’s son in that same area, no wonder they cry out, “This is the prophet of whom we have waited.” What you can see is the amazing connecting of dots of all that takes place in this rather small country, about the size of New Jersey.

WHY IS ISRAEL SO CONTROVERSIAL?

TOM LAMPRECHT: And, Harry, as we look at Israel and the miracles that took place — some of the stories that you just shared with us just now, yet today it seems to be somewhat of a powder keg ready to go off at any moment. Harry, is that coincidental or is there a spiritual implication there?

DR. REEDER: We’re constantly amazed at how accurate the Bible is, both what it has recorded as history and then what it prophesies as history. Prophecy in the Bible is pre-written history and God has already told us of these conflicts that are going to be there, the conflicts that are going to exist throughout the world, and the particular conflicts that are going to be there in terms of the enmity of the nations.

Now we should, as believers, always pray for the peace of Jerusalem, we should always promote peace in the area and we need to deal justly with all sides in the conflict that is there. And you need to remember that you have brothers and sisters who are Jewish, who are in Christ and know the Lord, and you have brothers and sisters who are Palestinian who are in Christ and know the Lord. Therefore, we’re always laboring for that peace in the area.

However, Tom, while I’m there, I hope to let people see their Bible come alive and then, when we get back, I get people writing me all the time, “Can I tell you what that means? My Bible now is so alive when I read it because I was right there,” –getting insight while you’re on-site.

One of the places that the people will go is the Golan Heights and, when we go there, we’ll be looking over into Syria. Not only is there tension on the southern border of Hamas and Egypt and the Gaza, but there’s also, as you know, quite a bit of tension with Syria because Syria has become a proxy for Iran and Iran has already attempted some incursions. We’ll be taking a look from the observation post that they allow you to look from.

IT IS IMPORTANT TO SHARE THE GOSPEL

While we’re there, we’re going to share Christ with people and we’re going to pray for Israel. Let me just also say, Tom, that 30 years ago, it was less than 1 percent of Jewish people confessed Christ as Lord and Savior. It is now believed that they’re rising up to 5 percent. Now, that doesn’t sound like much, but that is an extensive multiplication.

There’s also some evidence within the military of an underground movement of the Gospel taking place in the Israeli country and there have been a number of churches that have been able to secure some freedoms that Christian churches have not enjoyed in the past but now do enjoy, which then has opened up other doors in ministry as well.

When I pray for the peace of Jerusalem, I not only pray, certainly, for the peace among the nations and the ethnicities, but I also want to pray very specifically for the Gospel of Peace so that men and women can be right with God through the redeeming work of Jesus Christ, filled with the Spirit of God.

When you’re filled with the Spirit of God, then you have the fruit of the Spirit — love, and joy, and peace, and patience, and kindness, and goodness and faithfulness, and gentleness and self-control — and then pray that the Gospel of saving grace in Christ that brings men and women at peace with God would promote their peace with one another and then, in fact, reach out in peace, certainly not to the detriment of the security of the nation, but in order to promote the security of the nation.

And I do pray that, somehow in some way, God uses our country here, America, as a part of both of those desires that I pray for. One part is that America will have believers who are praying for and sending those who can share the Gospel throughout the land of Israel. And, secondly, that the leadership of our nation might be able to assist in some way to bring a political, and national and ethnic peace among the peoples that are there but, all the while, seeing that movement of the Gospel of peace of Jesus Christ and the redemptive work of Christ bringing the true shalom — shalom, that wonderful word of peace.

COMING UP TOMORROW: OUR GOVERNMENT BRANCHES IN JEOPARDY?

TOM LAMPRECHT: Harry, on tomorrow’s edition of Today in Perspective, I want to take you to a report that was released by the New York Times last week which ought to be somewhat concerning for all of us. It really describes how the separation of the three branches of our government are starting to erode.

DR. REEDER: Not only is it the law that is king in America — not any individual or any one branch of government — but how that wisdom needs to be embraced once again.

Dr. Harry L. Reeder III is the Senior Pastor of Briarwood Presbyterian Church in Birmingham.

This podcast was transcribed by Jessica Havin, editorial assistant for Yellowhammer News, who has transcribed some of the top podcasts in the country and whose work has been featured in a New York Times Bestseller.

3 hours ago

Trump: Hire America also means helping former inmates get work

President Donald Trump’s Hire American plan includes helping former inmates find gainful employment, he said Friday at the White House Prison Reform Summit.

“When we talk about our national program to hire American, this must include helping millions of former inmates get back into the workforce as gainfully employed citizens,” the president said. “At the heart of our prison reform agenda is expanding prison work and the programs so that inmates can reenter society with the skills to get a job.

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“We also want more mental health services so released inmates can cope with the challenges of life on the outside, and some of those challenges are not easy. We’re developing more effective drug treatment so that former prisoners can remain drug-free,” he said.

“Prison reform is an issue that unites people from across the political spectrum,” Trump said, adding, “Our whole nation benefits if former inmates are able to reenter society as productive, law-abiding citizens.”

He said over 62,000 inmates are released from mostly state prisons, and they struggle to find a job, stay off drugs, and “avoid old habits that lead them back to a life of crime, back to prison.”

“Drugs are playing a tremendously big role in our lives — in so many lives — not only having to do with prisoners, but having to do with people that never thought they’d be addicted, that never thought they’d have a problem like this, that are having a really hard time coping — drugs. We’re doing a big, big job on drugs. It is a scourge in this country,” the president said.

“In this effort, we are not just absolving prisoners of their central role in their own rehabilitation. There is no substitute for personal accountability, and there is no tolerance for those who take advantage of society’s generosity to prey upon the innocent,” Trump said.

The president said he supports prison reform efforts, and he pledged to sign prison reform legislation that clears Congress.

“As we speak, legislation is working through Congress to reform our federal prisons. My administration strongly supports these efforts, and I urge the House and Senate to get together — and there are a lot of senators, a lot of Congress people that want to get this passed — to work out their differences. Get a bill to my desk. I will sign it, and it’s going to be strong, it’s going to be good, it’s going to be what everybody wants,” Trump said.

A bipartisan prison reform bill backed by the White House cleared the House Judiciary Committee on Wednesday.

The FIRST STEP Act (H.R. 5682), sponsored by Rep. Doug Collins (R-Ga.) and co-sponsored by Rep. Hakeem Jeffries,” provides for programs to help reduce the risk that prisoners will recidivate upon release from prison, and for other purposes.

The bill authorizes the Bureau of Prisons to spend $50 million a year for five years on job training and education programs to reduce recidivism. It also clarifies current law to allow inmates up to 54 days of credit for good behavior each year. It was previously interpreted to allow only 47 days a year.

The bill also has the support of Rep. Keith Ellison (D-Minn.), deputy chairman of the Democratic National Committee.

Several Democrats – Sens. Dick Durbin (D-Ill.), Kamala Harris (D-Calif.) and Cory Booker (D-N.J.) and Reps. Sheila Jackson Lee (D-Texas) and John Lewis (D-Ga.) – wrote to their fellow Democratic lawmakers Thursday urging them not to support the bill, spearheaded by Trump’s son-in-law and adviser Jared Kushner, because they say it is “flawed” and doesn’t include sentencing reform.

(Courtesy CNSNews.com)