Richard,
You still never addressed how to bring jobs back to America and cut the trade deficit. I'm waiting.
And Sqrl -
America is indeed #2 in corporate tax rates in the developed world. Why would a company decide to set up shop here, or in Japan, when they can do it virtually anywhere else for a fraction of the price?
That is why jobs are going to India (30% vs. America's 39%) and China (15-25% vs. America's 39%).
As for Richard's assumption about raising income tax to offset corporate taxes:
You assume that is needed. It is a false assumption that need be the case. In actuality, studies have shown that when nations have reduced corporation taxes, new businesses/jobs are created which funnels more corporate taxes alongside income taxes. So its a very narrowminded view to assume that reducing taxes in one area always requires increases in other areas.
The truth of the matter is that corporate taxes make a very small part of the total American tax base. We could cut corporate rates in half, and most likely see a reduction in receipts by just 10% if that.
Ultimately, Richard asked the question 'why would someone build in America when they can do it in India/China?'. Well there are a few reasons: Tariffs, shipping, labor productivity, and other such reasons. The truth is, American workers are better than most counterparts. However, if excessive taxes are in place, then it is a really easy reason as to why you'd go overseas. Corporations must not only pay $20/hr for an American worker, but pay 39% taxes on profits, and another $10-$20 between pensions, and other government-mandated costs. If you get some of those out of the way, then it makes it easier and likelier for a corporation to come hire Americans in America.
Look at South Korea for proof. They have incredibly low tax rates, and have had massive growth in GDP, and standards of living. I'm not stating that taxes are the be-all end-all (as I've said before), but they are one part of the puzzle...Again, it costs a lot of money to keep a worker between the now-mandated insurance programs, unemployment, social security, medicare, and such things...Alongside of work-hampering regulations. If you get some of that out of the way, then businesses will hire, and people will make more money. It will also reduce the trade deficit, as more goods are available from American entities., as well as better exports from America.
Ultimately, until we fix the trade deficit, and make our regulations and tax codes more inline with aggressive nations, we're going to continue to ship jobs to them, and continue our imbalaced trade deficit.
*edit*
Found the data for federal recipts. If we reduced corporation taxes by 50%, we would see a reduction of 6% of tax recipts....Do you not think we could withstand a 6% reduction if federal receipts to see millions of jobs be created?
Back from the dead, I'm afraid.
