America officially recognized as a Third World basket case
by Klaus Rohrich
Over the past several months we’ve heard a lot about American corporations engaging in “inversions” as a tax saving strategy. The latest in this long line is the proposed merger of Burger King with Canada’s Tim Horton’s doughnut chain and relocating its head office in Oakville, Ontario, where Tim Horton’s is based. Predictably, the Democrats are seriously peeved, calling these companies “greedy” and “unpatriotic.”
However, looking at it from a less partisan perspective one can only surmise that many American corporations, in order to prosper and survive, are looking at ways to preserve their value to shareholders, and one such method is the acquisition of foreign companies and relocating.
“Why would anyone, even a corporation want to leave the United States?” you might ask. The answer isn't terribly complex; it can be summed up in a simple statement. The US corporate tax structure is punitive, ridiculously complicated and uncompetitive. One of the reasons that real unemployment in the US is so out of control is because the Democrats have placed huge onerous burdens on businesses that discourage growth. Consequently, the majority of businesses are choosing to keep their cash in their pockets, rather than expose themselves to having it confiscated.
The Tax Foundation, formed in 1937, is America’s leading tax policy research organization. This week the group released a report titled “2014 International Tax Competitiveness Index” that details and measures the degree to which the 34 OECD countries affect business investments through their tax policies.
Guess where America ranks among these 34 countries? (Hint: it isn't anywhere near the top, that’s where Estonia is) America placed 32nd out of the 34 countries, just ahead of Portugal and France. The factors that place America in this unenviable position include having the highest taxes of any country in the developed world and being one of only 6 countries in the OECD that has a system of worldwide taxation. The report goes on to state “The United States also scores poorly on property taxes due to its estate tax and poorly structured state and local property taxes. Other pitfalls for the United States are its individual taxes with a high top marginal tax rate and the double taxation of capital gains and dividend income.”
Democrats are planning on doubling down on their policies
Now what’s really interesting in all this is that the Democrats are planning on doubling down on their policies to make sure that they have enough money to keep buying votes from people who aren’t much interested in working.
According to the Wall Street Journal, President Obama and NY Sen. Chuck “The Rat” Schumer are planning to find ways to raise business taxes and are looking to further complicate the tax code. The plan will serve to punish businesses that attempt to legally relocate their domicile outside of the US in order to minimize their tax burden.
Such action presupposes that capital can be immobilized and businesses can be told when and where to invest. It’s the sort of policy that creates poverty and further forces individuals and families to depend on the government for their sustenance. If this sounds dubious, have a look at the current income and labor statistics.
At no time in its history has America had in excess of 92 million people not participating in the work force. The Census Bureau reports that some 45 million Americans currently live below the poverty line, which represents 15% of the total population. Yet the Democrats and particularly Schumer and Obama appear to be okay with these numbers increasing by heaping more and more onerous taxes on American business.
US corporations are currently stashing over $2 trillion in offshore accounts. The reason the money is offshore is because it’s earnings that are already taxed in the country where the money was earned. Under the current punitive tax regime any corporation that patriates their offshore earnings will see a sizable chunk of it confiscated by a greedy government.
Imagine what $2 trillion in capital investments could achieve for the American economy. If that money were invested in new business ventures or expansion of existing businesses there would be millions of new jobs, the poverty rolls would decline and government revenue would increase dramatically.
But you see, the Democrats have been seduced by the party’s Marxist wing and they would rather see the poverty rate double or triple than create conditions under which everyone prospers. If everyone prospers, then the Democrats risk losing their base of dependents.
Before Obama took office there were about 30 million Americans living in poverty. His policies have increased that number by a stunning 50%. It’s indicative that this drift into official Third World territory isn’t so much a fluke as it is a carefully crafted devolution.
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