Monday, October 09, 2017

Tax Cut 30, Trump's 20% CIT, deregulation

When the White House proposed a drastic corporate income tax cut (from 39% to 20%), 25% for single proprietorship, they did not suggest a tax hike somewhere to "compensate for lost revenues" like the Dutertenomics' tax-tax-tax.

Copy-pasting portions of these press releases and short blog posts from the WH.

"* The U.S. corporate tax rate has been higher than the OECD average for almost 20 years.
The average total corporate tax rate among OECD nations is 24 percent, while the United States is nearly 40 percent.

* The U.S. average corporate tax rate is almost 10 points higher than China’s, according to the Congressional Budget Office." -- Sept. 29, 2017.

"Our plan is based on four simple principles: reducing taxes for working families, simplifying the tax code, cutting taxes for businesses large and small, and making it possible for American companies to bring profits home to America to create jobs and opportunities here."
-- VP Mike Pence, Oct 03, 2017.

"In 1989, the year the Berlin Wall fell, the average statutory corporate tax rate imposed by central and sub-central governments in the OECD was 43 percent. In 1989, the comparable rate in the U.S. was about 39 percent. In the time since the Wall fell, the OECD average corporate tax rate has trended downwards to its current 24 percent, about half of its 1989 level. The U.S. corporate tax rate, however, is still stuck in the same place it was when the Berlin Wall crumbled almost 20 years ago.

There is now a broad consensus in this country that it is time to “Tear down this rate.”
-- Kevin Hassett, Chairman of the Council of Economic Advisers.

"The America First Tax Plan will bring historic tax relief to the American people through a framework that is “based on four key ideas,” said the President. First, the plan will cut taxes for every day, hardworking Americans, taking the burden off the middle class. Second, the tax code will be dramatically simplified, allowing Americans to file their tax returns on a single sheet of paper. Third, the business tax rate will be lowered to 20 percent, making business in America competitive again. And finally, the “American Model” will encourage businesses to return from overseas, bringing trillions of dollars to the economy." -- Sept. 28, 2017. 

Good summary of support from the Editorial Boards of WSJ, NYPost, WTimes, WExaminer, Inv Business Daily, National Review. Nothing from NYT, WaPo, CNN, BBC, etc. Perhaps they love more taxes, more regulations, more welfarism, more statism or state worship.

Accompanying drastic tax cut is drastic deregulation and de-bureaucratism.

"* In 2000, completing paperwork for Federal regulation cost an estimated $236 billion (up from $143 billion in 1980). Assuming the same proportion of compliance officers’ salaries out of total paperwork cost, the cost of paperwork increased to $881 billion in 2015.

* Regulation is especially burdensome for small businesses: the cost per employee of complying with regulations was higher for small firms ($11,724) than it was for firms with over 100 employees ($9,083)...

* There were approximately 45,000 more pages in the Federal Register, which reflects the flow of new regulations, than 40 years prior." -- October 02, 2017.

I wonder why many "libertarians" and free marketers would be silent or even implicitly attack this tax cut plan by Mr. Trump as "favoring the rich" or "favoring Trump businesses". Perhaps the quick answer is that many libertarian-anarchists argue that "taxation is theft" and hence, the tax rate should not be 39%, not 20%, not even 1%, but zero. Zero taxes, zero government as we know it.

Fine, if one is talking to students or fellow anarchists. But if one is involved in public policy debates, engaging government officials, legislators, etc. is necessary and inevitable. It is not possible to advocate "zero government" while engaging government for lesser regulations, lower and fewer taxes, lower non-tariff barriers in trade, and so on.

For now, I just like what I see in the Trump fiscal policies.

See also:

Tax Cut 27, The Furusato tax in Japan as possible model in citizen empowerment, October 14, 2016 
Tax Cut 28, On Trump's planned 15% income tax, January 23, 2017 
Tax Cut 29, Culture of exemptions and culture of envy, February 06, 2017 

Trump's Joint Address at US Congress today, March 01, 2017
BWorld 136, Income tax and the politics of envy, June 12, 2017 
Tax-tax-tax, Free-free-free, August 09, 2017

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