Democrats ignore AAA countries' experience
Call me crazy, but if I wanted my AAA debt rating back, I would do what other AAA-rated countries do.
Strangely, Democrats are pushing for higher tax rates as a way to address our debt rating woes. See Dick Durbin's statement:
S&P's decision to downgrade the US credit rating due to our ongoing debt crisis is unfortunate and underscores the need for a balanced, bipartisan and comprehensive solution to the problem. In the coming weeks, a Joint Committee of Congress will begin its work to reach just such an agreement. Their work will be incredibly important and must balance spending cuts with revenue increases.
And, Harry Reid's recent comment:
This makes the work of the joint committee all the more important, and shows why leaders should appoint members who will approach the committee's work with an open mind - instead of hardliners who have already ruled out the balanced approach that the markets and rating agencies like S&P are demanding.
These recommendations are nonsense, because all of the countries with AAA-rated debt (as compared to the United States' AA+-rated debt) already have lower corporate tax rates than the US does. Specifically, Australia, Austria, Canada, Denmark, Finland, France (yes, France), Germany, Luxembourg, Netherlands, Norway, Sweden, Switzerland and the United Kingdom all have lower corporate tax rates than the US.
The average corporate tax rate in these countries is 27.5% versus the current US tax rate of 39.2%. The US tax rate is 42% higher in relative terms and almost 12% higher in absolute terms. The Democrats are recommending increasing that disparity. I am confused but not surprised by this.