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The Ultimate Cost of Taxes Which Exceed Their Benefit
It's hard to argue with Pat Buchanan's call today to end the corporate income tax. As Buchanan notes, the U.S. corporate income tax, at 35%, is the world's highest):
• Amounts to less than 2% of gross domestic product;
• Produces only $250 billion of Federal tax revenue (less than 10% of the total);
• Drives American businesses abroad;
• Prevents the repatriation of their foreign profits;
• Increases the cost of doing both private and public business;
• Contributes to a cumulative trade imbalance totaling over $9 trillion during the last 3.5 decades; and
• Impedes productivity, real incomes, and gross domestic product.
Additionally (although Buchanan doesn't mention this) the corporate income tax is really only a consumption tax anyway because corporations recoup whatever corporate income taxes they do pay by raising their prices to consumers.
In other words, the cost of the corporate income tax exceeds its benefit. And Government shouldn't engage in anything whose cost exceeds its benefit.
Were this the golden Government (as it is the business) rule, we would be both less and better governed. Business can't, of course, long exceed this golden economic rule. Government can.
And the U.S. Government unconstitutionally does so at an astonishingly accelerating rate which can ultimately only destroy our currency, our economy, our politics, our security, and even our society itself.
For the truth is government has cryptically become a business -- by far the largest one in the Nation.
One needs look no further than Fannie Mae, Freddie Mac, and Obamacare to realize this (although the nature, scope, and scale of the problem are far larger than those three prime examples).
What happens when the cost of private business exceeds its benefit? Simple: business expense becomes greater than business income. And business goes out of business.
What happens when the cost of Government business exceeds its benefit? Government expense also becomes greater than government income. But Government doesn't go out of business. Instead, Government increases taxes or goes deeper into debt (and $17 trillion's already a lot of that), further debases its currency by inflating the monetary supply, politically bribes ever more voters by redistributing ever more income from those who earned it to those who didn't, and just keeps on growing into an ever bigger business whose cost exceeds its benefit by ever greater margins - until Government ultimately either becomes the only business (à la Marxism) or whatever business remains becomes a crony more or less engaged with Government in a common criminal syndicalism at the expense of every individual's natural rights.
And that might be the dawning dirty little secret of democracy -- even in a constitutional Republic whose founders innocently believed they'd restricted the Nation's governance to some thirty odd powers which preserved every individual's natural rights.
Yes indeed, abolish the corporate income tax. But, far more importantly, also abolish a criminally politicized tax code which permits Government to pick winners, pick losers, reward friends, punish enemies, and -- most critically of all for the future of democracy -- continually aggrandize itself by bribing voters who want Government to pay for the cost of their consumption increasingly exceeding the value of their production.
The latter, you see, ultimately constitutes the Nation's cost exceeding the Nation's benefit.
And none of us in that Nation will ultimately remain in any kind of business even remotely consistent with every individual's natural rights.
The only equitable income tax is a true flat tax rate on all the income of every individual from every source without adjustment or exemption. And that's the only income tax politically likely in a Republic with universal suffrage to produce governance whose cost doesn't exceed its benefit.
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