Abolish corporate income tax
Sen. Carl Levin was aghast.
Before his committee sat, unapologetic and uncontrite, Apple CEO Tim Cook, whose company had paid no U.S. corporate income taxes on the $74 billion it had earned abroad in recent years.
“Apple has sought the Holy Grail of tax avoidance,” said Levin. “Apple has exploited an absurdity.”
Actually, Apple had done nothing wrong, except hire some crack accountants who chose Ireland's County Cork as the headquarters of the company's international division. Thus Apple paid on profits earned outside the U.S. nothing but a 2 percent tax imposed by the Irish government.
Far from being condemned, Apple's CPAs ought to be inducted into the Accountants Hall of Fame. It is no more immoral for Apple to move its headquarters for foreign sales to Ireland than for Big Apple residents to move to Florida to escape the 12 percent combined state and city income tax.
The problem here is not with Apple; it is with Sen. Levin & Co.
In a press release, “Avoiding Their Fair Share of Taxes,” the AFL-CIO hails Levin and bewails the fact that though the U.S. corporate tax rate is 35 percent, highest in the world, corporate income tax revenue has fallen to well below 10 percent of federal tax revenue.
Perhaps we should start thinking and acting as our forebears did. In the same Wall Street Journal that reported on Cook's defense of Apple, former Sen. Phil Gramm described that earlier America: “Over the late 19th century, real GDP and employment doubled, annual average real earnings rose by over 60 percent and wholesale prices fell by 75 percent, thanks to marked improvement in productivity.”
Astonishing. And what is the difference between that age and ours? A 35 percent income tax rate on individuals and corporations that did not exist then and would have been regarded by Americans of the Gilded Age as the satanic work of Karl Marx.
Since the U.S. corporate income tax now produces less than 10 percent of federal revenue and less than 2 percent of gross domestic product, abolish it. Get rid of it.
Assume this would cost the Treasury $250 billion in lost revenue. How to make it up? Put a 10 percent tariff on imports entering the United States, which last year added up to $2.7 trillion.
This tax reform would thus be revenue-neutral. And what would this accomplish?
Every U.S. corporation that had moved abroad in search of lower taxes in recent years would start thinking about coming home and bringing its production and its jobs back to America.
And that $2 trillion in income U.S. companies have stashed abroad would come roaring back into U.S. institutions.
“Since 1980, the U.S. has run trade deficits in every year totaling about $9 trillion,” writes columnist Robert Samuelson.
That has unmade America as a self-reliant republic and made China a manufacturing marvel. And those trade deficits are how America became a dependent nation in hock to the world.
From 1865 to 1914, America had 10 Republican presidents. All believed in financing government by taxing imports, not the incomes of U.S. citizens or the U.S. companies that employed them.
And this was how the miracle Sen. Gramm details came about.
Pat Buchanan is the author of “Suicide of a Superpower: Will America Survive to 2025?”
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Pirates come back to take series from Padres
- Starkey: Is this Huntington’s best Bucs team?
- U.S. allows ‘purposeful’ cruises to Cuba; Carnival plans trips from Miami in May
- Roundup: Wolf names 48 to task force on expanding gas pipelines; Airlines boost on-time rating; more
- 92-year-old Rostraver home invasion victim questioned by suspect in court
- Longtime bus driver worked hard to the end
- Nonprofit finds 529 illegal dump sites in Pittsburgh, 250 more than 2009
- Plum board members reach consensus on new elementary school
- U.S. job openings stay high, but actual hiring falters in May
- Risk for insurers, mutual funds are stronger, IMF claims
- Pirates notebook: Kang settling in to comfort zone