Monday, January 05, 2009

The Stimulus Plan

Some mildly positive news on the Obama Pork Barrel Spending Stimulus plan – there's some tax relief.

Granted, it's still aimed at the spend, spend, spend, crowd, but it's something. There's still a lot of central planning crapola here – targeted tax cuts for this or that worthless, but favored, government approved behavior like layoff avoidence, but it's something. The more tax cuts and the less government “investment” programs, the better off we're all likely to be.

But what's really needed amidst the dreck is a major cut in corporate tax rates. America's corporate tax rate of 35% is not competitive with the rest of the world. High taxes = lower after tax profits = less investment, productivity, jobs, and dividends.

Corporations do not pay taxes.

Repeat after me: Corporations do not pay taxes. Shareholders, employees, and customers pay taxes.

A corporation is a legally fictitious person. Like all fictitious people, it can only pay fictitious taxes.

Lowering those rates would make most companies more profitable immediately. More profits = better shareholder returns, more investment, more jobs.