Posted on 05/04/2009 5:15:46 PM PDT by pleikumud
President Barack Obama's move to curb overseas tax havens and job outsourcing was his first major proposal in what promises to be a broad overhaul of the U.S. tax system.
Obama chose a relatively populist initial step. Daniel Griswold, an expert at the Cato Institute think tank, said locating affiliates in foreign markets is now the chief way that U.S. companies reach new customers outside the United States. "This demagogic grab for more revenue will only cripple the ability of U.S. companies to expand their sales in global markets, putting in jeopardy the U.S.-based jobs that support their foreign affiliates," he wrote in a blog.
In March Obama formed a White House task force to recommend ways to simplify the tax code, close loopholes and limit tax evasion.
Obama has vowed to increase taxes for Americans making more than $250,000 a year but other Democrats have voiced concern that this may not raise sufficient revenues.
RELATED LINKS Obama Seeks End of Tax Breaks for Overseas Firms BofA Plans To Raise $10 Billion: Report Citi Could Need $10 Billion: Report Which Banks Are Tested? Many voices, including Obama's, are calling for a simpler tax system.
The Center for the Study of the Presidency, a bipartisan think tank, issued a report in March that among other things, talked about the need to reform a tax code that contains 3.7 million words.
Among its conclusions was that: "The tax system needs to strike a better balance between taxing income and consumption."
(Excerpt) Read more at cnbc.com ...
There would be no loopholes, since everyone would pay taxes on purchases of new goods and services (not on used goods). The States would collect the sales taxes and forward to the federal government. Congress of course is very reluctant to pass this, since it would take away one of their primary tools used to control our lives.
A major risk is that one or more major countries will adopt this concept before the United States. That would put the U.S. at a significant disadvantage, since the others would attract far more capital, and create more jobs.
Go to www.fairtax.org to learn more and sign up. Write to your Congressmen and let them know we need the FairTax enacted.
“The States would collect the sales taxes and forward to the federal government. Congress of course is very reluctant to pass this, since it would take away one of their primary tools used to control our lives. “
If the states are sending all the money to the Federal government anyway how is that so?
You wrote: ““The States would collect the sales taxes and forward to the federal government. Congress of course is very reluctant to pass this, since it would take away one of their primary tools used to control our lives. “
If the states are sending all the money to the Federal government anyway how is that so?”
In contrast, a simple sales tax is just that. One percentage that applies to sales, with no withholding taxes, no social security taxes, no tax returns, and no need to hire an accountant or tax lawyer. Unlike our current mess, the FairTax does not tax production, and it encourages investment and savings. The FairTax is on consumption, so people can control the amount of taxes they pay. Plus, the prebate system ensures that lower income people will pay no tax at all. Those with high income and significant assets will pay a greater share of the national retail sales tax simply because they spend more.
Please read the Fairtax book. The income tax is more a means of screwing enemies and rewarding political supporters than a system designed to raise revenue.
Uh, didn't we beat up on the Japanese to do exactly this with auto production? They complied and still managed to compete with US auto producers (keeping in mind they had no legacy costs).
If the Japanese government had had a similar "outsourcing" law to the one being proposed by Obama, they would not have been able to take all those profits back to Japan to be taxed.
(1) It takes months to amend the Constitution to repeal the 16th, I want to see the 16th repealed before anyother replacement tax is passed (please spare me the BS that the FairTax bill automatically repeals the 16th you can't "automatically" repeal an amendment)
(2) Taxes aren't the problem, it's the spending. I'd rather reduce the size of government and then work on the tax code.
(3) Prebates and other incentives to "the poor" are a scam and pretty soon the Fairtax will be riddled with loopholes and credits just like the income tax. Have a 10% sales tax on ALL new goods and services sold in the U.S.
(4) Stop being disingenuous by calling it the FairTax. Call it a Federal Sales Tax so people will know up front
In every situation, throughout human history, higher taxes, tariffs, and other government regulatory burdens result in lower production, companies relocating, higher unemployment, and ultimately lower tax revenues.
Obama’s higher taxes (including cap & trade and letting the Bush tax cuts expire) will result in lower GDP, more unemployment, and lower tax revenues. In fact, Obama’s higher taxes will kill any recovery that gets started and lead to more than 15% unemployment here in the United States. This will in turn make the national debt far far greater than now (currently equal to $37,000 for every American citizen). And it will cause hyper-inflation. The United States will be an economic disaster if Obama’s plans are enacted by his Socialist Congress.
Conclusion: investing in the United States, whether it be U.S. government bonds, state and municipal bonds, or domestic equities, is Extremely Risky. Capital will flee the United States.
I suggest going to www.fairtax.org and reading the facts. It’s all there, concise and easy to understand.
The FairTax would make our taxes totally transparent, leaving Congress very little room to manipulate without public uproar. The current federal income tax system is a tool Congress uses to confuse and cheat us. The prebates are real, to be paid monthly to everybody, not just low income people. The FairTax DOES in fact apply to all new goods and services. Repeal of the 16th amendment is part of the picture; I didn’t say anything about repeal being “automatic”.
We may get to the point, with Obama’s National Socialism, when the States call for a Constitutional Convention, to restore the rule of law.
“We may get to the point, with Obama’s National Socialism, when the States call for a Constitutional Convention, to restore the rule of law.”
Won’t never happen. Forget about it.
Reason[s]: Two actually three but one and two go together
1. The States are addicted to Federal Matching Funds.
2. the politicans that run the States are linked to those that run the Nation
3. And last but not least, most “Americans” thav lost their thirst for freedom and would prefer to live as slaves.
Reason number three , not obama, not the Democrat Party, not the main stream media is why we are where we are today as a Nation. And it will only get worse.
“We may get to the point, with Obama’s National Socialism, when the States call for a Constitutional Convention, to restore the rule of law.”
Won’t never happen. Forget about it.
Reason[s]: Two actually three but one and two go together
1. The States are addicted to Federal Matching Funds.
2. the politicans that run the States are linked to those that run the Nation
3. And last but not least, most “Americans” thav lost their thirst for freedom and would prefer to live as slaves.
Reason number three , not obama, not the Democrat Party, not the main stream media is why we are where we are today as a Nation. And it will only get worse.
I agree with all your points except this one. There's no need for the rate to be at 23%, which is way too high. I'd settle for the 10-15% range with no deductions, credits, or "prebates" to anyone.
The problem isn't even spending, but as you astutely point out the size of the government, not measured in dollars, but in control.
Government is political by its nature and movements to expand the voting franchise beyond its Constitutional bounds simply compound the problem and encourage populism.
Populism then leads to the notion of something for nothing, which politicians exploit to reward friends and punish enemies all the while keeping a firm grip on power.
Unless and until we unravel the governments tentacles from our daily lives, there is no cure or fix.
You are simply grinding against the ocean of natural human behavior - self-interest.
Your reason #3 (thank you government schools) is spot on, sport!
Keep in mind that the 23% retail national sales tax replaces all federal income taxes, corporate and personal, the estate tax, Socialist Security taxes, and Medicare/Medicaid taxes. It is only on new goods, not used, so people can save by buying a used car or used furniture (for example). I’d settle for no prebates too, but it is a way to address concerns about those with low incomes paying the federal sales tax.
Quote:
http://www.whitehouse.gov/blog/09/05/04/Continuing-the-Conversation-Tax-Reform-for-American-Jobs/
THE BRIEFING ROOM • THE BLOG
Tuesday, May 5th, 2009 at 9:48 am
Continuing the Conversation: Tax Reform for American Jobs
Yesterday, even before we posted here on the blog about the President’s proposals to curb offshore tax havens and end tax incentives for companies shifting jobs overseas, we asked for your reactions on our various social networking outposts. As we expected, there were a lot of interesting comments and questions, largely supporting the President but some raising concerns and objections. We asked Jason Furman, Deputy Director of the National Economic Council, to address some of them:
kylekunkler: Ending deferral (when US already has 2nd highest corporate tax) will only hurt US MNCs and cost jobs! http://tinyurl.com/coofnd
Jason Furman: Kyle, you are correct that the United States has the second highest statutory tax rate in the world, the official rate published in the tax code. But the United States also has more loopholes and special tax preferences than many other countries. As a result, the United States has a much lower effective tax rate. If you look at corporate taxes as a share of GDP they are below those of most major economies. The result is a tax code that is complicated, inefficient and unfair. One of major causes of these problems is the way that we tax – or more often do not tax – the foreign earnings of American companies. The administration’s plan is intended as a major, first step in addressing this problem.
ScottGjerdingen: What sort of jobs would be impacted by Obama’s “offshore jobs” corporate cutback on tax benefits?
Jason Furman: Scott, you ask an important question of what jobs would be affected by the President’s proposal. In answering it is important to look at both halves of the proposal. One half is to end special tax preferences for creating jobs overseas. The goal of this is not to stop American companies from competing and succeeding in the global economy. What the President wants is to stop giving them special subsidies for doing so – subsidies they would not get for investing in the United States. The result will be to shift more investment and job creation to the United States. The second half of the policy is to take these savings and use them to cut taxes in businesses that create jobs in the United States by making the tax credit for research & development permanent. The direct beneficiaries of this policy will be companies engaged in research and development, but the innovations that result will have important spillover effects, creating jobs and raising wages across the economy.
Marc Solomon: Bringing jobs back to the US by switching tax incentives from creating jobs overseas to creating jobs in the US is a wonderful idea. My concern is, if the goal is to make our tax laws fairer and simpler, this accomplishes only the first and not the second (and of course that assumes fairer means fairer for US citizens and not for all people of the ... Read Moreworld). Wouldn’t just removing the tax incentives for creating jobs overseas accomplish BOTH goals and not just the one? It would definitely simplify the tax laws and be fair for all people, not just U.S. citizens (although, personally, I am prejudiced to being fairer for U.S. citizens).
Jason Furman: Marc, you should understand that today’s announcement is a down-payment on the President’s overall tax agenda. As he said in his remarks today, “the steps I am announcing today will help us deal with some of the most egregious examples of what’s wrong with our tax code and will help us strengthen some of these other efforts. It’s a down payment on the larger tax reform we need to make our tax system simpler and fairer and more efficient for individuals and corporations.” That said, the proposals the President made today would start to simplify the tax code. This includes the President’s proposal to reward companies that create jobs in America – which would make the research and development tax credit permanent, adding more predictability and stability to the tax code because companies would no longer have to worry about whether or not the credit would expire or continue.
I’m wondering...how does this overseas tax affect show bidness? When movies sell tickets overseas, are they going to have to pay more taxes?
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