A Bad Tax Idea! Why Not Implement FairTax Instead?

From The Chicago Tribune

A bad tax idea

May 9, 2009

Illinois-based McDonald’s, Caterpillar and Boeing make billions of dollars selling their burgers, earth-movers and airplanes around the world. Like other multinational companies located here, they pay U.S. corporate income taxes of up to 35 percent on those revenues only when they ship the money back to the U.S. or pay it out as dividends. Otherwise, the taxes are deferred.

President Barack Obama believes that encourages overseas investment rather than U.S. investment and robs money from the U.S. Treasury. He has proposed to restrict the corporate tax deferment.

Obama this week blasted the loophole-ridden U.S. tax code as one “that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, N.Y.”

The example was strong on alliteration, but weak on logic. India’s corporate tax rate is just under 34 percent, according to the international accounting firm KPMG International’s most recent survey of tax rates. In other words, it’s right there with the U.S. rate. Low labor costs and access to a highly educated population have more to do with the surge in Bangalore jobs than any tax advantage does.

Obama estimated that his tax deferment changes, along with cracking down on individual and corporate tax havens, would raise $210 billion over the next decade.

But why would Obama want to make American companies less competitive in the world?

Most countries don’t tax their companies’ foreign profits — and most have lower corporate tax rates than the U.S. does. The U.S. deferment exists as partial compensation for the different tax treatment by the U.S.

A French company doing business in Dublin pays Ireland’s 12.5 percent corporate tax rate and faces no additional French taxes. The French company can use the profits to build new plants and create jobs in France or elsewhere.

But a U.S. firm doing business in Dublin pays Ireland’s corporate tax rate, and then pays U.S. corporate taxes if it brings the money home for investment or a payout to stockholders. (Essentially, it pays 35 percent to the U.S., minus the taxes it paid to Ireland.) Rather than encouraging multinationals to bring that money home with the lure of lower taxes, Obama wants to hike their U.S. tax exposure.

To be competitive in the international marketplace, many countries in the last decade have cut their corporate tax rates — on average from 31.4 percent to 25.9 percent, according to the KPMG survey.

Obama insisted that he wants “to see our companies remain the most competitive in the world.” There’s a way to do that: Simplify the tax code, get rid of sweetheart loopholes and lower the overall corporate tax rate so there isn’t such a disparity between the U.S. and other nations.

Supporters for FairTax know the only way to be competitive in foreign markets is to do away with the corporate, capital gains and payroll taxes on businesses. Common sense will tell you if companies can be competitive and make a profit they will be investing more in the United States. Corporations will invest by building more or adding on to their business. More businesses means creating jobs in America and will cause American Workers, who will have all of their paycheck, under FairTaxation and with a prebate program, which helps in the necessities of every day living, and will stimulate the economy. Yes American Workers who have money in their pockets will be buying more retail goods and services.

I want you to stop and imagine, when there are more jobs than workers you can get the pay per hour wages you have dreamed about, buy the home you wanted, drive the dream car you always loved, the designer clothing, I could go on and yes it has happen before in this country. Buying American Goods manufactured with “Made in America” by American Workers. When was the last time you saw ‘Made In America” on any product? What happen to all this “good life”, simple 2 words destroyed this idea “Income Taxation”.

If we continue at our present rate of this income taxation we could, by the year 2014, be paying as much as 80% to 95% out of our pay checks to income taxation. Yes you could maybe taking home 20% to 5% of what is rightfully yours as you give all your other pay to the government for income taxation. How much do you think you will get back from the IRS yearly, of all that you gave up that was your money in the first place to pay for income taxation?

That is 5 short years from now at the present rate by economist who are studying, that is going on today.
What are you going to do about it? Are you going to continue to “work for the Government’s Taxation System (Income Taxation)” as Karl Marx stated in his 1848 book “Communist Manifesto”. Remember economist in this country have stated this could be happening today and above is the news article you just read. It is happening and if you could stop it before it is too late.

This is OUR Country, it is OUR Constitution! Don’t wait for the government to take it away from all of us.
Remember in Washington, these people work for US, so CALL your Senators and Congressman. Call on your President now and tell them STOP raising taxes now, get involved, and implement FAIRTAX!

Thank You

Charlie Prochaska
Volunteer Ga 2 District Director AFFT
GFFT Director of Media Relations and Communications