You know who the biggest winners would be? Wage earners. That’s right. Corporations don’t pay taxes. They merely collect, and then pass on the tax cost in the form of lower wages and higher consumer prices.
Want to maximize wages? Forget the minimum wage and embrace corporate tax reform.
Know which European country has the fastest growth rate right now, at 3 percent? Great Britain. And the Brits have a 20 percent corporate tax rate. Compare that to our 35 to 40 percent rate.
It’s no secret why corporate profits are going overseas, and thus destroying American jobs at home. High corporate tax rates.
I go back to the work of Laurence J. Kotlikoff, economics professor at Boston University. In his models for the elimination of the U.S. corporate tax, the real wages of unskilled and skilled workers rise by 12 percent, real GDP growth increases 8 percent, and capital investment soars 23 percent.
In other words, significant U.S. corporate tax reform would jack up wages and jobs — predominantly middle class wages and jobs. It would attract investment from all over the world. And to U.S. companies that shelter profits overseas, we’d be able to say, “Come home to America.”
The growth impact of significant corporate tax reform would also drive up the value of the dollar and allow the Federal Reserve to normalize interest rates much more quickly. That, by the way, was the Reagan policy. It worked for two decades, producing nearly 45 million jobs and a roughly 4 percent wage growth.
Lower tax rates and King Dollar. It’s a recipe for prosperity. Will any of you Republicans who claim to be Reagan followers make that case? Where is your Reagan economic voice?
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