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Posted: 10/28/2004 3:05:44 PM EDT

Kerry is correct when he says the US tax code creates an incentive to move jobs overseas. But that's not Bush's fault, as Kerry and his supporters often say.

For example, see this Media Fund ad claiming "Bush's policies encouraged the loss of nearly 3 million jobs."

In fact, tax experts say the incentive has been there for decades - since there has been a corporate income tax. It's not Bush's doing.

The incentive exists because the US taxes corporations at rates higher than most other countries. According to the Institute for International Economics, the effective rate for US corporations was just over 30% in 2002, while mainland China's effective corporate rate was only 11.3%, Britain's 18.2%, Mexico's 15.1% and Indonesia's a miniscule 0.2%.

Furthermore, the US also attempts to tax money that US-based companies earn in other countries, but only after those profits are brought back to the US. That means profits that remain overseas, perhaps invested in new factories in low-tax countries, never get taxed at the higher US rates. And that's been true through both Democratic and Republican administrations.


We say we are, yet we tax the hell out of corporations.
Link Posted: 10/28/2004 3:42:31 PM EDT
There are only two basic ways the U.S. Government “makes” money. The Gov’t prints it or they tax it from individuals and businesses. Kerry’s problem (Any politicians problem for that matter) is as long as the politicians keep making promises and fulfilling those promises with tax payers money there will be no end to their desire to take more and more from the producers or print more and more money. In the end printing more money just devalues the currency and spawns borrowing more to cover debts.

This “Pro U.S. Business” really boils down to the multi-national corporations wanting to make products in countries with low producing costs and weak currencies to sell those products in the U.S. The dollar in 1946 had an approximate 9 to 11 times more purchasing power than the 2004 dollar making cheaper markets overseas more attractive to produce products to be brought back to the U.S. and bought with a weaker dollar. The theory being this keeps the standard of living up. Though you still need a job better than a service sector (Fast Food) to still buy any product. Even China recently devalued their currency by buying billions of dollars worth of U.S. Debt and keeping the demand for their own currency down 40%.

It is truly not in the best interest of any politician to rock the boat but instead keep the economy bumping along in a short-term method of giving cheap product to a population with a devalued dollar. I personally find this despicable because we are potentially having our future stripped from us. Neither Kerry or Bush or going to squat short of (Bush) tax breaks.
Link Posted: 10/28/2004 3:44:26 PM EDT
Well the more money thats printed the less it is worth. And the answer to your question depends on who winds the election on Tuesday.
Link Posted: 10/28/2004 3:53:05 PM EDT
One think worth noting is that you can't actually tax a corporation. Well, you can, but the reality is that the corporation has to pass the tax on to consumers, employees, or investors. All taxes are paid by individual citizens.

So "corpoorate taxes" really amount to hidden income taxes, sales taxes, or capital gains taxes. And of course, they also drive down compeatativness of taxed corporations relative to nontaxed ones, typically hurting domestic companies more than forign ones.
Link Posted: 10/28/2004 7:08:07 PM EDT
There are ways to solve the tax problem but everything I have read by economists indicates Kerry's "solution" will make things worse.

Link Posted: 10/28/2004 8:50:25 PM EDT
Good point. Taxes are an expense that finally gets passed down to the buyer. Just like the costs of a politicians promises / tax wrath.
Link Posted: 10/28/2004 9:04:35 PM EDT
the government used to get by on tariffs...
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