President Donald Trump and Republican leaders from both houses of Congress are about to undertake the challenge of designing tax reform legislation that can be passed and signed by the president. The concept of territorial taxation is a key idea that should certainly be included in the reform package to create new jobs and boost wages for U.S. workers. This is a key opportunity for President Trump to fulfill his campaign promise to improve the economy for the forgotten middle class Americans who propelled him into the Oval Office.
The U.S. imposes not only the highest top marginal tax rate in the developed world, but also heavily burdensome taxes on international business income. Our tax system deters companies from being headquartered in our country, trapping large amounts of corporate profits overseas. The compliance costs of our tax code are excessive and create huge distortions of economic activity. Key reforms to these aspects of our tax system would lead to economic growth and the creation of many, many new jobs for the American people.
Taxing corporate income on a territorial basis would levy the taxes on income earned within the borders of the country where that income is earned. This avoids the double taxation of the worldwide approach, where corporate income is taxed both on where the income is earned and where the corporation is headquartered.
As the U.S. still largely uses the worldwide taxation system, many countries around the world are changing to taxation on a territorial basis. If the U.S. also does this, it would free up about $1.7 trillion currently trapped overseas. This income could be invested in the U.S. economy, creating many new jobs. Just that change alone in our tax policy would have great benefits to the American people.
While some claim that territorial taxation will increase overseas investment, most economists confirm that the combination of foreign and domestic investment has a synergistic relationship that helps create strong domestic economic growth. Economics studies of countries that have adopted territorial taxation confirms this is true.
It is easy to make a populist argument about worldwide economics based on a zero-sum view, but it is quite myopic to do so. Increased investment, both foreign and domestic, is very much that “rising tide” that “lifts all boats” as referenced by President John Kennedy. That rising tide will help create millions of jobs for Americans. The increased activity that will result from territorial taxation will also increase the revenues obtained from corporate taxes.
Under territorial taxation, corporate income would be taxed in the country where it is earned, and under the version proposed by Rep. Dave Camp (R-MI), the Chairman of the House Ways and Means Committee, 95 percent of foreign income would be exempt from double taxation. Tax policy should be neutral in its effect on how business make investment decisions, a key concept that would be true of a system of territorial taxation. In truth, worldwide taxation decreases investment.
A territorial tax system would increase investment by U.S. companies, allowing them to be more competitive around the world. Eliminating U.S. taxes on foreign earnings would free up that income to be brought back to the U.S., which would also increase investment in our economy.
The benefits of implementing a territorial taxation system should make it a no-brainer for Congress and President Trump. This system should undoubtedly be used because the American people will be far better off as a result.
Edward Woodson is a lawyer and now host of the nationally syndicated Edward Woodson Show, which airs daily from 3 to 6 pm EST on gcnlive.com.
Deranged Democrat Demands Prosecution of 40,000 Trump Supporters Who Were OUTSIDE Capitol
Guilt by association.
Texas Democrat Sheila Jackson Lee implied that every protestor who was outside of the Capitol on January 6th should face criminal prosecution in a Tuesday tweet threat, utilizing a “guilt-by-association” theory more commonly associated with the criminal justice system of third world countries.
Jackson Lee falsely claimed that the 40,000 protestors who arrived in the area of the Capitol in January all intended to overturn the election by killing the Speaker of the House, Mike Pence, and Members of Congress. In reality, there’s little to no reason that anyone outside of small handful of easily manipulated cosplayers intended to become seriously violent.
2/4 alleged that 40,000 protesters were in DC with the mindset to overturn a legitimate election and to kill the Speaker, the Vice President, and Members of Congress, in that instance, only 300 persons have now been arrested and are being prosecuted. What kind of justice is that?
— Sheila Jackson Lee (@JacksonLeeTX18) March 3, 2021
Only a small minority of the protestors present at the January 6th protest engaged in any criminal trespassing and violent conduct. Peaceful protestors present at the event in fact urged those breaking boundaries to stop, likening them to Antifa criminals. Hundreds of individuals present at the event are being prosecuted- in some cases, on dubious grounds. Jackson Lee’s proposal would criminalize peaceful protest in a direct fashion.
Jackson Lee compared the peaceful protestors to Portland’s enduring anarchist criminal movement, ignoring that the January 6th event hasn’t repeated on a nightly basis in a fashion analogous to the anarcho-tyrannical city. While street criminals have been arrested at the Portland protests, Multnomah County’s left-wing prosecutor, Mike Schmidt, has consistently dropped criminal charges against nearly every arrestee involved in left-wing street violence.
1/4 Testimony today on the Hill evidences that in the Portland protests, a thousand people were arrested. People protesting against the violence that was evidenced in the George Floyd murder. People wanting good things to happen. In Washington DC on January 6th, where it is
— Sheila Jackson Lee (@JacksonLeeTX18) March 3, 2021
Lee also likened left-wing rioters in Portland to “good people wanting good things to happen,” excusing systemic violence because she supports the aims of those who commit it.
Under the fist of anarcho-tyranny, there is no such thing as a neutral standard of “law.” There’s domination- impunity for those who obey those who wield the levers of political power, and severity against those who dare to challenge it though peaceful protest.
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