Let's get down to business...

I thought I'd jot down a quick thought I had at work on Thursday. I was watching a clip about Barack Obama and he was going on about his desire to punish companies that ship jobs overseas (because that what his rollback of tax breaks amounts to) and give tax breaks to companies that create jobs here. Here in lies another example of the contradictions that exist in Barack Obama's platform. But first a few facts:

1. According to the Tax Foundation, the average combined state and federal corporate tax rate in the United States is 39.3 percent. That national average gives the U.S. the second highest corporate tax rate among countries that are part of the Organization for Economic Cooperation and Development. Japan is slightly higher at 39.5 percent.

2. The state corporate tax rate is (obviously) determined on a state level. When looking at each state individually, 24 states have a combined state and federal corporate tax rate higher than Japan. In this case, the highest corporate tax rate is Iowa at 41.6 percent!

3. Federal corporate tax rates are highest on those corporations making between $100,000 and $335,000. Those companies at taxed 39 percent!

4. John McCain has proposed reducing the Federal corporate tax rate to 25%.

5. Barack Obama hasn't. He has said that he will broaden the corporate tax base (increase the number of firms that have to pay taxes) and then reduce the tax rate for companies that create jobs in this country.

Firstly, it's absolutely absurd that the United States has such ludicrously high corporate tax rates. It's no wonder companies are looking to move operations overseas. I wouldn't want to pay the government 2/5 of what I make. It's a tribute to the skill and tenacity of American corporations that they are able to be as profitable as they are given the current tax situation. Secondly, how would effectively increasing taxes on companies make them bring jobs back? Somehow, that doesn't seem like it's going to work. At all. Nor should it. It's stupid and counter-intuitive. Companies aren't going to bother.

Side note: Companies don't send jobs overseas out of spite. They do it because they can get the job done to an equal or higher standard at a lower cost abroad. Last time I checked,
that's what running a profitable business is about. Just thought I should clarify...

Thirdly, it's another example of Barack Obama promising things that reality isn't going to allow him to deliver. He ought to know better...and so should the American people. Lower corporate taxes across the board, keeping personal income taxes low, and reduce government manipulation of the market and I think the economy will begin the process of recovery.