May 28 letters

May 28, 2014

Is our corporate tax code our economy’s worst enemy?

To the editor:

Our extremely outdated tax code has kept us from starting a real (privately funded) stimulus program that would create a huge increase in jobs as well as a major increase in industry within our own borders. The action I describe below combined with a fast track to energy independence could cause economic growth like we haven’t seen for many years.

American companies have been forced to leave profits earned overseas sitting in banks outside the U.S.  The total of these funds are being reported to exceed $1.3 trillion, from only 66 companies.  As it stands now, if the companies bring those funds home to invest in America, the US federal tax on those funds would be in the area of 40 percent.  As a result, the funds stay out of our economy.  If we would allow these companies to bring these monies home with a drastically reduced tax rate and an agreement that the companies would use a great portion of this money to invest in the expansion of their companies and work force, it would result in a massive privately funded stimulus instead of one funded by debt that is borrowed from future generations.  An accelerated depreciation schedule should be offered to encourage the purchase of industrial equipment, computer systems and company infrastructure.  This would be an actual stimulus to the economy as well as create thousands of jobs. If these companies were given the opportunity to bring the money home with a onetime 10 percent tax, it would not only spur the economy, increasing dividends to shareholders and consequently retirement funds, but would also create $130 billion dollars in government revenue which should be earmarked to reduce the national debt.

Would we prefer $130 billion in U.S. debt reduction or leave the money invested in the European economy, helping them to make us even less competitive?

Bruce Gardner

Waynesville

Editorial on tourism study was off-base

To the editor:

This is in regard to your editorial May 23, “Reputable think tank muffed tourist tax study.”

You characterize the John Locke Foundation (JLF) study on occupancy taxes in Haywood County as being “anti-business,” and Rep. Presnell’s position on the issue is characterized as “obstructionist.”

I do not presume to speak for JLF though I am familiar with their stance on this issue.  I also bring to this discussion personal experience from prior service  with the Jackson County Travel and Tourist Authority.

For JLF, the primary issue is obviously the role of government.  Your editorial quotes from  JLF’s tax study: “Taxation is justified only for necessary purposes of government.  Tourism promotion is not a necessary function of government . . .”

The tourism industry in Haywood or any other jurisdiction is free to use its financial resources as it sees fit to advertise and promote its facilities and services.  Chambers of Commerce and various trade organizations are examples of associations in which businesses are free to join or avoid.  However accommodation /tourist taxes compel certain businesses, usually motels and short term cottage rentals, to collect the tax.  How the collected tax money is spent is another matter.

My experience in Jackson County reinforced my conclusion that politics, where the most powerful factions control the money, can not be removed from the process.  I have no reason to believe it is different in Haywood.  Accommodation owners who disagree still have to collect  the taxes or face fines and penalties.

This is why the issue of the proper function of government is so important.

To point out such issues is not to be anti-business.  It is a recognition that business prospers best when its entanglements with government are minimal.

As for Rep. Presnell being an obstructionist:  I also do not presume to speak for her either, though I am familiar with her concerns in increasing an occupancy tax. She has made many efforts to talk with persons in our community about this issue.   To express reservations or ask questions about a tax increase is not obstructionist.  It is good government.

Kirkwood Callahan

Waynesville

Comments (12)
Posted by: Joe Vescovi | May 28, 2014 14:12

Sounds good but we tried it in 2004.  What did the companies do once they got their money back in this country?  Bought back their stock, increased their dividends, acquired other companies AND within two years started again stashing their incomes overseas (waiting for the next tax amnesty).  That can be seen by them now having over $1.3 trillion dollars again off shore.

If you could assure me the money would go for job creation and all the other good things this country needs now I would be for it.  But from what the companies have done in the past and present I don't trust they will do anything but line their own pockets.  History has shown that.



Posted by: Scott Lilly | May 28, 2014 14:36

"waiting for the next tax amnesty" -- What if the corporate tax rate was permanently lowered instead of a one-time temporary thing?  Would companies then choose to keep the money here?  Would WE then be the country where all the world wants to invest and stash their wealth?



Posted by: Charles Zimmerman | May 29, 2014 08:56

     There is a very good accounting here:

http://triblive.com/news/2126360-74/tax-money-accounts-taxes-countries-financial-hide-billion-china-global#axzz330npZf2Y

 

            We the people are not bound to compete with tax rates of other countries. We are bound by OUR Constitution which requires "equal protection". No other country requires this. Equal protection requires taxes to be applied in a progressive manner to prevent oppression. It also provides a stable climate to invest. Individuals/businesses who hide money to avoid taxes are committing a crime against US. Baine Capitol is a prime example of tax shelter use. This criminal avoidance needs to be punished. Not just a slap on the wrist like Mrs. Mitt got, either. Prison terms. Confiscation of tax shelters, assets, businesses. No more "too big to jail".

              According to the above article, money held in tax shelters amounts to about twice OUR yearly gross output. Generally speeking a dollar changes hands 9 to 16 times. If this money was redistributed from the bottom up, just think how much good it would do. Poor folks spend money, while those with excess do not.

               

               C.Z.



Posted by: Scott Lilly | May 29, 2014 09:36

"Economic freedom" means in part that you get to do anything you like with your money.  If there are places to put money that is "better", economic freedom allows that.  What should not be allowed is exploitation of loopholes that allow earnings not to be taxed.  Knowing how global businesses work, it's easy/smart to shift costs to high tax areas to avoid profit that will be taxed more.  One way that might work is if a global company needs to buy a machine to process electronic orders, that machine might be purchased in the United States therefore reducing the profit on the US side.  The foreign side of the business will appreciate the US side giving them that capability -- but since they did not buy that machine overseas, they have more profit overseas.  There's nothing illegal about that -- just smart business.



Posted by: Charles Zimmerman | May 29, 2014 09:46

              US currency is owned by WE the people. We the people by the means of OUR Constitution decide how OUR money is used.

              There should be no "loopholes". A loophole is simply speeking a favour granted at another's expense.

               We the people have no control over so-called global businesses, except what they do here.

                When the full aspects of The UN. Universal Declaration of Human Rights is adopted and/or an enforcing body is created to protect US from violators, We will remain at risk, except that We are still the most stable economy.

 

             C.Z. 



Posted by: Scott Lilly | May 29, 2014 09:58

"We the people have no control over so-called global businesses, except what they do here." -- That's my point.  We the people have created an environment where "they" want to do as little here as possible.  Make it more attractive to do business here and "they" will do more of it -- profits included.

 

If/When there is a New World Order that can enforce a global standard of human rights and equal pay, our economic model will have to change.  Things would then start to be what more would consider "fair".  It would take nothing less than all out world war to even suggest that idea could start to blossom.  So until then, I'm sticking with "economic freedom" and competing on a global scale to our advantage.



Posted by: Charles Zimmerman | May 29, 2014 13:24

             Those that want to compete on a global scale without compliance of OUR Constitutional mandates should not reside here! That is a huge problem. US citizens/businesses while enjoying OUR freedoms would choose not to pay for OUR adequate support to continue. They are not just criminal that do so. They are traitors. Economic terrorists!

                There is a price to pay to support the cause of Liberty that requires "All persons" to pay in proportion to what they earn, for Liberty and its equal protection to continue.

               

                    C.Z.



Posted by: Scott Lilly | May 29, 2014 13:56

"There is a price to pay to support the cause of Liberty" -- Put one man on an island by himself.  He has liberty -- and it costs nothing.  Men have inalienable rights to life, liberty, and the pursuit of happiness.  Government does not provide us liberty and therefore cannot charge us for it.



Posted by: Charles Zimmerman | May 29, 2014 15:41

                   Patriots pay the price willingly.

 

                 C.Z.



Posted by: Scott Lilly | May 30, 2014 15:28

Interestingly, NC is being recognized in a nationwide audience for its success on just this very topic.  ALL of us NC citizens ought to be cheering us on.  If you're not, have an honest discussion with yourself why that is:

 

http://video.foxnews.com/v/3576988864001/can-the-federal-government-learn-from-north-carolina/?intcmp=obnetwork#sp=show-clips

 

 



Posted by: Charles Zimmerman | Jun 10, 2014 10:23

              "faux news" is a highly discredited news source. Their bias is exposed in many websites dedicated to the truth of the matter. Since the ruling whereby Rupert Murdock may tell his employees what to say his will/opinion be done.

              

             C.Z.



Posted by: Scott Lilly | Jun 10, 2014 13:58

I've worked personally for Rupert Murdock.  He's a very good man and does what's right.  Reminds me of my grandfather.  The project was a hotel he had that was not built properly and starting to fall apart.  He had to sue either the architect, the engineer, or the builder.  I saw him put in great efforts (and increased costs) to find out who was really culpable and hold them accountable.  He wanted to be sure not to negatively impact anyone who did their jobs correctly.  That being said, I have no idea how much personal influence he uses with Fox News -- my guess is: not much.



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