Higher Taxes-Bad for the Economy, Bad for Business

• The U.S. Government seems to think they can solve our debt problem by creating more debt. Monetizing government debt is what third world countries do. Today in Zimbabwe, for example, the government has printed so much money that the smallest denomination bill you can own is $1 billion – enough to buy a single loaf of bread!
• There is convincing empirical evidence that the rate of inflation is directly tied to the growth in Money Supply. In other words you cannot simply turn on the allegorical printing presses to create “vapor paper” without ominous consequences.
• If dollars were as available as sand on the beach, how valuable would they be? The more you have of something the less it is worth. Nothing too complicated about this. A devalued currency reduces your buying power as inflation soars. It is a form of stealing from you.
• The last thing an uncertain U.S. economy needs is a large tax increase. For businesses, especially small and medium size, a tax increase in this economy could push many companies into bankruptcy.
• It does not matter if our taxes were quadrupled; there is not enough money in America to bring redemption to the multitude of social problems inflicting our world. The solution is an expanding tax base. Consider this. Nearly half of our states when combining federal and state income taxes already lead the world in the highest corporate tax rates of any industrialized country. If Iowa, Pennsylvania and Minnesota were countries they would be the top three highest taxed in the world. Massachusetts, Alaska and New Jersey would be four, five and six.
• If you had to put your finger on the best way to expand America’s tax base, it would start with reversing our trade deficit. Our trade deficit is once again tracking to exceed $800 billion. It is widely believed that market barriers, manipulations and distortions cost the United States $500 billion annually. I personally believe it is much more.
• The corporate taxes paid on these lost sales assuming a 12% pre-tax income and a 40% federal and state combined tax rate would be $24 billion per year. The U.S. may have a lost a step or two as the world’s leading economic power, but when it comes to taxing our corporations until they flee our shores and taxing the rich until there are rich no more, America is clearly at the front of the line.