The Problem with Corporate Tax Reform

The ideology of governance has it dead wrong and regardless of the history that proves the error it appears that in an effort to restore a modicum of civic-centered action the GOP is at risk for legislating ignorance, again.

Here are the most critical reasons why the idea fails so proficiently:

(1) Using taxpayer dollars to incentivize an economic activity has never worked (“cash for clunkers”); funding corporate economic activity was once the function of banking and the stock market.

(2) Corporations do not create economic activity; they respond to demand backed by liquidity (capable of payment or trade of some kind).

(3) To favor the corporate form is to penalize the component of the market that creates demand and further encourages disparate corporate actions that distance the economic cycle from its roots (example: GE investing in and relocating to China).

(4) Ignores the obligation of an economic concern’s responsibility for being an active investor in the economic infrastructure it draws from (the use of so-called Trade Agreements has incentivized the exodus from this most important vehicle).

The reason Middle-America is disappearing is directly related to these 4 issues (there are others) and so to begin rebuilding a U.S. economy you must first reverse the effects of each of them. There is a massive, unspoken, and yet thoroughly over-abused value in the U.S. Domestic Market and to believe that pure consumption is equivalent to Economic Output is to ignore the facts.

The more appropriate approach is to completely vaporize the current Revenue Code relating to Corporations and place a simple “flat tax” on gross operating revenues and incentivize corporations with one simple lure that has explosive potential for the Domestic Market; provide a “flat tax discount” based on that company’s portion of  “gross operating revenues” generated directly from domestic production/sourcing.

Now this is how you create jobs that do not rely on the lunacy of the insurgent minimum or living wage malignancy; this is how you fund government. We must not allow the logic that suggests that “feeding upon oneself expands ever-feeding” to persist. All this illusion creates is predatory cannibalism which, by the way, seems to explain this Nation’s Immigration Policy; expanding the crop upon which the system can feed.

Curtis C. Greco, Founder

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