From the testimony of the Tax Foundation's Vice President for Economic Policy Robert J. Carroll before the Senate Finance Committee this week:
...[F]undamental tax reform has the potential to reduce the compliance burdens imposed on both households and businesses, and at the same time create an environment for greater economic growth in the long-term in a manner that is appropriately fair.
A fundamental issue...[is] the choice between income-based and consumption-based taxes. Consumption taxes generally reduce the tax on saving and investment, and... [will] boost economic performance and living standards in the longer term, in a way that retained the current progressivity of the tax system.
...[R]eforming the corporate income tax is becoming more urgent as our major trading partners around the world take the initiative.
Tax compliance (not taxes, just the paper work they create) costs small businesses more than $1,300 per employee per year. That is $26,000 for a small business with twenty employees that could have gone to adding another employee or expansion.
The corporate tax levied by most states in the US is higher than the corporate tax rate of country of France. Even socialist nations are finding the benefits of lower tax rates for their economies.
But, there is no relief in sight for those of us in the US. None of the three remaining Presidential candidates have real tax reform or tax cuts in their platforms. All three include policies that will significantly expand government, and in turn, will create the need for higher taxes to support their new initiatives.
Not only are jobs going overseas, but so are the entrepreneurs we need to help transform our economy. We have always benefited from the entrepreneurial spirit of our immigrants. More and more immigrant entrepreneurs are finding that they can find more opportunity in their home countries.
Bad news all around for the long-term outlook for this entrepreneurial economy.
