[speedgibson] Speed Gibson: Structural Sacred Cows 5

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Posted by Speed Gibson:
Structural Sacred Cows 5
http://speedgibson.powerblogs.com/posts/1236821366.shtml


   Moo-ving right along with Gregg J. Cavanagh's list of the sacred cows
   of Minnesota spending, it's time to look at the revenue side.
    1. Cut the size of the Legislature.
    2. Eliminate the education monopoly.
    3. Turn off the welfare magnet.
    4. Place a moratorium on light-rail projects.
    5. Reduce or eliminate the corporate income tax.
       "Minnesota has one of the most burdensome corporate income taxes
       in the world. This tax discourages businesses from staying or
       locating here. Corporations employ people, and people pay income
       and sales taxes. The reduction or elimination of the corporate
       income tax would likely increase overall state revenues."
    6. Outsource whenever possible.
    7. Repeal the prevailing wage law.
    8. Ban project labor agreements.
    9. Stop trying to run everything.

   Prime Minister Pawlenty is already promoting this idea, based on what
   appears to be some pretty good research by his task force. Our rates
   are high and I doubt few would argue that high corporate tax rates
   draw, keep or create more business in Minnesota.
   I'm really not swayed by the argument that lower rates would bring in
   more revenue per se, even though it's likely true. I think the ideal
   corporate income tax rate is zero for the simple reason that
   corporations don't pay taxes. They only collect them, and
   inefficently.
   If you have any corporate headquarters experience, you've seen the
   people, desks, square feet, office equipment, and paper involved with
   preparing state income tax returns and issuing checks. The Department
   of Revenue has similar expenditures in processing those returns and
   managing the receipts, not to mention the auditors both sides hire.
   And none of this produces anything valuable, like food, clothing,
   shelter, transportation, education, or entertainment.
   Direct taxation of the people for the equivalent amount avoids almost
   all of this. When hidden via the corporate income tax, we pay this
   extra overhead. It's like we're paying for our own deception.
   The one remaining "yeah, but" is progressivity, if that's truly a
   word. Many assume that the corporate income tax falls on the upper
   class, but I'd argue that it's in fact regressive, disproportionately
   falling on the lower class. As I said, corporations only collect
   taxes, either from customers (higher prices), employees (lower wages,
   fewer jobs), or investors (your 401K). McDonalds makes their millions
   one Happy Meal at a time.
   One of the most flaming liberals of my acquaintance readily agrees
   that the corporate income tax is regressive, pointing to the State's
   tax incidence data that estimates who pays all the indirect taxes.
   (His solution is to make the individual tax still more progressive to
   compensate!) In doing a few Google searches, the jury seems out on
   this, that the corporate income tax is somewhere between regressive
   and neutral, but not progressive.
   I like simple and the lower costs it brings. I like honest and the
   transparency it brings. Eliminating the corporate income tax is a step
   in both of these directions.