tag:blogger.com,1999:blog-58051959814849522882024-03-21T16:30:30.775-07:00Shared Economic GrowthA proposal for progressive tax reform to bring jobs home to America and reward workers and savers rather than speculators and CEOsSharedGrowthhttp://www.blogger.com/profile/14044657568079494971noreply@blogger.comBlogger17125tag:blogger.com,1999:blog-5805195981484952288.post-85325439826386640042019-07-12T11:51:00.000-07:002019-07-12T13:35:21.148-07:00Shared Economic Growth - A Proposal for Tax Reform, lead page<style>@font-face {
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<span style="color: navy; font-family: "franklin gothic medium"; font-size: 24pt;">SharedEconomicGrowth.org </span><span style="font-family: "franklin gothic medium"; font-size: 12pt;"></span></div>
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<span style="color: navy; font-family: "franklin gothic medium"; font-size: 13.5pt;">A proposal for smart tax reform</span><span style="font-family: "franklin gothic medium"; font-size: 12pt;"></span></div>
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<span style="color: navy; font-family: "franklin gothic medium"; font-size: 13.5pt;">Restoring
America's economy, job</span></div>
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<span style="color: navy; font-family: "franklin gothic medium"; font-size: 13.5pt;"> security, and middle-class market power through smarter, fairer tax policy that favors work over financial speculation</span><span style="font-family: "franklin gothic medium"; font-size: 12pt;"></span></div>
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<b><span style="color: navy; font-family: "franklin gothic medium"; font-size: 12pt;">This
website, which dates back well before the financial crisis of 2008, provides
extensive background from across the political spectrum that explains what is
fundamentally wrong with our economy, and offers a simple, three page piece
of legislation that would go a long way towards fixing it. If you are tired
of a do-nothing government that acts like our problems can't be solved,
please spend some time with this site and encourage others to do the same,
and then to contact their legislators to demand action.</span></b></div>
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<span style="color: black; font-family: "franklin gothic medium"; font-size: 12pt;">Globalization is hurting
a broad group of American workers. Given a choice between
paying U.S. wages and paying workers in a developing country $1.00
an hour, companies are choosing the latter. In some industries this trend
cannot be reversed, but America cannot and should not try to
compete for those low-wage, low-skill, low-value jobs. Trying to do so would
cause us to sacrifice standards that are important to our society, such as
the minimum wage. Instead, we must seek to obtain the promised upside of
globalization: good, new jobs in high-value industries with companies that
can afford to pay U.S. wages.<br />
<br />
But the companies creating those choice jobs are sensitive to tax burdens.
Their profit margins are high, so tax is a major consideration in deciding
where to locate their factories, laboratories, and offices.<b><i><br />
<br />
</i>Unfortunately, instead of tilting the equation in America’s favor,
the outdated U.S.corporate tax system is helping to move those good jobs
offshore.</b><br />
<br />
How is the current system broken? If a U.S. company operates
overseas through a foreign subsidiary, the income from those operations won’t
be taxed by the U.S. until that cash is brought home as a dividend.
Originally designed in the mid-20<sup>th</sup> century to
help U.S.businesses be more competitive, this “deferral” system operates
in our current global economy to provide an incentive for companies to keep
their earnings offshore and reinvest them elsewhere. Why? Because
a U.S. corporation will have to pay a 35% tax on its profits the
minute they hit the U.S. border. So when the U.S. corporation
is considering how best to expand, it considers that an investment of $100 in
foreign operations will have the same net earnings cost as an investment of
$65 in the U.S. In other words, because of the U.S. tax
system, its dollar will go farther offshore. In light of that, where would
you put your factory?<br />
<br />
The U.S. could afford such a system back when it led the world in
technology, wealth, and the education level of its workforce. But we can no
longer afford it. We are now a debtor nation. We have lost much of our
technical lead, and we are no longer able to retain good jobs in the face of
foreign competition. Even companies that staunchly maintain their
loyalty to the American workforce are competing against other companies that
will use cheap foreign labor. Eventually they, too, must fall in line or risk
being acquired by a foreign company that can instantly make their business
far more profitable simply by moving the U.S. operations offshore
and pushing the resulting income beyond the reach of the punishing U.S. tax
laws.<br />
<br />
But what is the best way to correct these skewed incentives?<b><i><br />
<br />
</i>The <a href="http://digitalcommons.pace.edu/plr/vol35/iss3/4/" target="_blank">Shared Economic Growth proposal</a> would fix the
broken U.S. corporate tax system.</b><br />
<br />
How? It’s simple: by providing corporations with an incentive to distribute
their earnings to shareholders in exchange for not being taxed on those
earnings themselves, Shared Economic Growth would
make U.S. operations attractive and would encourage companies to
bring home the cash they have invested abroad. Under Shared Economic Growth,
a corporation wouldn’t be penalized by the tax code for building a plant in
the U.S. instead of offshore. In fact, the U.S. would
immediately become a preferable location over any foreign country that
imposed any tax at all. Shared Economic Growth would provide extraordinary
benefits to the U.S. economy – benefits like encouraging
corporations to invest hundreds of billions of dollars in foreign cash in our
economy, helping to ensure a secure and dignified retirement for American
workers, promoting the efficient allocation of capital, and helping to foster
corporate transparency and responsibility. No other proposal does that.<br />
<br />
</span><b><span style="color: navy; font-family: "franklin gothic medium"; font-size: 12pt;">We invite you to browse this website to learn more about this
exciting proposal. Its time is now.</span></b><span style="font-family: "franklin gothic medium"; font-size: 12pt;"></span></div>
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<span style="font-family: "franklin gothic medium"; font-size: 12pt;">Note1: This site has not yet been updated for the passage of the TCJA, which fubndamentally changed u.S. international taxation by imposing a current U.S. tax on most foreign earnings. However, Shared Economic Growth remains a superior proposal that can be enacted on top of the TCJA structure.</span><br />
<span style="font-family: "franklin gothic medium"; font-size: 12pt;"><br /></span>
<span style="font-family: "franklin gothic medium"; font-size: 12pt;">Note2: The links
contained in this site lead to neutral sources as well as to the writings of
persons and organizations from all parts of the political spectrum. These
are not partisan issues; they are American issues, and they demand a
solution that breaks the bonds of partisan sound bites and draws upon the
most uncommon commodity in politics: common sense.<br />
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SharedGrowthhttp://www.blogger.com/profile/14044657568079494971noreply@blogger.com0tag:blogger.com,1999:blog-5805195981484952288.post-87568721780475257242019-07-12T09:37:00.000-07:002019-07-12T13:34:45.014-07:00Links of interest from across the political spectrum<b>I have retained a number of old items because I think it is useful to note that we at SharedEconomicGrowth.org were predicting in 2005 that American policies undermining our competitiveness would crash our economy by undermining middle class buying power, which at that time was clearly already artificially propped up by unsustainable borrowing. The fundamental trends have not changed since, but they have grown worse.</b><br />
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<b>Select writings by sharedeconomicgrowth.org:</b><br />
<br />
John D. McDonald, <b> </b>Hatch's Integration Plan: Trojan Horse or Reasonable Alternative?<b>, </b>Tax Notes document 2016-17614 (not linkable)<b><br /></b><br />
<b><br /></b>
<a href="http://digitalcommons.pace.edu/plr/vol35/iss3/4/" target="_blank">PACE Law Review article</a> with latest version of proposal<br />
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<a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1106237" target="_blank">Tax Notes article </a><br />
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<a href="http://waysandmeans.house.gov/News/DocumentSingle.aspx?DocumentID=230126" target="_blank">Ways and Means Committee submission</a><br />
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Hearing on <a href="http://waysandmeans.house.gov/media/pdf/111/2010july22_sharedeconomicgrowth.org_submission.pdf" target="_blank">Transfer Pricing</a> <br />
<br />
Hearing on <a href="https://www.hsdl.org/?view&did=721208" target="_blank">THE NEED FOR COMPREHENSIVE TAX REFORM TO HELP AMERICAN COMPANIES COMPETE IN THE GLOBAL MARKET AND CREATE JOBS FOR AMERICAN WORKERS</a>, at page 158<br />
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<a href="http://harvardmagazine.com/2008/11/cambridge-02138.html" target="_blank">Harvard Magazine </a><br />
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<a href="http://www.associatedcontent.com/article/7942051/the_tax_reform_hearings_are_missing.html?cat=3" target="_blank">Yahoo article</a><br />
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<a href="http://www.huffingtonpost.com/matt-lykken/neither-candidate-propose_b_130604.html" target="_blank">Huffington Post</a> on the candidate positions, 2008 <br />
<br />
2005 submission to <a href="http://govinfo.library.unt.edu/taxreformpanel/comments/indexb156.html?FuseAction=Home.ViewPopup&Topic_id=3&FellowType_id=1&Reply_id=3656&SuppressLayouts=True" target="_blank">President's Panel on Tax Reform</a> <br />
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<b>Other's who have expressed similar views</b>:<br />
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<a href="http://www.finance.senate.gov/download/04262016-hines-testimony" target="_blank">Professor Hines</a> in testimony before the Senate Finance Committee, April 26, 2016<br />
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<a href="https://t.co/uK2EgwCQqD" target="_blank">Tax Analysts</a> editorial by Mindy Herzfeld (subscription required)<br />
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Steven Rattner in <a href="http://www.nytimes.com/2014/05/03/opinion/end-corporate-taxation.html?_r=0" target="_blank">NY Times</a><br />
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<a href="https://www.law.columbia.edu/null/download?&exclusive=filemgr.download&file_id=55888" target="_blank">Avi Yonah</a><br />
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<a href="http://www.theatlantic.com/business/archive/2010/10/why-we-should-eliminate-the-corporate-income-tax/65351/" target="_blank">McCardle</a><br />
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<a href="http://www.taxpolicycenter.org/publications/url.cfm?ID=412093" target="_blank">Altshuler</a><br />
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<a href="http://taxvox.taxpolicycenter.org/2011/03/29/should-we-cut-corporate-taxes-by-raising-rates-on-investors/" target="_blank">Tax Policy Center</a> <br />
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<a href="http://www.taxchat.com.au/?cat=52" target="_blank">CCH</a><br />
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<a href="http://www.huffingtonpost.com/sen-ernest-frederick-hollings/the-grand-charade_b_873208.html" target="_blank">Fritz Hollings</a><br />
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<a href="http://www.2pctsolution.com/?p=542" target="_blank"> Douglas Hopkins</a><br />
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Matthew Yglesias of <a href="http://www.slate.com/articles/business/moneybox/2013/04/corporate_income_tax_reform_it_s_not_possible_we_should_just_get_rid_of.html" target="_blank">Slate</a><br />
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Roth & Co. <a href="http://www.rothcpa.com/archives/007349.php" target="_blank">Tax Update</a> blog<br />
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<a href="http://danshaviro.blogspot.com/2011/10/corporate-integration-via-dividend.html" target="_blank">Shaviro</a> (note on his accounting point, that the carryback limitation in the proposal would indeed force pay-outs if managers are to get the accounting benefit.) <br />
<br />
Wage growth continues to languish due to lack of market power, suppressing consumer spending. <a href="http://www.bloomberg.com/news/2014-01-21/wage-gains-elusive-even-as-u-s-job-market-rebounds-economy.html" target="_blank">Bloomberg</a>. Nobel laureate <a href="http://www.project-syndicate.org/commentary/joseph-e--stiglitz-argues-that-bad-policies-in-rich-countries--not-economic-inevitability--have-caused-most-people-s-standard-of-living-to-decline" target="_blank">Joseph Stiglitz</a><br />
<a href="http://www.blogger.com/blogger.g?blogID=5805195981484952288#editor/target=post;postID=6576259062879069966" target="_blank"><br /></a>
<b>Federal Reserve governor on how the decline of middle class jobs in the globalized economy is creating a dangerous drag on our economy</b><br />
<a href="http://www.federalreserve.gov/newsevents/speech/raskin20130516a.htm" target="_blank"><b>May 16, 2013</b></a><br />
<b><a href="http://www.federalreserve.gov/newsevents/speech/raskin20130418a.htm" target="_blank">April 18, 2013</a> </b><br />
<br />
<b>Major employers really do leave the U.S.:</b><br />
<a href="http://www.reuters.com/article/2014/05/01/us-usa-tax-mergers-idUSBREA4003G20140501" target="_blank">Pfizer moves to the UK for tax reasons</a><br />
<a href="http://www.ft.com/intl/cms/s/2/d9b4fd34-ca3f-11e3-8a31-00144feabdc0.html#axzz30rdoUgBr" target="_blank">Understand that these companies will respond to "reform" pressure by moving more jobs abroad</a><br />
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<b>Financial repression is not sustainable</b> - <a href="http://www.terrygrennon.com/wp-content/uploads/2015/04/Financial-Repression-The-Unintended-Consequences.pdf" target="_blank">Swiss re</a><br />
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<b>The advantages of progressive taxation:</b><br />
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<a href="http://www.portfolio.com/executives/features/2007/04/16/The-Pirate-Pose#" target="_blank"> Hedge fund managers</a><br />
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<a href="http://www.ocpp.org/cgi-bin/display.cgi?page=cp0911ProgTaxati" target="_blank">Oregon Center for Public Policy</a><br />
<br />
<br />
<a href="http://online.wsj.com/article/SB118177155165934441.html?mod=hpp_free_today" target="_blank">Progressive taxation and globalization 1</a><br />
<a href="http://economistsview.typepad.com/economistsview/2007/06/progressive_tax.html" target="_blank">Progressive taxation and globalization 2</a><br />
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<b><a href="http://www.foreignaffairs.org/20070701faessay86403-p0/kenneth-f-scheve-matthew-j-slaughter/a-new-deal-for-globalization.html" target="_blank">Progressive taxation and globalization 3</a></b></div>
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<a href="http://www.econ.upenn.edu/~manovski/papers/prod_gains_from_prog_tax.pdf" target="_blank"><b>Productivity gains from progressive taxation</b></a></div>
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<b><a href="http://www.findthatdoc.com/search-8258277-hPDF/download-documents-pfflat-pdf.htm" target="_blank">Progressive versus flat taxe</a>s</b></div>
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<a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=875414" target="_blank"><b>Conservative case for progressive taxation</b></a></div>
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<a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=752064" target="_blank"><b>Catholic view 1</b></a></div>
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<b><a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=730684" target="_blank">Catholic view 2</a></b></div>
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<b><a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=608967" target="_blank">The Matthew Effect (the rich get richer) </a></b></div>
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<a href="http://www.theatlantic.com/business/archive/2012/08/americans-want-to-live-in-a-much-more-equal-country-they-just-dont-realize-it/260639/" target="_blank"><b>Real and desired equality in America</b></a></div>
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<b>Capital gains:</b></div>
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<b><a href="http://www.nytimes.com/2007/07/29/business/yourmoney/29view.html?ex=1343448000&en=c45247ad01379f01&ei=5124&partner=permalink&exprod=permalink" target="_blank">Capital gains subsidies distort economic efficiency</a></b></div>
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<a href="http://www.princeton.edu/~tleonard/papers/capgains.pdf" target="_blank"><b>The rhetoric of capital gains</b></a></div>
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<b><a href="http://faireconomy.org/enews/its_time_to_tax_wealth_like_work" target="_blank">http://faireconomy.org/enews/its_time_to_tax_wealth_like_work</a> </b></div>
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<a href="http://www.associatedcontent.com/article/7948493/why_is_the_tax_on_work_so_much_higher.html?cat=3" target="_blank"><b>Taxing speculation like work</b></a><br />
<b><a href="http://www.offthechartsblog.org/tax-preference-for-capital-gains-doesnt-make-sense/" target="_blank">Center for Budget and Policy Priorities</a> </b></div>
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<b> Tax and the decline of the middle class:</b></div>
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<a href="http://www.sbs.ox.ac.uk/centres/tax/Documents/working_papers/WP0917.pdf" target="_blank"><b>Oxford paper on who pays the burden of corporate tax</b></a></div>
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<a href="http://www.aei.org/article/103689" target="_blank"><b>AEI on the wage effect of corporate tax</b></a></div>
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<b><a href="http://www.treasury.gov/resource-center/tax-policy/tax-analysis/Documents/ota101.pdf" target="_blank">Treasury report on corporate tax </a></b></div>
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<b> <a href="http://ec.europa.eu/taxation_customs/resources/documents/taxation/gen_info/economic_analysis/tax_papers/taxation_paper_15_en.pdf" target="_blank">European commission</a></b></div>
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<b> </b><a href="http://www.cdhowe.org/pdf/Commentary_324.pdf" target="_blank"><b>C.D. How Institute (Canada)</b></a></div>
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<a href="http://ideas.repec.org/p/ces/ceswps/_1773.html" target="_blank"><b>Tax and multinational activity</b></a></div>
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<a href="http://www.umass.edu/preferen/gintis/intergen.pdf" target="_blank"><b>The inheritance of inequality</b></a></div>
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<b><a href="http://www.s-corp.org/wp-content/uploads/2011/04/Flow-Through-Report-Final-2011-04-08.pdf" target="_blank">The problem with trying to lower the corporate rate by broadening the base</a> </b></div>
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<a href="http://www.aei.org/article/politics-and-public-opinion/judicial/big-business-the-other-engine-of-economic-growth/" target="_blank"><b>Big business and economic growth</b></a></div>
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<b><a href="http://www.kc.frb.org/PUBLICAT/ECONREV/PDF/2q07edmi.pdf" target="_blank">Small business versus big business</a></b></div>
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<a href="http://voices.yahoo.com/how-important-small-business-plumbers-plutocrats-8299053.html?cat=3" target="_blank"><b>How important is small business?</b></a></div>
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<b><a href="http://www.motherjones.com/politics/2006/05/look-numbers-how-rich-get-richer" target="_blank">How the rich get richer, Mother Jones</a></b></div>
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<b><a href="http://www.americanprogress.org/issues/labor/news/2008/08/04/4797/factory-facts/" target="_blank">Center for American Progress factory facts</a></b></div>
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<b><a href="http://www.milkeninstitute.org/manufacturing/" target="_blank">Manufacturing still matters</a></b></div>
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<a href="http://news.cnet.com/U.S.-tehttp:/www.news.com/U.S.-tech-edge-getting-dull,-companies-say/2100-1028_3-5579710.html?tag=nefd.topch-edge-getting-dull,-companies-say/2100-1028_3-5579710.html%3ftag=nefd.top" target="_blank"><b>America is losing its technical edge</b></a></div>
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<a href="http://www.usatoday.com/money/economy/2009-07-08-science-engineer-jobs_N.htm" target="_blank"><b>No jobs for engineers</b></a></div>
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<b><a href="http://www.americaneconomicalert.org/view_art.asp?Prod_ID=2684" target="_blank">China captures increasing share of global R&D</a> </b></div>
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<a href="http://www.nsf.gov/statistics/sed/digest/2011/theme1.cfm#3" target="_blank"><b>Educating our competitors</b></a></div>
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<a href="http://crfb.org/document/averting-fiscal-crisis" target="_blank"><b>CRFB on averting a fiscal crisis</b></a></div>
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<b><a href="http://www.finance.senate.gov/hearings/hearing/?id=e1f05571-f355-2cae-7091-7ec8a636e74d" target="_blank">Professor Elizabeth Warren can the middle class make ends meet?</a> </b></div>
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<a href="http://www.cbo.gov/publication/21999" target="_blank"><b>CBO report</b></a></div>
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<b><a href="http://www.aei.org/docLib/20060706_TaxesandWages.pdf" target="_blank">Tax and wages</a> </b></div>
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<a href="http://www.people.hbs.edu/ffoley/Cash.pdf" target="_blank"><b>Tax and corporate cash hoarding</b></a></div>
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<b><a href="http://www.nytimes.com/2007/03/29/business/29tax.html?ref=business" target="_blank">NY Times - income gap is widening</a></b></div>
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<a href="http://www.taxpolicycenter.org/press/upload/inequality%20and%20taxes.Burman.5-07.swf" target="_blank"><b>Inequality and taxes</b></a></div>
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<a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1330434" target="_blank"><b>Corporate tax and competitiveness</b></a></div>
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<b><a href="http://www.iie.com/publications/interstitial.cfm?ResearchID=1587" target="_blank">Peterson Institute corporate tax hobbling exports</a> </b></div>
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<a href="http://sociology.ucsc.edu/whorulesamerica/power/wealth.html" target="_blank"><b>Professor Domhoff</b></a></div>
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<b><a href="http://www.blogger.com/-%20http://www.itif.org/publications/time-washington-think-state" target="_blank">Information Technology and Innovation Foundation</a></b></div>
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<b><a href="http://www.progressivepolicy.org/2010/05/progress-report-revisiting-%E2%80%9Crules-of-the-road%E2%80%9D-for-a-new-economy/" target="_blank">Progressive Policy Institute </a></b></div>
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<a href="http://www.democracyjournal.org/6/6547.php" target="_blank"><b>Gene Sperling on rising tide economics</b></a></div>
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<a href="http://www.americanprogress.org/issues/tax-reform/news/2012/04/17/11444/the-richest-1-percent-get-more-pay-less/" target="_blank"><b>The richest 1% get more, pay less</b></a></div>
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<b> <a href="http://www.law.yale.edu/documents/pdf/The_David_R._Tillinghast_Lecture.pdf" target="_blank">Professor Graetz of Yale on taxing international income</a></b></div>
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<b><a href="http://www.vdare.com/articles/the-fading-us-economy" target="_blank">Paul Roberts from 2006 on fading U.S. economy (our problems are not new)</a></b></div>
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<b><a href="http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt" target="_blank">Foreign holders of U.S. debt are not people who have our interests at heart</a></b></div>
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<b><a href="http://www.brillig.com/debt_clock/" target="_blank">U.S. debt clock</a></b></div>
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<a href="http://www.gao.gov/new.items/d07983r.pdf" target="_blank"><b>GAO reports, pre-crisis 1</b></a></div>
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<a href="http://www.gao.gov/new.items/d07389t.pdf" target="_blank"><b>GAO reports pre-crisis 2</b></a></div>
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<b>Center for Retirement Research <a href="http://crr.bc.edu/special-projects/national-retirement-risk-index/" target="_blank">retirement risk index</a> </b></div>
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<b><a href="http://www.businessweek.com/magazine/content/06_02/b3966140.htm" target="_blank">Business Week on Social Security</a> </b></div>
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<b>Change to Win - <a href="http://www.changetowin.org/good-jobs-now/washingtons-middle-class" target="_blank">Washington State's middle clas</a>s </b></div>
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<b><a href="http://ec.europa.eu/research/headlines/news/article_04_05_11_en.html" target="_blank">European Commission on U.S. technology decline</a></b></div>
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<a href="http://www8.nationalacademies.org/onpinews/newsitem.aspx?recordid=12999" target="_blank"><b>National Academy of Sciences on U.S. competitiveness decline</b></a></div>
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<a href="http://progressivepolicy.org/why-grumbling-about-ge%E2%80%99s-taxes-misses-the-point" target="_blank"><b>Progressive Policy Institute</b></a></div>
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<b>National Science Foundation on <a href="http://www.nsf.gov/statistics/seind06/c6/fig06-14.htm" target="_blank">U.S. trade balance</a></b></div>
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<b>A look at one company, <a href="http://online.wsj.com/article/SB119643547847109553.html?mod=yahoo_hs&ru=yahoo" target="_blank">Pfizer 1</a> </b></div>
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<a href="http://www.reuters.com/article/2007/11/30/pfizer-asia-idINHKG36765120071130?rpc=44" target="_blank"><b>Pfizer 2</b></a></div>
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<a href="http://www.project-syndicate.org/commentary/rogoff77/English" target="_blank">Rogoff</a><br />
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<a href="http://www.washingtonpost.com/business/economy/companies-turning-again-to-stock-buybacks-to-reward-shareholders/2013/12/15/58a2e99c-4aef-11e3-9890-a1e0997fb0c0_story.html" target="_blank">Washington post</a></div>
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<br />SharedGrowthhttp://www.blogger.com/profile/14044657568079494971noreply@blogger.com0tag:blogger.com,1999:blog-5805195981484952288.post-34992302104297526752016-10-01T15:54:00.000-07:002016-10-12T11:52:57.756-07:00Action Page<span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"><b>This can happen. The Chairman of the Senate Finance Committee is planning to publish a tax reform proposal based on the dividends paid deduction. Let your two Senators and U.S. Representative know that you want the fair, effective and revenue-positive Shared Economic Growth proposal!</b></span><br />
<span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"><b><span style="background-color: yellow;"><br /></span>
<span style="background-color: white;">How? Go to the U.S. Senate website <a href="http://www.senate.gov/index.htm">http://www.senate.gov/index.htm</a> , choose your state at the top right corner to find your Senators, and under each one choose the "contact" option and click on the link. In the message submission form that pops up, enter your information, then copy the text below and paste it into the body of your message. (Feel free to customize it to add your own thoughts), then hit "submit.</span></b></span><br />
<span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"><b style="background-color: white;"><span style="background-color: yellow;"><br /></span>
<span style="background-color: white;">Now, do the same thing for your U.S. representative by going to <a href="http://www.house.gov/">http://www.house.gov/</a> and entering your zip code in the Find Your Representative box. Choose your representative, and from their home page choose Contact to bring up the message form. Again, enter your details, paste in the text below, and hit submit.</span></b></span><br />
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="background-color: white;"><b style="background-color: white;"><span style="background-color: white;"><br /></span></b></span>
</span><br />
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="background-color: white;"><b style="background-color: white;"><span style="background-color: white;">If you have time, please also copy the text into a fax, using either a fax machine or the free fax service at <a href="http://www.bestfreefax.com/BFFSendFreeFax.php">http://www.bestfreefax.com/BFFSendFreeFax.php</a> , and send it to Senator Orrin Hatch, Chairman of the Senate Finance Committee, at </span></b></span><span style="background-color: white; color: #333333; line-height: 25.71px;"><b><span style="font-size: 18px;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><span class="baec5a81-e4d6-4674-97f3-e9220f0136c1" style="white-space: nowrap;">202-228-0554<a href="https://www.blogger.com/blogger.g?blogID=5805195981484952288#" style="border: currentColor; bottom: 0px; display: inline; float: none; height: 16px; left: 0px; margin: 0px; overflow: hidden; position: static !important; right: 0px; top: 0px; vertical-align: middle; white-space: nowrap; width: 16px;" title="Call: 202-228-0554"><img src="data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAABAAAAAQCAYAAAAf8/9hAAAACXBIWXMAAA7EAAAOxAGVKw4bAAAAIGNIUk0AAHolAACAgwAA+f8AAIDpAAB1MAAA6mAAADqYAAAXb5JfxUYAAAKLSURBVHjadJPfS5NhFMe/21xvuhXRyJAZroiSrJnbRdT7vrAf5HBaK5RABmEEwQIvkpZ/QRcWXdSFw5soKaF0F7qZeLO13mGBDpQsf5CoxVKHOt0Pctp2uvEdrzG/V+c553w/54HnPDIiQiGpPMETABoB2AAYd9MRAMMAvGmX+RcAyAoBVJ7gZQDtABworH4AHWmX+bOMZdkjCoXiUzabvcAwzPSsob5p/VTNY9GcdpnxdmYZ9wJThSCtCr1e/4XjuNPd3d1KjUZzaGbI27ysqzGQoggAsLa1A7ehArrDxfDNr0oBlQB+wmKxbJFEL968SxoamsjkHaPU9l9piUo6A0RE1DG2QCWdASrpDAzJM5kMI8XecdjVxfEl+K9dxFgsgUvvR6HyBKHyBAEATyKLeGSsENuNcqk5kUjEGm7fzcYqr0ClVODl99+YXEvl6+c1amjVe+ahiGGYaUEQKnmeh91uL43rqheixjpdmzCL11er0PcjhrTLvMfUJsyKYUSeyWQ6enp6tgCgrKxsfbP8bB8AdE1G89cOReMAgOv+Cag8QXRNRkXAsDwcDr+am5tLCYKA3t7eo2dG+1vVK/MfpRPtA+MIReMYaKj+/xm9MiICx3EmpVL5wefzFavValis1u1vvHMkdfykCQC0kSGUTo+Ajmnx1dSC7IGD+UUCEYGIwLKsyWazrSeTSSIiMpnNf7Ttz5+ec96fr7/VnE0mk+QfHMzV3WjcKH/4rEr05QGFIA6HY4llWRLPRER+v3/HYrFMFQSIkNra2tVQKJSlfcSyLO0LECFWq3XF6XRGA4HAptTsdrsXeZ6fEHtl+31nAOA4rkUulz/I5XL63dQGgHEAN8Ph8AYA/BsAt4ube4GblQIAAAAASUVORK5CYII=" style="border: currentColor; bottom: 0px; display: inline; float: none; height: 16px; left: 0px; margin: 0px; overflow: hidden; position: static !important; right: 0px; top: 0px; vertical-align: middle; white-space: nowrap; width: 16px;" title="Call: 202-228-0554" /></a></span></span><span style="font-size: 18px;"> . </span></span><span style="font-family: "georgia" , "times new roman" , serif;">Chairman Hatch is working on a tax proposal based on the dividends-paid deduction to be issued in the next few months. We want to help him to get it right.</span></b></span></span><br />
<span style="font-family: "georgia" , "times new roman" , serif;"><br /></span>
<span style="background-color: white; color: #333333; font-family: "georgia" , "times new roman" , serif; line-height: 25.71px;"><b>If you are a Change.org user, please also sign our <a href="https://www.change.org/p/orrin-hatch-save-our-economy-with-shared-economic-growth?recruiter=64555209&utm_source=share_for_starters&utm_medium=copyLink" target="_blank">petition</a>. </b></span><br />
<span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"><b style="background-color: white;"><span style="background-color: yellow;"><br /></span>
<span style="background-color: white;">It's fast, it's easy, and it will help to save our economy!</span></b></span><br />
<span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"><b style="background-color: white;"><span style="background-color: yellow;"><br /></span>
<span style="background-color: white;">Cut and paste the text below:</span></b></span><br />
<br />
<span style="font-family: "georgia" , "times new roman" , serif;">Please sponsor the Shared Economic Growth tax reform proposal. The bill text is at the link below, and a full explanation can be found at http://digitalcommons.pace.edu/plr/vol35/iss3/4/. Only Shared Economic Growth can do all of the following in a revenue-positive manner:</span><br />
<div class="Document" style="margin-left: 58pt; text-indent: -0.25in;">
<!--[if !supportLists]--><span style="font-family: "georgia" , "times new roman" , serif;">1.<span style="font-size: 7pt; font-stretch: normal;"> </span><span style="font-stretch: normal;">M</span>ake the U.S.A. the most attractive location
on the planet for American companies to locate their high-value operations, so
that American workers would regain market power;<o:p></o:p></span></div>
<div class="Document" style="margin-left: 58pt; text-indent: -0.25in;">
<!--[if !supportLists]--><span style="font-family: "georgia" , "times new roman" , serif;">2.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Allow corporations to bring cash home to
invest in those high-value operations;<o:p></o:p></span></div>
<div class="Document" style="margin-left: 58pt; text-indent: -0.25in;">
<!--[if !supportLists]--><span style="font-family: "georgia" , "times new roman" , serif;">3.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Enable American firms to compete effectively
against their foreign rivals;<o:p></o:p></span></div>
<div class="Document" style="margin-left: 58pt; text-indent: -0.25in;">
<!--[if !supportLists]--><span style="font-family: "georgia" , "times new roman" , serif;">4.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Provide a benefit to middle-class workers who
do the right thing and save money for their children’s educations and for
retirement;<o:p></o:p></span></div>
<div class="Document" style="margin-left: 58pt; text-indent: -0.25in;">
<!--[if !supportLists]--><span style="font-family: "georgia" , "times new roman" , serif;">5.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Avoid increasing the deficit today, and provide substantial additional revenues and private savings in order to help
prevent a fiscal crisis as the baby boomers retire;<o:p></o:p></span></div>
<div class="Document" style="margin-left: 58pt; text-indent: -0.25in;">
<!--[if !supportLists]--><span style="font-family: "georgia" , "times new roman" , serif;">6.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Eliminate the incentive for corporations to
take on too much destabilizing debt by eliminating the tax advantage of debt
financing;<o:p></o:p></span></div>
<div class="Document" style="margin-left: 58pt; text-indent: -0.25in;">
<!--[if !supportLists]--><span style="font-family: "georgia" , "times new roman" , serif;">7.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Improve the efficiency of our economy by
unlocking cash and encouraging its rapid flow to the most efficient
investments;<o:p></o:p></span></div>
<div class="Document" style="margin-left: 58pt; text-indent: -0.25in;">
<!--[if !supportLists]--><span style="font-family: "georgia" , "times new roman" , serif;">8.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Put an end to corporate tax shenanigans and
solve the problem of corporate tax shelters and the complexities of transfer
pricing enforcement;<o:p></o:p></span></div>
<div class="Document" style="margin-left: 58pt; text-indent: -0.25in;">
<!--[if !supportLists]--><span style="font-family: "georgia" , "times new roman" , serif;">9.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Put C corporations on the same tax
footing as pass-through entities, without double taxation of corporate
earnings, eliminating tax distortion of entity choice;<o:p></o:p></span></div>
<div class="Document" style="margin-left: 58pt; text-indent: -0.25in;">
<!--[if !supportLists]--><span style="font-family: "georgia" , "times new roman" , serif;">10.<span style="font-size: 7pt; font-stretch: normal;"> </span><!--[endif]-->Increase corporate responsiveness to shareholders and regulators;<o:p></o:p></span></div>
<div class="Document" style="margin-left: 58pt; text-indent: -0.25in;">
<span style="font-family: "georgia" , "times new roman" , serif;">11. <span style="font-family: "times new roman" , serif;">End the practice of compensating </span><span style="text-indent: -0.25in;">corporate executives for artificial “growth”
that consists only of retaining earnings rather than paying them out as
dividends; and</span></span></div>
<div class="Document" style="margin-left: 58pt; text-indent: -0.25in;">
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="text-indent: -0.25in;">12. </span><span style="font-family: "times new roman" , serif;">Improve the efficiency of our allocation of talent
by eliminating the strong tax preference for pursuing unproductive – and often
destructive - speculation rather than productive work, while at the same time
improving the fairness of our tax system</span><span style="font-family: "times new roman" , serif;"> </span></span></div>
<div class="Document" style="margin-left: 58pt; text-indent: -0.25in;">
<span style="font-family: "georgia" , "times new roman" , serif;"><br /></span></div>
<div class="Document" style="margin-left: 58pt; text-indent: -0.25in;">
<span style="font-family: "georgia" , "times new roman" , serif;">The text of the Bill can be found at http://sharedgrowth.blogspot.com/2013/03/shared-economic-growth-draft-bill-and.html</span><br />
<span style="font-family: "georgia" , "times new roman" , serif;"><br /></span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;">Thank you.</span></div>
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<br />SharedGrowthhttp://www.blogger.com/profile/14044657568079494971noreply@blogger.com4tag:blogger.com,1999:blog-5805195981484952288.post-74774307616995176542016-09-30T13:26:00.000-07:002016-10-12T11:52:27.845-07:00Draft Bill and Summary<style>@font-face {
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<b><span style="font-size: 11pt;">A Bill<o:p></o:p></span></b></div>
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<span style="font-size: 11pt;">To amend the Internal
Revenue Code of 1986 to remove incentives to shift employment abroad, and to
remove hidden taxes on retirement savings and provide equitable taxation of
earnings.<o:p></o:p></span></div>
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<h1>
<span style="font-size: 11pt;">SECTION 1: SHORT TITLE<o:p></o:p></span></h1>
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<span style="font-size: 11pt;">This Act may be cited as the
“Shared Economic Growth Act of 2016”.<o:p></o:p></span></div>
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<span style="font-size: 11pt;">SECTION 2: PROVIDING
INCENTIVES TO LOCATE HIGH-VALUE JOBS IN AMERICA <st1:stockticker w:st="on">AND</st1:stockticker>
TO INJECT <st1:stockticker w:st="on">CASH</st1:stockticker> INTO THE AMERICAN
ECONOMY <o:p></o:p></span></div>
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<span style="font-size: 11pt;">(a) Part VIII of Subchapter B
of Chapter 1 of Subtitle A of the Internal Revenue Code of 1986 is amended by
adding the following new section:<o:p></o:p></span></div>
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<span style="font-size: 11pt;"><br />
“251. (a) General Rule. In the case of a corporation, there shall be allowed as
a deduction an amount equal to the amount paid as dividends in a taxable year
of the corporation beginning on or after January 1, 2017.<o:p></o:p></span></div>
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<span style="font-size: 11pt;">(b) Limitation of benefit to
tax otherwise payable.<o:p></o:p></span></div>
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<!--[if !supportLists]--><span style="font-size: 11pt;">1)<span style="font-size: 7pt; font-stretch: normal;">
</span></span><!--[endif]--><span style="font-size: 11pt;">The deduction
under this section may not exceed the corporation’s taxable income (as computed
before the deduction allowed under this section) for the taxable year in which
the dividend is paid, decreased by an amount equal to 2.85 times any tax
credits allowed to the corporation in the taxable year.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: .75in; mso-list: l6 level1 lfo1; tab-stops: list .75in; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-size: 11pt;">2)<span style="font-size: 7pt; font-stretch: normal;">
</span></span><!--[endif]--><span style="font-size: 11pt;">Where the
deduction otherwise allowable under this section in a taxable year exceeds the
limitation provided in paragraph 1 of this subsection, the excess may be carried
back and taken as a deduction in the two prior taxable years or forward to each
of the 20 taxable years following the year in which the dividends were paid.
However, the total deduction under this section for dividends paid during the
taxable year plus carryovers from other taxable years may not exceed the limit
provided in paragraph 1 of this subsection. Rules equivalent to those provided
in paragraphs 2 and 3 of subsection 172(b) of this subchapter shall govern the
application of such carryover deductions.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: .75in; mso-list: l6 level1 lfo1; tab-stops: list .75in; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-size: 11pt;">3)<span style="font-size: 7pt; font-stretch: normal;">
</span></span><!--[endif]--><span style="font-size: 11pt;">No amount carried
back under paragraph 2 of this subsection may be claimed as a deduction in any
taxable year beginning on or before December 31, 2016. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: .25in; mso-list: l4 level1 lfo5; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-size: 11pt;">(c)<span style="font-size: 7pt; font-stretch: normal;"> </span></span><!--[endif]--><span style="font-size: 11pt;">Consolidated groups. In the case of a group electing
to file a consolidated return under section 1501 of this Subtitle, the
deduction provided under this section may be claimed only with respect to
dividends paid by the parent corporation of such consolidated group.”<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: .5in;">
<br /></div>
<div class="MsoNormal">
<span style="font-size: 11pt;">(b) Subparagraph (b)(1)(A) of
Section 243 of Part VIII of Subchapter B of Chapter 1 of Subtitle A of the
Internal Revenue Code of 1986 is amended to read as follows:<br />
<!--[if !supportLineBreakNewLine]--><br />
<!--[endif]--><o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 11pt;"> “(A) if the payor of such dividend is not entitled to
receive a dividends paid deduction for any amount of such dividend under
section 251 of this Part, and if at the close of the day on which such dividend
is received, such corporation is a member of the same affiliated group as the
corporation distributing such dividend, and”.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-size: 11pt;">(c) Section 244 of Part VIII
of Subchapter B of Chapter 1 of Subtitle A of the Internal Revenue Code of 1986
is repealed for tax years beginning after December 31, 2016. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-size: 11pt;">(d) Subparagraph (a)(3)(A) of
Section 245 of Part VIII of Subchapter B of Chapter 1 of Subtitle A of the
Internal Revenue Code of 1986 is amended to read as follows:<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 11pt;"> “(A) the post-1986 undistributed U.S. earnings, excluding
any amount for which the distributing corporation or any corporation that paid
dividends, directly or indirectly, to the distributing corporation was entitled
to receive a deduction under section 251 of this Part, bears to”.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-size: 11pt;">(e) Subsection 1(h) of Part I
of Subchapter A of Chapter 1 of Subtitle A of the Internal Revenue Code of 1986
is repealed for tax years ending after December 31, 2016.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: .5in;">
<br /></div>
<div class="MsoNormal">
<span style="font-size: 11pt;">(f) Subsection (a) of Section
901 of Part <st1:stockticker w:st="on">III</st1:stockticker> of Subchapter N of
Chapter 1 of Subtitle A of the Internal Revenue Code of 1986 is amended to read
as follows:<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: .5in;">
<span style="font-size: 11pt;">“(a)
Allowance of credit<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: .5in;">
<span style="font-size: 11pt;">If
the taxpayer chooses to have the benefits of this subpart, the tax imposed by
this chapter shall, subject to the limitation of section 904, be credited with
the amounts provided in the applicable paragraph of subsection (b) plus, in the
case of a corporation, the taxes deemed to have been paid under sections 902
and 960. However, in the case of a
corporation, no credit shall be allowed under this section or under section 902
for foreign taxes paid or accrued, or deemed to have been paid or accrued, in
tax years beginning after December 31, 2016. Such choice for any taxable year
may be made or changed at any time before the expiration of the period
prescribed for making a claim for credit or refund of the tax imposed by this
chapter for such taxable year. The credit shall not be allowed against any tax
treated as a tax not imposed by this chapter under section 26(b).”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 11pt;">This amendment shall override
any contrary provision in any existing income tax convention. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoBodyText">
<span style="font-size: 11pt;">SECTION 3: PREVENTING
WINDFALL BENEFITS FOR FOREIGN INVESTORS<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-size: 11pt;">(a) Subchapter A of Chapter 3
of Subtitle A of the Internal Revenue Code of 1986 is amended by adding a new Section
1447 to read:<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: .5in;">
<span style="font-size: 11pt;">“1447(a)
<b>General rule</b>. In the case of
dividends paid to any non-resident individual or corporation by a United States
corporation that claims a deduction under Section 251 with respect to such
dividend, the payor shall deduct and withhold from such dividends the tax shall
be equal to 30 percent of the gross amount thereof, in addition to any other
tax withheld with respect to such payment under this subchapter. The imposition
of this 30 percent withholding tax on dividends shall override any contrary
restriction in any income tax convention.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: .5in;">
<span style="font-size: 11pt;">(b) <b>Alternative additional tax</b>. In lieu of
the withholding tax provided under subsection (a), a payor corporation may
instead elect to forego the benefit of the dividends-paid deduction under
Section 251 with regard to so much of the dividends as would otherwise be
subject to withholding under subsection (a), and instead to withhold from such
dividends an amount of tax equal to the top rate of corporate income tax under
Section 11 multiplied by the amount of such dividends, and to apply the tax
thus withheld as a prepayment of the payor corporation’s tax liability. Any tax
so withheld under this subsection (b) shall act as an incremental final tax on
the relevant shareholder that may not be reduced.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: .5in;">
<br /></div>
<div class="MsoNormal">
<span style="font-size: 11pt;">(b) Section 871 of Subchapter
N of Chapter 1 of Subtitle A of the Internal Revenue Code of 1986 is amended by
redesignating subsection (n) as subsection (o) and adding a new subsection (n) to
read:<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: .5in;">
<span style="font-size: 11pt;">“(n<b>) Additional 30 percent tax on deductible
dividends paid to nonresident alient individuals</b>. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: 1.25in; mso-list: l2 level1 lfo6; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-size: 11pt;">(1)<span style="font-size: 7pt; font-stretch: normal;"> </span></span><!--[endif]--><b><span style="font-size: 11pt;">General rule</span></b><span style="font-size: 11pt;">. In the case of dividends paid to any non-resident alien
individual by a United States corporation that claims a deduction under Section
251 with respect to such dividend, there is hereby imposed for each taxable
year a tax equal to 30 percent of the gross amount thereof, in addition to any
other tax imposed with respect to such payment under this subchapter. The
imposition of this 30 percent tax on dividends shall override any contrary
restriction in any income tax convention.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: 1.25in; mso-list: l2 level1 lfo6; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-size: 11pt;">(2)<span style="font-size: 7pt; font-stretch: normal;"> </span></span><!--[endif]--><b><span style="font-size: 11pt;">Exception</span></b><span style="font-size: 11pt;">. In the case of any dividend for which the payor
corporation elects the alternative final tax under Section 1447(b), the 30
percent tax under paragraph (1) of this subsection shall not apply.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: 1.25in; mso-list: l2 level1 lfo6; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-size: 11pt;">(3)<span style="font-size: 7pt; font-stretch: normal;"> </span></span><!--[endif]--><b><span style="font-size: 11pt;">Alternative
election to pay individual income tax at the highest individual rate</span></b><span style="font-size: 11pt;">. If the non-resident alien taxpayer elects to treat
the dividend income otherwise taxable under paragraph (1) of this subsection as
income connected with a United States business, and further agrees to pay tax
thereon at the highest rate provided under Section 1, then the 30 percent tax under paragraph (1) of this
subsection shall not apply.”<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: 1.25in;">
<br /></div>
<div class="MsoNormal">
<span style="font-size: 11pt;">(c) Section 881 of Subchapter
N of Chapter 1 of Subtitle A of the Internal Revenue Code of 1986 is amended by
redesignating subsection (f) as subsection (g) and adding a new subsection (f) to
read:<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: .5in;">
<span style="font-size: 11pt;">“(f<b>) Additional 30 percent tax on deductible
dividends paid to foreign corporations</b>. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: 1.25in; mso-list: l5 level1 lfo7; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-size: 11pt;">(1)<span style="font-size: 7pt; font-stretch: normal;"> </span></span><!--[endif]--><b><span style="font-size: 11pt;">General rule</span></b><span style="font-size: 11pt;">. In the case of dividends paid to any foreign
corporation by a United States corporation that claims a deduction under
Section 251 with respect to such dividend, there is hereby imposed for each
taxable year a tax equal to 30 percent of the gross amount thereof, in addition
to any other tax imposed with respect to such payment under this subchapter. The
imposition of this 30 percent tax on dividends shall override any contrary
restriction in any income tax convention.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: 1.25in; mso-list: l5 level1 lfo7; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-size: 11pt;">(2)<span style="font-size: 7pt; font-stretch: normal;"> </span></span><!--[endif]--><b><span style="font-size: 11pt;">Exception</span></b><span style="font-size: 11pt;">. In the case of any dividend for which the payor
corporation elects the alternative final tax under Section 1447(b), the 30
percent tax under paragraph (1) of this subsection shall not apply.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: 1.25in; mso-list: l5 level1 lfo7; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-size: 11pt;">(3)<span style="font-size: 7pt; font-stretch: normal;"> </span></span><!--[endif]--><b><span style="font-size: 11pt;">Alternative
election to pay income tax at the highest icorporate rate</span></b><span style="font-size: 11pt;">. If the foreign corporate taxpayer elects to treat
the dividend income otherwise taxable under paragraph (1) of this subsection as
income connected with a United States business, and further agrees to pay tax
thereon at the highest rate provided under Section 11, then the 30 percent tax under paragraph (1) of this
subsection shall not apply.”<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: 1.25in;">
<br /></div>
<div class="MsoNormal" style="margin-left: 1.25in;">
<br /></div>
<div class="MsoNormal" style="margin-left: .5in;">
<br /></div>
<h1>
<span style="font-size: 11pt;">SECTION 4: FAIR FUNDING FOR RETIREMENT
SECURITY<o:p></o:p></span></h1>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-size: 11pt;">(a) Section 1 of Part I of
Subchapter A of Chapter 1 of Subtitle A of the Internal Revenue Code of 1986 is
amended by adding the following new subsection:<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="PT-BR" style="font-size: 11pt;">“1(h) (1) (a) Tax imposed. </span><span style="font-size: 11pt;">There
is hereby imposed a tax of 7.65 percent on so much of the adjusted gross income
for the taxable year of that exceeds--<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: .5in; mso-list: l0 level1 lfo2; tab-stops: list .5in; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-size: 11pt;">(A)<span style="font-size: 7pt; font-stretch: normal;"> </span></span><!--[endif]--><span style="font-size: 11pt;">$500,000, in the case of <o:p></o:p></span></div>
<div class="MsoBodyTextIndent" style="margin-left: .75in; text-indent: -.25in;">
<span style="font-size: 11pt;">(i) every married individual (as defined in section
7703) who makes a single return jointly with his spouse under section 6013; <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: .75in; text-indent: -.25in;">
<span style="font-size: 11pt;">(ii) every surviving spouse (as defined in section
2(a)); and<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: .75in; text-indent: -.25in;">
<span style="font-size: 11pt;">(iii) every head of a household (as defined in section
2(b)), ;<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: .25in;">
<span style="font-size: 11pt;">(B)
$250,000, in the case of<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: .75in; mso-list: l1 level1 lfo3; tab-stops: list .75in; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-size: 11pt;">(i)<span style="font-size: 7pt; font-stretch: normal;">
</span></span><!--[endif]--><span style="font-size: 11pt;">every individual
(other than a surviving spouse as defined in section 2(a) or the head of a
household as defined in section 2(b)) who is not a married individual (as
defined in section 7703); and<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: .75in; text-indent: -.25in;">
<span style="font-size: 11pt;">(ii) every married individual (as defined in section
7703) who does not make a single return jointly with his spouse under section
6013; <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: .75in; text-indent: -.25in;">
<span style="font-size: 11pt;">(C) $7,500, in the case of every estate and every
trust taxable under this subsection. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: .5in; text-indent: -.25in;">
<br /></div>
<div class="MsoNormal" style="margin-left: .5in; text-indent: -.25in;">
<span style="font-size: 11pt;"> (b) Credit for
hospitalization tax paid. There shall be allowed as a credit against the tax
imposed by this subsection so much of the amount of hospitalization tax paid by
the individual with respect to his wages under subsection 3101(b) and to his
self-employment income under subsection 1401(b) of this Title as exceeds the
following amounts:<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: .75in; mso-list: l3 level1 lfo4; tab-stops: list .75in; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-size: 11pt;">A)<span style="font-size: 7pt; font-stretch: normal;">
</span></span><!--[endif]--><span style="font-size: 11pt;">In the case of
individuals described in subparagraph (1)(A) of this subsection, $14,500; and<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: .75in; mso-list: l3 level1 lfo4; tab-stops: list .75in; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-size: 11pt;">B)<span style="font-size: 7pt; font-stretch: normal;">
</span></span><!--[endif]--><span style="font-size: 11pt;">In the case of
individuals described in subparagraph (1)(B) of this subsection, $7,250.<o:p></o:p></span></div>
<h1>
<span style="font-size: 11pt;"> </span></h1>
<h1>
<span style="font-size: 11pt;">SECTION 5: REINVESTING IN AMERICA<o:p></o:p></span></h1>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-size: 11pt;">Subsection (k) of Section 168
of Part I of Subchapter A of Chapter 1 of Subtitle A of the Internal Revenue
Code of 1986 is amended by adding the following new paragraph:<o:p></o:p></span></div>
<div class="MsoNormal" style="text-indent: .5in;">
<span style="font-size: 11pt;">“168(k)(8)
<b>Expensing of investments made from
post-2016 earnings</b>. In the case of a corporation subject to tax under
Section 11, any qualified U.S. property purchased or constructed from the
reinvestment of taxable income accrued in taxable years beginning after
December 31, 2016, which income was not offset by a dividends-paid deduction
under section 251 or by tax credits, the allowance under subsection (k)(1)(A)
of this section shall be 100 percent rather than 50 percent. The Secretary
shall prescribe regulations providing for the creation and maintenance of
eligible reinvestment accounts, such that taxable income not offset by the
Section 251 deduction or credits shall be an addition to the account and
investments qualifying for the 100 percent allowance shall be a subtraction
from the account, and corporate taxpayers may treat otherwise eligible
investments as funded by such earnings to the extent of the positive balance in
the reinvestment account.”<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-left: .75in;">
<br /></div>
<div class="MsoNormal">
<b><span style="font-size: 11pt;">Shared Economic Growth – Bill and Computations Summary<o:p></o:p></span></b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-size: 11pt;">The Shared Economic Growth
bill allows a corporate dividends paid deduction, restricted to taxable income
otherwise reported decreased by 2.85
times any credits claimed, so that the deduction may only reduce tax to zero.
Excess reductions could be carried back 2 years and forward 20, so there would
be incentive to pay out earnings with 2 years. Subsection 2(a) of the bill
makes this change, with Subsections 2(b), (c) and (d) making certain conforming
changes to the existing corporate dividends received deduction provisions.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-size: 11pt;">In 2010 corporations paid tax
of $223 billion, so offsets of up to $223 billion would be required for static
revenue neutrality. The first and most natural offset is individual tax payable
on the dividends paid. In order for the proposal to work, special rates for
dividends and for capital gains on equity would need to be eliminated, so that
these dividends would be taxed at full 2017 individual rates. Subsection 2(e)
repeals these special rates, but does not otherwise upset the incentives
provided for certain special categories of capital gains. This would have
provided an offset of $74 billion without altering the various special capital
gains exemption and rollover provisions.
As a practical matter, this offset is only feasible in conjunction with
the allowance of a dividends paid deduction, since such a deduction eliminates
double taxation on the corporate side and thus eliminates any legitimate
argument in favor of the capital gains rate benefits. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 11pt;">Subsection 2(f) provides an
offset mechanism that is only possible in conjunction with enactment of a
dividends paid deduction. Because the deduction would effectively eliminate
taxation of corporate income, including foreign income, it would no longer be
necessary to allow a corporate credit for foreign taxes paid. A deduction could
be permitted instead with the same bottom line effect. However, allowance of a
deduction would impel corporations to pay out more dividends in order to
eliminate the corporate level tax on the foreign income, which in turn
increases the offset at the individual level. With this provision, the
individual level offset from full 2011 rate taxation of the dividends needed to
reduce corporate tax to zero would be some $54 billion, after factoring out
shareholders not subject to tax.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-size: 11pt;">Section 3 provides another
offset only feasible in conjunction with a dividends paid deduction. Foreign
investors are effectively paying the 35% U.S. corporate level tax on their
investment earnings. Congress would not have to let them have the benefit of
the dividends paid deduction, since U.S. resident shareholders would have to
pay full rate tax on such dividends. So, Section 3 imposes a 30% incremental
withholding tax on dividends paid to foreign shareholders. This offset amounts
to some $33 billion. The provision provides certain alternative elections that
would be unlikely to be used but which would establish that the incremental tax
would be appropriate under the principles of America’s tax treaties,
essentially leaving the foreign shareholders in the same economic position that
they are in now and keeping them on a level with U.S. shareholders.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-size: 11pt;">Section 4 provides the final
offset, subjecting individual income over $500,000 a year to an Adjusted Gross Income
tax equivalent to the individual portion of the FICA taxes that ordinary wage
earners pay. At a 7.65% level, with an allowance crediting the Obamacare taxes
that were implemented since the first version of this proposal was explained to
Congress, this levy would offset the revenue attributable to dividends paid to
non-taxable retirement plans, so in effect this levy is requiring high income
individuals to pay a supplemental tax similar to FICA taxes that supports
non-social security private and state pension savings, thereby taking pressure
off of the social security system. This is an optional element of the proposal,
but it seems like good and fair policy. This provides an offset of $57 billion.
<b>Moreover, because these retirement
savings will ultimately be paid out and taxed, this would increase revenue by at
least some $22 billion per year on a static basis as the pension income is paid
out (after accounting for Roth IRAs etc.) </b>This additional revenue will be
important as the baby boomers move through retirement and the government is
looking for revenues to pay off the deficit in social security funding. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
<span style="font-size: 11pt;">Section 5 provides an
optional add-on. Because Shared Economic Growth would make it attractive for
corporations to invest in U.S. operations, it would also be desirable to allow
them to retain some of their earnings to make such U.S. investments rather than
squeezing out too much in dividends, so that we could encourage the most rapid
rebuilding of the U.S. economy. Section 5 therefore allows corporations to take
a 100% immediate deduction for their investment in qualified U.S. property made
from their post-2016 taxable earnings not paid out as dividends. While prior
investment expensing initiative were not notably successful in increasing
investment, they were in the context of an overall U.S. climate that made
investments unattractive. Expensing could be expected to be much more
successful at encouraging investment under Shared Economic Growth, and given
that it is a relatively short-term timing benefit, the cost to the government
would be low (essentially interest on 35% of the investment amount over less
than 7 years at the U.S. Treasury borrowing rate). Further, because Shared
Economic Growth could be expected to encourage accumulated foreign earnings to
be brought home, either producing taxable income that neutralizes this
expensing benefit at the corporate level or incurring additional
shareholder-level tax when paid out as dividends, there should be more than
enough incremental revenue to offset the cost of the timing item. <o:p></o:p></span></div>
</div>
SharedGrowthhttp://www.blogger.com/profile/14044657568079494971noreply@blogger.com0tag:blogger.com,1999:blog-5805195981484952288.post-45758996435959595762016-06-01T17:44:00.001-07:002016-06-01T17:44:54.637-07:00Why Capitalism and Globalism Together Crush Workers Properly run and regulated, a capitalist economy can be a good thing. The person with a bright idea forms a corporation, people with spare savings from their productive jobs buy shares, and useful new projects and good-paying new jobs appear for the benefit of all. Americans are trained to think of that ideal image, but we are not encouraged to push for the things that are necessary to ACHIEVE that image.<br />
<br />
In any form of economy, the profit of an enterprise flows by default to some sort of an owner. In Big State Socialism, that owner is the government. In humane socialism, it is social collectives of like-minded people who have pooled their resources of money and labor, rather like the initial founders of a start-up business. In capitalism, the profit flows to capital, i.e. to the people who put up investment money. Labor, the workers in the enterprise, only get as much as their market power enables them to demand. If you have too high of a ratio of would-be workers to jobs, the amount of the profit going to labor will fall, and so more will go to capital.<br />
<br />
In America over the last 40 years, automation, the reduction in stay-at-home parents, heavy immigration of would-be workers with no money to spend, and globalization have all combined to reduce the market power of workers, without anybody doing anything useful to re-balance the system. So, the share of income flowing to capital has risen, as can be seen in this chart.<br />
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Capital in America sits mainly in the hands of a a very elite group of individuals. You have heard of "the 1%", but the bottom half of the top 1% are mostly professional people who work hard for a living. Capital, people who make their money off of their or, often, off of other people's money (think hedge fund managers and the like), are concentrated in the top 1/10%. Despite their purchases of fantastic homes, yachts, and so on, those folks don't spend a very high percentage of their income. They have so much they couldn't spend it if they made it a full-time job.<br />
<br />
That creates a problem. The issue with our economy is not a lack of capital. Corporations are sitting on unprecedented piles of cash. Trillions of dollars are invested in all kinds of unproductive speculation chasing anything that looks remotely like a decent return on investment. No, there is plenty of capital, but what we are short on is good productive investments. Why is that? It is because our consumer economy is short on demand. The incomes of normal families have been flat to declining since 1973. Consumers are maxed out on debt. New college graduates drowning in student loans who hope to buy houses at unaffordable prices strain to find dollars to spend on consumption. All those consumers would be happy to spend more money, to generate the demand that would get the economy going, if they had it, but they don't. Why? Because the share of money going to rich capitalists, the people who don't spend all their money, has been increasing rapidly. That concentration of wealth is sucking the life out of our economy. That hurts all Americans, including, ironically, the wealthy, who could actually be better off if there was enough healthy consumer demand to allow the economy to grow as fast as it could.<br />
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Where does globalization come in? This can be seen through some math that nobody talks about. Say that a business can sell 5 widgets for $20 each, to earn $100. Say further that all of that money went to labor, so that the employees pocketed the $100. Now they could go out in the market and buy 5 widgets, or $100 worth of something else, from some other business, with the employees of that business earning $100 (assuming, for the sake of simplicity, that there are no material costs) that they in turn spend. That economy will produce full-out. Now bring in the capitalist, Junior Warbucks, who instead pays the workers only $50 and takes $50 for himself, spending $20 on his yacht and keeping $30 to use for unproductive speculation. That sucks out $30 worth of demand with each round, reducing production and growth.<br />
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Now bring in another country, perhaps Thailand. On day 1, workers in Thailand offer nice Jasmine rice for sale, and workers in America say "hey, that's nice stuff, I will buy $10 worth of that." So the workers in Thailand get $10, the American workers have $40 left to spend on U.S.-made products, and Junior Warbucks spends $20 on U.S. made stuff and holds back $30 like before. So now $60 still gets recycled in the U.S. economy, creating demand, while the Thai workers get $10 that they didn't get before, which means a lot to them.<br />
<br />
But now Junior Warbucks gets an idea. Instead of paying $50 to U.S. workers, he can move the widget plant to Thailand and get those Thai workers to do the job for $5, leaving another $45 of profit for himself. So now the U.S. workers get nothing, and can spend nothing. The Thai workers get $5, and they have to be glad to take it because the business of selling Jasmine rice to American workers just evaporated, since those workers can't afford that exotic luxury any more. Junior still only needs $20 for his yacht, so now he uses $75 for unproductive speculation. So, only the $20 that Junior spends on his yacht gets recycled in the U.S. economy, not the $60 from before. The U.S. economy shrinks, and the Thai economy drops from $10 to $5.<br />
<br />
The important thing to note here is that the good-paying jobs in the U.S. made it possible for BOTH the U.S. workers and the Thai workers to be better off. When those jobs moved to Thailand at lower wages, both countries suffered, because money that could have been recycled into jobs and productive enterprise was instead sucked out of the system and used to bet on bond prices, oil futures, collateralized debt obligations, credit default swaps, buying politicians, and the other nonsense that has replaced productive activity in America. This is globalization gone wrong; it goes wrong when globalization is used to shift income out of the hands of labor and into the hands of capital.<br />
<br />
Shared Economic Growth aims to pull valuable activity back into America to increase the market power of American workers, causing money to flow back into the hands of labor rather than capital. Further, the offsets are structured to allow workers to earn more on their savings, again boosting the amount of healthy consumer demand in America, allowing for stable growth rather than the weak and unsustainable debt-fueled artificial growth we've been relying on for the past 16 years. As money shifts from unproductive speculation to productive labor, everyone will benefit, not just in America but in other countries that use their own resources to produce things that these newly-empower American workers want. That is healthy capitalism, the balanced kind that works for everyone, the kind that built the healthy America of the 50s and 60s. We need to take the steps necessary to regain that balance. Shared Economic Growth is the right first step.SharedGrowthhttp://www.blogger.com/profile/14044657568079494971noreply@blogger.com0tag:blogger.com,1999:blog-5805195981484952288.post-81918712865916225452016-02-29T12:54:00.000-08:002016-03-02T15:50:17.166-08:00Count the Benefits<style>@font-face {
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<span style="color: navy; font-family: "franklin gothic medium"; font-size: 18pt;">Shared Economic Growth</span><br />
<span style="color: navy; font-family: "franklin gothic medium"; font-size: 18pt;">Count the Benefits</span><span style="font-family: "franklin gothic medium"; font-size: 12pt;"></span></div>
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<span style="color: black; font-family: "symbol"; font-size: 10pt;">·<span style="font: 7pt "Times New Roman";">
</span></span><span style="color: black; font-family: "franklin gothic medium"; font-size: 12pt;">Reverses the current
incentive to locate high value jobs off shore. Today net profit can be
increased 54% purely by having operations outside of the U.S. Reversing
this incentive will increase the demand for American workers and drive up
wages. Want evidence that this helps? Look at the growth in average
hourly direct pay for production workers in manufacturing for 3 low tax
countries. Between 1980 and 2004, Irish wages grew from 67.6% of the U.S.
level to 107.5%. Swiss wages grew from 117.9% of the U.S. level to 141.6%,
and . Singaporean wages grew from 14.5% to 35.6%, despite the fact that
Singapore increasingly used imported Malay day labor while the native
Singaporeans moved into white collar jobs.</span><span style="color: black; font-family: "franklin gothic medium"; font-size: 4pt;"></span></div>
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<span style="color: black; font-family: "symbol"; font-size: 10pt;">·<span style="font: 7pt "Times New Roman";">
</span></span><span style="color: black; font-family: "franklin gothic medium"; font-size: 4pt;"> </span></div>
<div class="MsoNormal" style="margin: 0in 3.45pt 0.0001pt; text-indent: -0.25in;">
<span style="color: black; font-family: "symbol"; font-size: 10pt;">·<span style="font: 7pt "Times New Roman";">
</span></span><span style="color: black; font-family: "franklin gothic medium"; font-size: 12pt;">Eliminates the incentive
to hold cash off shore. Today there is a penalty of up to 35% for bringing
cash into the U.S. economy. Corporations accumulate hundreds of billions off
shore each year to avoid this penalty. Removing that penalty would add
liquidity to our economy as those hundreds of billions flow home.</span><span style="color: black; font-family: "franklin gothic medium"; font-size: 4pt;"></span></div>
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<span style="color: black; font-family: "symbol"; font-size: 10pt;">·<span style="font: 7pt "Times New Roman";">
</span></span><span style="color: black; font-family: "franklin gothic medium"; font-size: 4pt;"> </span></div>
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<span style="color: black; font-family: "symbol"; font-size: 10pt;">·<span style="font: 7pt "Times New Roman";">
</span></span><span style="color: black; font-family: "franklin gothic medium"; font-size: 12pt;">Eliminates the incentive
to over-leverage corporations by putting debt and equity on an equal tax
footing. Corporations borrow too much today, reducing their stability,
because they have a tax motive to do so.</span><span style="color: black; font-family: "franklin gothic medium"; font-size: 4pt;"></span></div>
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</span></span><span style="color: black; font-family: "franklin gothic medium"; font-size: 4pt;"> </span></div>
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<span style="color: black; font-family: "symbol"; font-size: 10pt;">·<span style="font: 7pt "Times New Roman";">
</span></span><span style="color: black; font-family: "franklin gothic medium"; font-size: 12pt;">Increases the equity
returns to hard-hit IRAs, 401(k)s, and other retirement savings by up to 54%,
restoring the value of savings and rewarding responsible middle class people
who live within their means and save for the future. </span><span style="color: black; font-family: "franklin gothic medium"; font-size: 4pt;"></span></div>
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<span style="color: black; font-family: "symbol"; font-size: 10pt;">·<span style="font: 7pt "Times New Roman";">
</span></span><span style="color: black; font-family: "franklin gothic medium"; font-size: 12pt;">Unlike the current
bail-outs that are subsidizing operations that have failed, it provides
incentive to place high profit winning operations in the U.S., revitalizing
our economy. We should build our economy on stars, not on dogs.</span><span style="color: black; font-family: "franklin gothic medium"; font-size: 4pt;"></span></div>
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</span></span><span style="color: black; font-family: "franklin gothic medium"; font-size: 12pt;">Reduces the current
over-focus on speculative growth and returns attention to solid cash income.</span><span style="color: black; font-family: "franklin gothic medium"; font-size: 4pt;"></span></div>
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</span></span><span style="color: black; font-family: "franklin gothic medium"; font-size: 4pt;"> </span></div>
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<span style="color: black; font-family: "symbol"; font-size: 10pt;">·<span style="font: 7pt "Times New Roman";">
</span></span><span style="color: black; font-family: "franklin gothic medium"; font-size: 12pt;">Eliminates the tax
incentive to keep cash locked in corporations, liberating investment dollars
to flow to the best overall prospects.</span><span style="color: black; font-family: "franklin gothic medium"; font-size: 4pt;"></span></div>
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</span></span><span style="color: black; font-family: "franklin gothic medium"; font-size: 4pt;"> </span></div>
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<span style="color: black; font-family: "symbol"; font-size: 10pt;">·<span style="font: 7pt "Times New Roman";">
</span></span><span style="color: black; font-family: "franklin gothic medium"; font-size: 12pt;">Stops the use of an
individual tax subsidy that applies equally to investments in foreign
operations, redirecting those dollars to our own economy.</span><span style="color: black; font-family: "franklin gothic medium"; font-size: 4pt;"></span></div>
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</span></span><span style="color: black; font-family: "franklin gothic medium"; font-size: 12pt;">Shuts down tax abuses.</span><span style="color: black; font-family: "franklin gothic medium"; font-size: 4pt;"></span></div>
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</span></span><span style="color: black; font-family: "franklin gothic medium"; font-size: 12pt;">Best of all, Shared
Economic Growth does all of this without adding a dollar to the deficit and
while improving the fairness of our income tax structure.</span><span style="color: black; font-family: "franklin gothic medium"; font-size: 4pt;"></span></div>
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<br />SharedGrowthhttp://www.blogger.com/profile/14044657568079494971noreply@blogger.com0tag:blogger.com,1999:blog-5805195981484952288.post-25633512811572930902016-02-24T13:20:00.000-08:002016-03-02T15:45:17.205-08:00Shared Economic Growth: No Tricks, Just a Powerful Tool to Change America<style>@font-face {
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<span style="color: navy; font-family: "franklin gothic medium"; font-size: 18pt;">Shared Economic
Growth: <br />
No Tricks, Just a Powerful Tool to Change America</span></div>
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<span style="font-family: "franklin gothic medium"; font-size: 12pt;">Shared Economic
Growth is a simple 3 page bill that keeps the well established enforcement
mechanisms of our income tax system in place, and improves them by eliminating
incentives for corporate tax and capital gains abuses. It replaces a losing war
to control corporate income with a simple, easily enforced tax on 1099 income.</span></div>
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<span style="font-family: "franklin gothic medium"; font-size: 12pt;">Corporations are
allowed a deduction for dividends they pay out, limited to the amount of their
pre-deduction tax liability. To the extent that they elect to pay out
dividends, they are thus freed from U.S. tax.</span></div>
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<span style="font-family: "franklin gothic medium"; font-size: 12pt;">Favorable tax rates
on capital gains and dividends are eliminated. This causes the dividend
deduction to be self funding for dividends paid to individuals. Because
corporate earnings are increased by up to 54% due to the lack of U.S. tax,
lower bracket shareholders come out ahead, and upper bracket shareholders come
out close to even on this trade.</span></div>
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<span style="font-family: "franklin gothic medium"; font-size: 12pt;">Foreign portfolio
investors are subjected to an offsetting 35% withholding tax, holding them
neutral</span></div>
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<span style="font-family: "franklin gothic medium"; font-size: 12pt;">Currently the U.S.
gives corporations a dollar-for-dollar credit for taxes paid to foreign
countries, making them care less about the tax those countries impose. Most of
our trading partners do NOT allow their corporations a credit for U.S. tax,
making their companies shy away from high U.S. tax rates. They exempt foreign
income. Because Shared Economic Growth would eliminate U.S. corporate level tax
on both foreign<i> and domestic</i> income, we could change the foreign
tax credit to a deduction, effectively matching our trading partners and
complying with our treaty obligations, while forcing more dividends to be paid
to - and taxed to - shareholders.</span></div>
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<span style="font-family: "franklin gothic medium"; font-size: 12pt;">To make up for the
revenue loss on dividends flowing to IRAs, 401ks, and defined benefit
retirement plans, individual income over $500,000 a year is subjected to a tax
at the rate of the employee FICA tax imposed on middle class wage income - a
tax that people currently don't pay on most of that over $500,000 income.
The all-in effective income tax rate on persons earning over $500,000,
including state taxes, would still be less than 40% on average. This improves
the fairness of federal funding for overall retirement security. <b>And,
since the tax revenue lost on dividends paid to retirement savings accounts is
only temporary, the net tax dollars collected from this offset will be recycled
back to help the government to get through the coming Social Security funding
crisis.</b> Both personal retirement savings AND tax revenues for Social
Security would be increased.<b> </b> </span></div>
<br />SharedGrowthhttp://www.blogger.com/profile/14044657568079494971noreply@blogger.com0tag:blogger.com,1999:blog-5805195981484952288.post-65762590628790699662013-03-17T10:33:00.000-07:002013-08-09T13:36:40.314-07:00Jordan Weiss in Tax Notes with similar thoughts<div class="MsoNormal">
<span style="color: #e52500; font-family: "Arial","sans-serif"; font-size: 9pt; text-transform: uppercase;">March 25, 2013</span></div>
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<span style="font-family: "Arial","sans-serif";">A Tax Increase Republicans and Democrats Should Embrace</span></div>
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<b><span style="font-family: "Arial","sans-serif"; font-size: 10pt;">by Jordan P. Weiss</span></b></div>
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<b><span style="font-family: "Arial","sans-serif"; font-size: 11.5pt;"><img alt="Summary by Tax Analysts®" border="0" height="14" src="https://mail.google.com/mail/?ui=2&ik=f26eae4ff0&view=att&th=13da20eca8dc8cfd&attid=0.0.1&disp=emb&zw&atsh=1" width="145" /></span></b></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 11.5pt;">Jordan
P. Weiss lauds David Cay Johnston's approach to revising the
accumulated earnings tax, calling it a "common-sense approach," and
offers a few suggestions of his own for further tax reform.</span></div>
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<b><span style="font-family: "Arial","sans-serif"; font-size: 11.5pt;"><img alt="Full Text Published by Tax Analysts®" border="0" height="14" src="https://mail.google.com/mail/?ui=2&ik=f26eae4ff0&view=att&th=13da20eca8dc8cfd&attid=0.0.2&disp=emb&zw&atsh=1" width="200" /></span></b></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 11.5pt;">To the Editor:
</span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 11.5pt;">I
woke up this morning to yet another newspaper article bemoaning the
accumulation of offshore earnings of United States
corporations. A few weeks past, David Cay Johnston gave readers a
common-sense approach to the accumulated earnings tax to, in part,
ameliorate the issue. Johnston, "How the Accumulated Earnings Tax Can
Stimulate Growth,"
<i>Tax Notes</i>, Mar. 11, 2013, p. 1265 </span><a href="http://services.taxanalysts.com/taxbase/tni3.nsf/86255f190073234e85255b580068db3a/77c485d233796e4a85257b29000e30d9?OpenDocument" target="_blank"><span style="color: #00357e; font-family: "Arial","sans-serif"; font-size: 11.5pt; text-decoration: none;"><img alt="2013 WTD 47-21: Viewpoint" border="0" height="13" src="https://mail.google.com/mail/?ui=2&ik=f26eae4ff0&view=att&th=13da20eca8dc8cfd&attid=0.0.3&disp=emb&zw&atsh=1" width="11" /></span></a><span style="font-family: "Arial","sans-serif"; font-size: 11.5pt;">.</span><span style="font-family: "Arial","sans-serif"; font-size: 11.5pt;">
An approach he concluded would provide better returns for investors,
more jobs for Americans, and encourage entrepreneurial spirit. While
common sense is increasingly uncommon in the current tax debates,
everyone seems to agree that we need to bring the cash
held offshore by American corporations back home. In that spirit, I
offer the following suggestions (to be coupled with Mr. Johnston's
proposed accumulated earnings proposal):
</span></div>
<div class="MsoNormal" style="margin-bottom: 7.5pt; margin-left: 0in; margin-right: 0in;">
<span style="font-family: Symbol; font-size: 10pt;">·<span style="font: 7pt "Times New Roman";">
</span></span><span style="font-family: "Arial","sans-serif"; font-size: 11.5pt;">Make the dividend of the offshore foreign earnings tax deductible to the corporation.
</span></div>
<div class="MsoNormal" style="margin-bottom: 7.5pt; margin-left: 0in; margin-right: 0in;">
<span style="font-family: Symbol; font-size: 10pt;">·<span style="font: 7pt "Times New Roman";">
</span></span><span style="font-family: "Arial","sans-serif"; font-size: 11.5pt;">Impose a 30 percent final withholding tax on the dividend, even to 401(k)s and tax-exempt organizations.
</span></div>
<div class="MsoNormal" style="margin-bottom: 7.5pt; margin-left: 0in; margin-right: 0in;">
<span style="font-family: Symbol; font-size: 10pt;">·<span style="font: 7pt "Times New Roman";">
</span></span><span style="font-family: "Arial","sans-serif"; font-size: 11.5pt;">Eliminate the foreign tax credit on the dividend.</span></div>
<div class="MsoNormal">
<span style="font-family: "Arial","sans-serif"; font-size: 11.5pt;"><br />
If the dividends of the foreign earnings held offshore are deductible to
corporations, essentially we would have eliminated corporate tax on
such earnings. Corporations would be hard-pressed to complain about the
high United States tax rate on such earnings.
</span></div>
<div class="MsoNormal" style="margin-top: 12pt;">
<span style="font-family: "Arial","sans-serif"; font-size: 11.5pt;">A
30 percent withholding tax, call it the "Buffett tax," would apply to
the dividend, which ought to make even the most
hardened Democrat support the tax. It would be fairly easy to draft
mechanisms to make sure we are only subjecting the foreign earnings to
the withholding tax.
</span></div>
<div class="MsoNormal" style="margin-top: 12pt;">
<span style="font-family: "Arial","sans-serif"; font-size: 11.5pt;">We would have corporate integration (a single level of tax) on such foreign earnings which ought to make even the most
hardened Republican support the tax. </span></div>
<div class="MsoNormal" style="margin-top: 12pt;">
<span style="font-family: "Arial","sans-serif"; font-size: 11.5pt;">The tax-exempts might complain; however, they are getting a larger distribution because of the lack of corporate tax on
such earnings. </span></div>
<div class="MsoNormal" style="margin-top: 12pt;">
<span style="font-family: "Arial","sans-serif"; font-size: 11.5pt;">Shareholders will certainly demand the cash dividends, and corporate boards will hold onto such cash at their peril.
</span></div>
<div class="MsoNormal" style="margin-top: 12pt;">
<span style="font-family: "Arial","sans-serif"; font-size: 11.5pt;">Corporate raiders will eye the cash hoards and merger and acquisition activity would be enhanced.
</span></div>
<div class="MsoNormal" style="margin-top: 12pt;">
<span style="font-family: "Arial","sans-serif"; font-size: 11.5pt;">Capital reallocation to its most productive uses will occur.
</span></div>
<div class="MsoNormal" style="margin-top: 12pt;">
<span style="font-family: "Arial","sans-serif"; font-size: 11.5pt;">The tax would be borne mostly by "millionaires and billionaires" who own most of the stock.
</span></div>
<div class="MsoNormal" style="margin-top: 12pt;">
<span style="font-family: "Arial","sans-serif"; font-size: 11.5pt;">And as concluded by Mr. Johnston, we would provide better returns for investors, more jobs for Americans and encourage
entrepreneurial spirit. </span></div>
<div class="MsoNormal" style="margin-top: 12pt;">
<span style="font-family: "Arial","sans-serif"; font-size: 11.5pt;">It might just bring some of those earnings back home!
</span></div>
<span style="font-family: "Arial","sans-serif"; font-size: 11.5pt;">Very truly yours,<br />
<br />
Jordan P. Weiss<br />
Mar. 19, 2013</span>SharedGrowthhttp://www.blogger.com/profile/14044657568079494971noreply@blogger.com0tag:blogger.com,1999:blog-5805195981484952288.post-51661762766725460492013-03-09T15:19:00.003-08:002013-03-09T15:19:53.215-08:00Shared Economic Growth: Discouraging Corporate Misdeeds, Empowering People
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<b><u><span style="font-family: "Franklin Gothic Medium"; font-size: 14pt;">Making
Corporations More Responsive</span></u></b><span style="font-family: "Franklin Gothic Medium"; font-size: 14pt;"><br />
<br />
</span><b><span style="font-family: "Franklin Gothic Medium"; font-size: 14pt;">Transparency</span></b><span style="font-family: "Franklin Gothic Medium"; font-size: 14pt;"><br />
<br />
</span><span style="font-family: "Franklin Gothic Medium"; font-size: 14pt;">Enron. WorldCom. Global Crossing. One could fill a page with
the names of corporate scandals in which companies fooled investors and left
employees without jobs or pensions. The Sarbanes-Oxley accounting controls
legislation was supposed to help with this problem, but try downloading the
annual report for a corporation and see if you can tell whether or not the corporation
is truly profitable. There is one foolproof way to tell, and that is by asking
the same question that led truly savvy investors to spot Enron's troubles well
before the company's collapse: Is the company generating cash? The Shared
Economic Growth proposal would require any company seeking the benefit of the
dividends paid deduction to pay its taxable earnings, in cash, to its
shareholders. It would be impossible to hide behind complex accounting or
confusing jargon - either the company would have the money, or it would not. If
a company wanted more cash to invest, it would need to convince the public to
buy new stock. Any company that had failed to respond to previous investor
demands to "show them the money" would need to do some serious
explaining in order to persuade anyone to invest their hard-earned cash in it.
Wouldn't that increase your confidence in your investments?</span><span style="font-family: "Franklin Gothic Medium"; font-size: 14pt;"><br />
<br />
</span><b><span style="font-family: "Franklin Gothic Medium"; font-size: 14pt;">Responsiveness</span></b><span style="font-family: "Franklin Gothic Medium"; font-size: 14pt;"><br />
<br />
We have all read the stories of corporate CEOs who were paid $50 million while
their corporations tanked. In some cases, the executives' poor performance had
no consequences at all. In others, CEOs were forced out, but with additional
huge severance packages to soothe the pain of parting. What can shareholders do
in reaction? They can refuse to vote for the director candidates that the
corporation offers, but they cannot vote for alternatives. They can sell their
shares and take a loss, but the corporation still keeps its cash. The
shareholders, for the most part, are effectively powerless.<br />
<br />
The same holds true when a company abuses its employees, creates an
environmental disaster, cheats the U.S. government, or otherwise misbehaves.
Except in the rare case where a government agency imposes a truly serious fine,
there is no effective mechanism for the American people to force corporations
to be good citizens. <br />
<br />
Under the Shared Economic Growth proposal, however, corporations would lose 35%
of their earnings unless they paid them out as dividends. That would create
heavy pressure for a company to give up its cash. If it wanted more cash to
invest a grow, the company would need to go to the market and convince people
that it deserved their investment dollars. It would come to you, an investor,
and ask you to trust it with your money.<br />
<br />
If a corporation wasted its investors' money on under-performing executives or
if it was caught doing something evil, would you invest? The public would
finally have a real source of control. Companies that misbehaved would see
their funding dry up.<br />
<br />
Wouldn't that be a good thing? </span><span style="color: black; font-family: "Franklin Gothic Medium"; font-size: 14pt;"></span></div>
<br />SharedGrowthhttp://www.blogger.com/profile/14044657568079494971noreply@blogger.com0tag:blogger.com,1999:blog-5805195981484952288.post-40793493236519906932013-03-09T15:14:00.002-08:002013-03-09T15:14:39.151-08:00Shared Economic Growth: Why Changing a 35% Tax Increases Returns on Savings by 54%
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<b><u><span style="color: black; font-family: "Franklin Gothic Medium"; font-size: 14pt;">How a 35% Tax Takes Away a 54% Opportunity</span></u></b><span style="color: black; font-family: Georgia; font-size: 13.5pt;"><br />
<br />
</span><span style="color: black; font-family: "Franklin Gothic Medium"; font-size: 14pt;">The U.S. corporate income tax is imposed at a
35% rate. So, for $100 of pretax earnings, a corporation will pay tax of $35,
leaving $65 to pay to its shareholders.<br />
<br />
To see the real impact of removing this burden through a dividends paid
deduction, however, you need to turn these numbers around and look at them from
the point of view of the shareholder currently receiving $65, or from the point
of view of the corporation currently earning $65 after tax from its U.S.
operations. If you receive $65 after tax now, removing the U.S. corporate tax
burden will allow you to receive $100. That is an increase of $35 over the $65
you had before. That's a 54% increase - the amount of money you receive will
increase by more than half.<br />
<br />
If that is money flowing into your pension fund or tax free college fund, your
earnings will grow much faster.<br />
<br />
From the point of view of a corporation today, it means that it can boost its
profits by 54% just by firing its American workers and </span><span style="color: black; font-family: "Franklin Gothic Medium"; font-size: 14pt;"><span style="color: black; text-decoration: none;">moving the operations
abroad</span></span><span style="color: black; font-family: "Franklin Gothic Medium"; font-size: 14pt;">. Trying to address this
problem by </span><span style="color: black; font-family: "Franklin Gothic Medium"; font-size: 14pt;"><span style="color: black; text-decoration: none;">repealing deferral</span></span><span style="color: black; font-family: "Franklin Gothic Medium"; font-size: 14pt;">, as some have suggested, would not work, because then we would
have a situation where a foreign corporation would be able to earn an automatic
54% profit by buying a U.S. corporation, firing the old U.S. headquarters
staff, and making it a foreign owned corporation. Only Shared Economic Growth
will reverse this insane incentive and encourage companies to create good jobs
here in America.<br />
<br />
Wouldn't that be best?</span><span style="color: black; font-family: "Franklin Gothic Medium"; font-size: 14pt;"></span></div>
<br />SharedGrowthhttp://www.blogger.com/profile/14044657568079494971noreply@blogger.com0tag:blogger.com,1999:blog-5805195981484952288.post-15697816792032921232013-03-09T15:09:00.001-08:002013-03-09T15:09:54.726-08:00Shared Economic Growth: Attract Valuable Jobs, Don't Force Them to Be Sold
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<b><u><span style="color: black; font-family: Georgia; font-size: 13.5pt;">Eliminating Deferral Is A
Bad Idea</span></u></b><span style="color: black; font-family: Georgia; font-size: 13.5pt;"><br />
</span><span style="color: black; font-family: Georgia; font-size: 12pt;"><br />
The current American corporate tax system, like the corporate tax systems of
most countries, taxes corporations more lightly on their foreign earnings than
on their U.S. earnings. Most of our competitor nations have what is called a
territorial tax system, under which foreign earnings are never taxed. We have a
deferral system, under which most foreign subsidiary earnings can be protected
from U.S. tax until they are paid up to the U.S. parent as dividends. This, of
course, provides a </span><span style="color: black;"><span><span style="font-family: Georgia; font-size: 12pt;">bad incentive</span></span></span><span style="color: black; font-family: Georgia; font-size: 12pt;">. All U.S. corporations
have an incentive to move their high value, high profit activities out of the
U.S. in order to enjoy a lower tax rate, and earn up to 54% more profit. For
this reason, some people in our government have proposed getting rid of
deferral and taxing the worldwide income of U.S. corporations currently.<br />
<br />
This may sound like a nice idea, but think it through. The U.S. is not unique
anymore. We no longer have all the money - in fact, we are heavily indebted to
other countries. We no longer have our gigantic technical edge - that lead has
faded and we now import more goods of all kinds, including high technology
goods, than we export. If our corporations are unable to compete, they will be
forced into bankruptcy or will be bought out by foreign rivals.<br />
<br />
Consider both common sense and experience. Consider a company that currently
has significant foreign activities in tax friendly countries. Suppose that we
now end deferral and subject all of its worldwide income to a 35% tax.
Suddenly, the corporation is 35% less profitable than it used to be. Put
another way, suddenly the corporation would be </span><span style="color: black;"><span><span style="font-family: Georgia; font-size: 12pt;">54% more</span></span></span><span style="color: black; font-family: Georgia; font-size: 12pt;"> valuable if it were owned
by a foreign parent. Do you think it will survive as a U.S. owned corporation,
or will it be bought out and have all its U.S. headquarters jobs eliminated?<br />
<br />
<br />
</span><b><span style="color: black; font-family: Georgia; font-size: 13.5pt;">Eliminating
Deferral in the Real World</span></b><span style="color: black; font-family: Georgia; font-size: 12pt;"><br />
<br />
Now consider experience. Our country has seen two cases where deferral was
eliminated for particular industries or parts of industries, and in both cases,
the results were exactly what you would expect.<br />
<br />
First, in the insurance industry, U.S. based companies must pay full, current
U.S. tax on all income from insuring U.S. risks, even if they reinsure those
risks with a foreign affiliate, i.e. even if a foreign subsidiary takes on the
risk of loss. Foreign based insurance companies insuring U.S. risks don't have
that problem - they reinsure with a foreign affiliate and avoid U.S. tax. A
coalition of insurance companies recently sent a letter to the House Ways and
Means Committee leaders that did not ask for relief from taxation for the
companies in question, but instead that tax be imposed on profits</span><span style="font-family: Georgia; font-size: 12pt;"> earned by their foreign competitors
from insuring and reinsuring U.S. risks. The coalition pointed out that the
current system puts them at an intolerable disadvantage that is destroying the
U.S. based companies. "For example, White Mountains Group, EverestRe
Group, Arch Capital and PXRe Group LTD moved their domiciles offshore into a
no-tax jurisdiction and continue to cover US-based risks. Other US companies
and lines of business have simply been acquired by foreign insurance companies
domiciled in low-tax or no-tax jurisdictions."<br />
<br />
A similar experiment in the shipping industry had comparable results. A recent
letter from the Federal Policy Group, a tax lobbying organization, that was
printed in Tax Notes, Sept. 10, 2007, p. 997, summarizes the effects of ending
deferral on shipping income in 1986 and restoring it in 2004:<br />
<br />
<i>"The results of the 1986 act 'experiment' were dramatic. Much of the
decline was attributable to the acquisition of U.S.-based shipping companies by
foreign competitors not subject to tax on their shipping income. For example,
Signapore-based Neptune Orient Lines in 1997 acquired U.S.-based American
President Lines, then the largest U.S. shipper. In 1999 Denmark-based A.P.
Moller Group acquired the international liner business of Sea-Land
Services, Inc., a subsidiary of CSX Corp. and previously the largest U.S.
shipper of containers. By becoming foreign-owned, these shipping businesses
were able to shed themselves of crippling subpart F taxation and compete again
in the global markets. Of course, the movement of these businesses overseas
meant the loss of headquarter jobs and related employment in the United States.<br />
<br />
"Fewer U.S.-based shipping companies also meant fewer potential investors
in the U.S.-flag "Jones Act" domestic trade, which is limited to
U.S.-owned enterprises. Thus, one should not have been surprised that the
number of U.S.-flag ships also declined following the 1986 act change. Over the
1985-2004 period, the U.S.-flag fleet declined from 737 to 412 vessels, causing
U.S.-flag shipping capacity, measured in deadweight tonnage, to drop by more
than 50 percent... A 2002 Massachusetts Institute of Technology study expressed
concern that the [Effective US Control] fleet, eviscerated following the 1986
act changes, was not large enough to satisfy U.S. strategic needs.<br />
<br />
"The 2002 MIT study pointed directly at the loss of deferral as the
culprit.<br />
<br />
"The combination of U.S. tax laws passed in 1975 and 1986 resulted in a
business environment where EUSC shipowners could no longer avoid paying tax on
current income. This change put them at a major disadvantage to their foreign
competitors who often paid little or no income tax... Consequently, EUSC
shipowners have greatly reduced their investment in EUSC ships since the Tax
Reform Act of 1986... The impact of the deferral's restoration on OSG, the
leader in urging the 2004 legislation, was nearly immediate. In 2005 OSG posted
exceptional financial results, earning $465 million in net income, a company
record attributed in large part to the 2004 legislation. OSG had gained the
confidence needed to take investment risks and again become a growing
enterprise.</i><span></span></span></div>
<div class="MsoNormal">
<i><span style="font-family: Georgia; font-size: 12pt;">In
January 2005, just three months after enactment of the 2004 legislation, OSG
acquired Stelmar Shipping, an Athens-based international shipper of crude and
petroleum products, thereby reversing the trend of foreign takeovers of U.S.
shipping companies. The acquisition of Stelmar increased the size of OSG's
foreign-flag fleet by 80 percent, from 50 to 90 vessels. <br />
<br />
OSG also began committing itself to a major expansion of its U.S.-flag fleet.
Before enactment of the 2004 act, OSG's U.S. fleet had been declining in size.
In 1996 OSG's U.S.-flag fleet consisted of just 16 operating vessels, and by
2004, the fleet had shrunk to just 10 operating vessels. In June 2005 OSG
ordered 10 new Jones Act tankers to be built at the Aker Philadelphia shipyard,
today an employer of approximately 1,300. And in February and March 2007, OSG
announced plans to commission six new U.S.-flag vessels to be built at the Aker
Philadelphia shipyard and Alabama's Bender shipyard."</span></i><span style="font-family: Georgia; font-size: 12pt;"><br />
<br />
<br />
<b>A Better Solution</b><br />
<br />
The threat to U.S. corporations from repeal of deferral is not just a bogeyman.
Experience shows that it is real, and that makes sense. Corporate tax makes a
huge difference in the value of a corporation. If we suddenly inflict a huge
value drop on our U.S. corporations that can be undone simply by having them
acquired by foreigners, they will be acquired. That is life in the real world in
the 21st century.<br />
<br />
Fortunately, we have a better option. The Shared Economic Growth proposal gets
rid of the incentive to export U.S. operations in a manner that actually gives
U.S. corporations a competitive advantage. We can easily afford it, and our economy
needs it.<br />
<br />
Wouldn't that be a better idea?</span></div>
<br />SharedGrowthhttp://www.blogger.com/profile/14044657568079494971noreply@blogger.com0tag:blogger.com,1999:blog-5805195981484952288.post-53517139411032763342013-03-09T15:03:00.000-08:002013-03-09T15:03:08.471-08:00Shared Economic Growth: Corporate Tax Hurts Wage Earners and Middle-Class Savers
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<u><span style="font-family: Georgia; font-size: 13.5pt;">Who
Pays Corporate Tax?</span></u><span style="font-family: Georgia; font-size: 13.5pt;"><br />
<br />
</span><span style="font-family: Georgia; font-size: 12pt;">The direct burden of
corporate tax, of course, falls on the shareholders, including people who
invest in stock through their pension savings accounts. But over time the burden
of corporate tax also falls on employees through lower wages and upon consumers
through higher prices.<br />
<br />
How does this work? Corporate managers do NOT say "gee, corporate tax
rates have just been lowered, let's give our employees bigger bonuses and cut
our prices!" Instead, it works through the way corporations make
decisions.<br />
<br />
Corporations compete against each other for investment capital. If a
corporation does not provide a certain level of return to its shareholders,
then people will tend to sell the stock of the under performing company and buy
shares in other companies instead. So, when a corporation is deciding whether
or not to make an investment, it first produces a set of projected economics to
judge what kind of risk weighted, after tax return it is likely to make on the
investment. If the projected return is above a cut-off number, commonly known
as the hurdle rate, the corporation will make the investment. If the projected
return is below the hurdle rate, the corporation will hold on to its cash
instead.<br />
<br />
Say a given investment will earn $100 before tax on an investment of $85 (i.e.
it will get a return of its $85 investment plus another $15 in profit), and
that the corporation has a 15% hurdle rate. If the corporation was not subject
to tax, it would make the investment. It will make $15 beyond its $85
investment, and $15 is more than 15% of $85, so it will go forward with the
deal. But now suppose that the corporation is subject to a 35% tax. That tax
will only apply to the net profit of $15, but still it will be $5.25. So, now
the after tax profit will be only $15-$5.25=$9.75. $9.75 is only 11.5% of the
$85 investment, well below the 15% hurdle rate. So, with tax, the corporation
will not make the investment.<br />
<br />
Why do we care? We care because every corporation out there is making similar
decisions. If corporations operating within the American economy were not
subject to tax, they would decide to invest capital in many projects that they
would not invest in today. Those projects would compete for employees, and they
would provide goods and services that would compete against each other in the
marketplace.<br />
<br />
What does that mean to you? If more companies have more projects in America
seeking to hire American workers, that increases the market power of each
worker. That means that the corporations will have to share some of that
profitability with their workers in the form of better wages and benefits. The </span><a href="http://www.sharedeconomicgrowth.org/ourchildrensinheritance.html"><span style="color: windowtext; font-family: Georgia; font-size: 12pt; text-decoration: none;">income stagnation</span></a><span style="font-family: Georgia; font-size: 12pt;"> that the middle class has seen for the last 30 years
due to their shrinking market power would be reversed. Working Americans would
get a bigger piece of the bigger economic pie. What the globalized labor market
has taken away, the energized labor market created by Shared Economic Growth
would give back.<br />
<br />
If more companies are willing to take the risk of entering the market to
produce competing goods, that heightened competition will result in better
products at lower prices. The average person's dollar would go farther, again
helping to undo the effects of income stagnation.<br />
<br />
Both of these effects would get a boost from the general efficiency gains that
the Shared Economic Growth proposal would produce. By stimulating corporations
to pay their earnings out as dividends, investment dollars would be freed up to
flow to the best new investments in the overall economy, instead of the best
investment that happens to be available to a particular corporation (or the
best <i>foreign</i> investment available to that corporation). By
eliminating the incentive for corporations to move their technology out of the
U.S., Shared Economic Growth would help us to become the world's innovation
powerhouse again. By providing American workers with their fair share of the
benefits of their labor, Shared Economic Growth would stimulate worker
enthusiasm and involvement, boosting real productivity.<br />
<br />
Thus, while the benefits of Shared Economic Growth would initially fall to the
shareholders, including the pension funds that own 28% of U.S. shares, as the
new investments matured it would flow out to the workers and consumers across
the economy. The burden of corporate tax falls on all of us, and lifting that
burden in favor of shareholder level taxes would make everyone better off.<br />
<br />
Wouldn't that be more sensible?</span></div>
<br />SharedGrowthhttp://www.blogger.com/profile/14044657568079494971noreply@blogger.com0tag:blogger.com,1999:blog-5805195981484952288.post-9029803973899860902013-03-09T14:58:00.003-08:002013-03-09T14:58:53.313-08:00Shared Economic Growth Reveals the Myth: Americans Have Been Fooled into Thinking Corporate Tax Is a Tax on the RichShared Economic Growth Reveals the Myth: Americans Have Been Fooled into Thinking Corporate Tax Is a Tax on the Rich
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<b><u><span style="color: black; font-family: Georgia; font-size: 13.5pt;">The Stealth Tax</span></u></b><span style="color: black; font-family: "Times New Roman"; font-size: 12pt;"><br />
<br />
</span><span style="color: black; font-family: Georgia; font-size: 12pt;">Corporations
are not living things, they are the collective investments of a group of
people. They do not bear the burden of tax . Instead, corporations pay tax on
behalf of their shareholders. Absent the corporate tax, the shareholders would
earn 54% more on their investments. That applies equally to every shareholder,
rich or poor, including those who hold their investment through an IRA, 401(k),
or other supposedly tax free retirement fund. <br />
<br />
If high income shareholders received the corporate earnings directly, they
would pay tax on them at a 35% rate (which will go up to 39.6% once the Bush
tax cuts expire at the top end). Middle class shareholders would pay tax at a
rate of 28% or less. Compared with direct taxation, then, the corporate tax is
not </span><span style="color: black;"><a href="http://www.sharedeconomicgrowth.org/enforcingprogressivity.html"><span style="color: black; font-family: Georgia; font-size: 12pt; text-decoration: none;">progressive</span></a></span><span style="color: black; font-family: Georgia; font-size: 12pt;">, because it taxes everyone at the same rate.<br />
<br />
Worse than that, though, it taxes people's supposedly tax free pension savings.
This is where the math becomes interesting. As explained in the </span><span style="color: black;"><a href="http://wsm.ezsitedesigner.com/Preview.go?op=preview_next_page&page_id=15"><span style="color: black; font-family: Georgia; font-size: 12pt; text-decoration: none;">draft bill and summary</span></a></span><span style="color: black; font-family: Georgia; font-size: 12pt;">, if we eliminate
special </span><span style="color: black;"><a href="http://wsm.ezsitedesigner.com/Preview.go?op=preview_next_page&page_id=13"><span style="color: black; font-family: Georgia; font-size: 12pt; text-decoration: none;">capital gains rates</span></a></span><span style="color: black; font-family: Georgia; font-size: 12pt;">, if we stop giving U.S.
corporate shareholders credit for foreign taxes the same way that foreign
countries have stopped giving their corporate shareholders credit for U.S.
taxes, and if foreign investors are held tax neutral, then once the
individual rates go back up to their prior levels, a dividends paid deduction
would pay for itself except for the fact that a little over 28% of all U.S.
stock is held by IRAs, pension funds, and other retirement accounts which don't
pay tax on the dividends they receive. To offset this revenue leak, the Shared
Economic Growth proposal would put a new 7.65% tax on individual income in
excess of $500,000 per year - a figure equivalent to the employment taxes that
apply to the full wage income of ordinary workers but that does NOT apply to
income in excess of $106,800 per year. That offset is actually generous, but it
leaves room for the inevitable political compromises.<br />
<br />
But think about what this means. If the special provisions that cause capital
gains to be more lightly taxed than wages are eliminated, then the only cost of
permitting corporations to have a dividends paid deduction is that a 7.65%
marginal tax needs to be imposed on very high income taxpayers <b>solely
to make up for removing the hidden 35% tax on pension savings</b>. When the
dividends paid deduction has been raised before, policymakers had exactly that
discussion. "A large portion of the dividends go to non-taxable pension
funds. People are not complaining about pension investments being subjected to
a 35% tax, because they don't understand it. But if we impose a new individual
level tax to make up for that loss, people will complain.</span><span style="font-family: Georgia; font-size: 12pt;"> So let’s <span style="color: black;">just
forget about the dividends paid deduction."</span></span><span style="color: black; font-family: "Times New Roman"; font-size: 12pt;"></span></div>
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<b><span style="color: black; font-family: Georgia; font-size: 12pt;">Congress and the American people have a
straightforward choice: Is it better to impose a 35% tax on the income from the
pension savings of all working Americans, or to impose a 7.65% tax on
individual income in excess of $500,000 per year?</span></b><span style="color: black; font-family: Georgia; font-size: 12pt;">. If Congress prefers
the 35% tax on pension earnings, then Congress should impose that tax in an
open and straightforward way rather than by sneaking it in as a
"corporate" tax and pretending it is a tax on the rich. If
Congress thought that the American people would support that choice when it was
clearly put to them, then Congress would be free to tax the pension income
directly rather than to impose the AGI tax. Either way, though, there
is no reason <i>not</i> to enact the dividends paid deduction and
remove the tremendously harmful burden that the corporate tax places on
the </span><span style="color: black;"><a href="http://www.sharedeconomicgrowth.org/middleclassmarketpower.html"><span style="color: black; font-family: Georgia; font-size: 12pt; text-decoration: none;">American economy.</span></a></span><span style="color: black; font-family: Georgia; font-size: 12pt;"> While one may grant
that politicians may sometimes legitimately hide the ball a little on subjects
that are difficult to explain to the public, surely no lawmaker could
comfortably say, "I want to impose a 35% tax on the pension earnings of
working Americans, but I don't want them to realize that I am doing it, so I am
going to hide it behind a smoke screen that makes U.S. operations 54% less
profitable than foreign ones and that seriously reduces the efficiency of our
economy. It is important enough to fool the taxpayers into believing that we
don't tax their pension earnings that the resulting huge cost to the U.S. economy
from this smoke screen is worth it." Yet that statement, in essence,
is the only argument for opposing a dividends paid deduction. Until now, this
is the choice that both political parties have been making.</span><span style="color: black; font-family: "Times New Roman"; font-size: 12pt;"></span></div>
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<br /></div>
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<span style="color: black; font-family: Georgia; font-size: 12pt;">The Shared Economic Growth proposal would get rid of the stealth
tax. It would bring taxes out in the open where they can be seen, and it would
make the tax system simpler so that people could understand what everyone
actually pays.<br />
<br />
Wouldn't that be more honest?</span><span style="font-family: Georgia; font-size: 12pt;">
</span></div>
<br />SharedGrowthhttp://www.blogger.com/profile/14044657568079494971noreply@blogger.com0tag:blogger.com,1999:blog-5805195981484952288.post-59100695609608143762013-03-09T14:52:00.000-08:002013-03-09T14:53:16.951-08:00Shared Economic Growth: Capital Gains - Unstable Speculation vs. Solid Cash Earnings
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<i><span style="font-family: Georgia; font-size: 12pt;">"That all the capital
employed in paper speculation is barren and useless, producing, like that on a
gaming table, no accession to itself, and is withdrawn from commerce and
agriculture where it would have produced addition to the common mass: That it
nourishes in our citizens habits of vice and idleness instead of industry and
morality: That it has furnished effectual means of corrupting such a portion of
the legislature, as turns the balance between the honest voters which ever way
it is directed."</span></i><span style="font-family: Arial; font-size: 12pt;"><br />
<br />
</span><span style="font-family: Georgia; font-size: 12pt;">-Thomas Jefferson on speculators</span><br />
<span style="font-family: Georgia; font-size: 12pt;"> </span>
<br />
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<u><span style="font-family: Georgia; font-size: 13.5pt;">Are
Capital Gains Rates Necessary?</span></u><span style="font-family: Georgia; font-size: 13.5pt;"><br />
</span><span style="font-family: Georgia; font-size: 12pt;"><br /> </span><br />
<span style="font-family: Georgia; font-size: 12pt;">There are several valid arguments for limiting tax on capital gains. Likewise,
there are good arguments for never imposing any tax on anything. But if we are
to have a workable society with a government that can afford to provide the
security, infrastructure, and enforceable ground rules needed for a healthy
economy and a good life, we need to tax something. The question is which
balance of taxes is least harmful overall.<br />
<br />
The primary arguments for limiting taxes on capital gains are<br />
<br />
1) Capital gains may not be real gains: they may simply be a product of
inflation. (Given the overall structure of our tax system, though, this is a
bit of a childish whine. If someone makes an investment that pays current
interest or dividends, most or all of that income is just making up for
inflation, but all of it is taxed nonetheless, and the taxpayer pays the tax currently.
If someone instead invests in such a way that the income accumulates as a
capital gain, the taxpayer at least gets to defer the tax bite until the
capital gain is realized, so the taxpayer has already come out ahead.
Proponents of the inflationary gains argument are in effect saying that this
deferral advantage is not enough, that they also need to get special protection
from tax on the part of the income that corresponds to inflation. Why? They are
not contributing any more to the economy than the person who invests and takes
interest or dividends. Further, special capital gains rates are a very poor
instrument for trying to account for inflation. Most stock investments grow in
value at a rate well above inflation. So, Shared Economic Growth has the right
solution. Induce corporations to pay out their earnings as dividends currently,
and then the type of long term investors who care about inflation will pay tax
on their income year by year just like everybody else. They won't have any
right to complain.)<br />
2) If capital gains taxes are high, asset owners may be reluctant to sell their
assets and trigger the tax. Therefore, they hold onto the investment, resulting
in an inefficient allocation of capital that reduces growth.<br />
3) If returns on capital investments are reduced by high taxes, the owners of
available capital will be less willing to invest it rather than spend it on
consumption, again reducing economic efficiency.<br />
<br />
On the other hand, the downsides of low capital gains tax rates are significant,
including<br />
<br />
1) They cause income from passive investment to be taxed less heavily than
income from productive labor, diverting intellectual talent into investing
activities that are largely parasitic rather than into activities that create
new, real value.</span></div>
<span style="color: black; font-family: Georgia; font-size: 12pt;">2) Ownership of capital is by definition skewed
towards people who are already wealthy, so low capital gains rates cause the
wealthy to be taxed less heavily than the working middle class, undermining our
</span><span style="color: black; font-family: Cambria; font-size: 11pt;"><a href="http://www.sharedeconomicgrowth.org/enforcingprogressivity.html"><span style="color: black; font-family: Georgia; font-size: 12pt; text-decoration: none;">progressive tax system</span></a></span><span style="color: black; font-family: Georgia; font-size: 12pt;">.<br />
3) Low capital gains rates can actually lock in inefficient investments and
create other inefficiencies by providing incentives to structure income as
artificial capital appreciation rather than just taking the income currently.<br />
4) Given a choice between working the family farm or small business and being
taxed at ordinary rates on the income or selling it and paying tax at the lower
capital gains rates, there is a strong incentive to sell out, undermining the
base of small farmers and entrepreneurs that balance our economy and invest for
the long term. It is good to encourage the free flow of capital, but there is a
difference between that and having a system that puts a premium on getting a short
term value spike and turning a quick profit at the expense of long term
profitability.<br />
<br />
The Shared Economic Growth proposal offers a way to get most of the benefits of
low capital gains rates without the burdens:<br />
<br />
1) Inflationary gains on stock would become less relevant because earnings
would be paid out and taxed on a current basis.<br />
2) Corporations would be pressured to pay out their earnings back into the
economy, preventing cash from getting locked into a corporation where it is
only available to go to the best investment available to that company rather than the best
investment available in the economy,
thus increasing efficiency without distorting the tax system or undermining
progressivity.<br />
3) By eliminating double taxation of corporate equity (once at the corporate
level and then again at the shareholder level), Shared Economic Growth would
make capital investments much more attractive and would give corporations many
investment opportunities that are </span><span style="color: black; font-family: Cambria; font-size: 11pt;"><a href="http://www.sharedeconomicgrowth.org/middleclassmarketpower.html"><span style="color: black; font-family: Georgia; font-size: 12pt; text-decoration: none;">not economical</span></a></span><span style="color: black; font-family: Georgia; font-size: 12pt;"> for them today.<br />
4) By eliminating the tax penalty for </span><span style="color: black; font-family: Cambria; font-size: 11pt;"><a href="http://www.sharedeconomicgrowth.org/americanjobs.html"><span style="color: black; font-family: Georgia; font-size: 12pt; text-decoration: none;">U.S. investments and jobs</span></a></span><span style="color: black; font-family: Georgia; font-size: 12pt;">, Shared Economic Growth would make much more
capital available for investments in the United States, greatly stimulating the
growth of our economy.<br />
<br />
Shared Economic Growth would accomplish all of this while improving the
progressivity of our tax system, eliminating incentives to spend effort on
siphoning off value rather than creating value, and providing incentives to
keep the family farm or business rather than selling out.<br />
<br />
Isn't that a better way to do it?</span><span style="font-family: Georgia; font-size: 12pt;"> </span>
SharedGrowthhttp://www.blogger.com/profile/14044657568079494971noreply@blogger.com0tag:blogger.com,1999:blog-5805195981484952288.post-68350174814547509682013-03-09T14:48:00.001-08:002013-03-09T14:48:41.227-08:00Shared Economic Growth: Wealthy Financial Speculators Should Not Pay Lower Rates Than Working Professionals
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<u><span style="font-family: Georgia; font-size: 13.5pt;">Enforcing
Our Progressive System<br />
</span></u><span style="font-family: Georgia; font-size: 12pt;"><br />
In taxation, as in many things, the way the system is <i>supposed</i> to work
is not the same as the way it actually <i>does</i> work. We are supposed to
have a progressive tax system, in which people who earn more income pay tax at
higher rates than those who earn less. In practice, many people with high
incomes pay much less than you would think, which means that the working middle
class pays too much.<br />
<br />
The idea behind the progressive tax system is that the burden of providing
government services should be distributed based upon the ability to pay and the
relative financial benefit that people receive from being able to do business
in the stable environment that our government supports. The ability-to-pay
concept is a notion of economic efficiency: If the government needs $1,000 and
can take it either from someone who earns $20,000 per year or someone who earns
$200,000 per year, the population is better off if the government takes the
$1,000 from the person who earns $200,000 because she will (on average) suffer
less pain from the loss. In other words, society is better off overall if the
government collects relatively more from higher-income individuals than from
lower-income individuals.<br />
<br />
Relative social benefit is a notion of fairness. If you took two babies born in
a poor nation, such as Chad, and auctioned off the right for one of them to
grow up in America, the child who was destined to become Bill Gates would
presumable be willing to pay more than the child who was destined to become a
Wal-Mart cashier. The latter child certainly is still much better off in
America than in Chad, on average, but the child destined to become Bill Gates
would be better off to the tune of $30 billion. The progressive tax system runs
that auction retroactively, effectively saying, "Bill, this country has
been very, very good to you, so we're going to ask that you give a little extra
in return." This concept does not mean that talented, hard-working people
should be prevented from earning and keeping a lot of money. It just means that
efficiency and fairness both dictate that those wealthiest individuals should
pay a relatively larger share of the cost of running our society - the society
in which they have prospered and have been able to use their talents.<br />
<br />
Parts of our tax system are not progressive at all. All workers pay 7.65% of
their wage income in employment taxes - in fact, double that amount if you take
the view (as most economists do) that the employer's share is passed through to
the employee as lower wages. However, 6.2% out of that 7.65% does not apply to
wages above $97,500. As a result, people earning more than $97,500 in salary
actually pay employment taxes at a relatively lower rate than people who earn
less than that. Furthermore, people who receive their income from sources other
than wages do not suffer any employment tax <span style="color: black;">on that
income.<br />
<br />
Similarly, sales taxes are not progressive. Given that everyone in a particular
town generally pays sales tax at the same rate and that people with very high
incomes generally do not ever spend all of their money, higher-income
individuals may pay relatively less sales tax. Because of this effect, a family
earning $40,000 a year will spend about 10% of its income on state and local
taxes (state income, sales, property, gasoline excise, etc.), while a family
earning over $100,000 a year will pay a little over 7%. Families earning more
than that pay a progressively smaller percentage.<br />
<br />
Nevertheless, the progressive income tax part of the system operates, for the
most part, in the way that you would expect. In 2005, looking at adjusted gross
income (that is, income before personal exemptions and itemized deductions),
families earning $20,000 paid federal income tax at an average rate of 5%,
families earning $40,000 paid it at an 8% rate, families earning $100,000 paid
13%, and those earning $200,000 paid 20%. At that point, however, the
progressivity curve starts to flatten out. The rate of tax on families who
earned over $500,000 in 2005 hit 24%, a relatively small increase over the $200,000
group, and the rate of tax <i>dropped </i>to 23.5% for those earning over
$5,000,000 and to 21% for those earning over $10,000,000.<br />
<br />
Why are top rates so low? In large part, it is due to the special low rates
that apply to </span></span><span style="color: black;"><span><u><span style="font-family: Georgia; font-size: 12pt;">capital gains</span></u></span></span><span style="color: black; font-family: Georgia; font-size: 12pt;"> and dividends. Families
earning less than $50,000 a year derived about 1% of their income from those
sources in 2003 (and another 11% of their average income from pensions and
IRAs, for which these favorable rates provided no extra benefit), while families
earning over $1,000,000 obtained 35% of their income from those sources.
Recently we've learned how the "carried interests" trick allows wealthy
</span><span style="color: black;"><span><u><span style="font-family: Georgia; font-size: 12pt;">hedge fund managers</span></u></span></span><span style="color: black; font-family: Georgia; font-size: 12pt;"> to pay tax on their income
at a rate of only 15% - a far lower rate than what their secretaries pay.
That's just the latest in a long line of devices by which people manage to pay
less tax than you might think. <br />
<br />
So, a family earning $40,000 a year pays, on average, 7.65% (or 15.3%,
depending on how you look at it) employment tax, 8% federal income tax, and
about 10% state and local income tax when they spend their money, for a total
of about 25.65% (or 33.3% if you take the view that an employer passes its
portion of the employment taxes on to its employees). A family earning
$4,000,000 a year, or 100 times as much, pays employment tax of about 0.62%,
state and local tax of perhaps 6%, and federal income tax of 24%, for a total
of some 30.62%. That may or may not be progressive at all, depending again on
how one views the employer portion of the employment taxes. At best, it's
certainly not <i>very</i> progressive.<br />
<br />
The Shared Economic Growth proposal would get rid of the special favorable
rates for capital gains and dividends, shutting down a string of schemes such
as carried interest taxation and causing all income to be subject to the same
progressive rate structure. It would also impose a small supplemental tax of
7.5% (not much more than the 6.2% portion of employment tax that does not apply
to income over $97,500) on income over $500,000. That would make our system
about as progressive in reality as the rate tables make it look on the surface.</span></div>
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<u><span style="font-family: Georgia; font-size: 13.5pt;">Progressivity
and Growth</span></u><span style="font-family: Georgia; font-size: 12pt;"><br />
<br />
Data spanning the full history of the American income tax shows that
progressive tax rates are not inconsistent with healthy growth. To the
contrary, sharing the rewards of work a bit more broadly appears to help
growth. As the chart above shows, overall growth was strong while top marginal
rates were high. As the chart below shows, income growth for the top 1% is not
linked to income growth for the bottom 99%. Enforcing progressivity, if done in
the context of providing fair opportunity to the 99% rather than providing
handouts, seems to promote growth.<br />
<br />
Wouldn't society's overall happiness be maximized if families earning $40,000 a
year were taxed at a lower rate than families earning 100 times that much? If
we give more working Americans a chance to earn healthy after-tax income for
their efforts, wouldn't that be the best way to give everyone a real incentive
to work hard and contribute to society? Wouldn't it be more fair if, for the
benefit of living in the American economy, a two-earner family earning $40,000
paid a lower percentage of their income than a family earning 100 times that
much? The Shared Economic Growth proposal would make progressive taxation a
reality.<br />
<br />
Wouldn't that be better?</span></div>
<br />SharedGrowthhttp://www.blogger.com/profile/14044657568079494971noreply@blogger.com0tag:blogger.com,1999:blog-5805195981484952288.post-19206407039339720262013-03-09T14:27:00.002-08:002013-03-09T14:27:34.502-08:00Shared Economic Growth: Making America the Most Attractive Place to Locate Desirable Jobs
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<u><span style="font-family: Georgia; font-size: 13.5pt;">The
Government Should Not Pay Companies To Export Good Jobs</span></u><span style="font-family: Georgia; font-size: 13.5pt;"><br />
</span><span style="font-family: Georgia; font-size: 12pt;"><br />
We all know that globalization is hurting a broad group of American workers.
Given a choice between paying U.S. level wages or paying workers in a
developing country $1.00 an hour, companies will tend to choose the latter.
Even if a company would prefer to hire American workers, they are competing
against other companies that will use the cheap foreign labor, and eventually
it must fall in line or fail. In industries that rely heavily on manual labor,
this trend cannot realistically be reversed. America cannot and should not try
to compete for low wage, low skill, low value jobs. Trying to do so would end
up causing us to sacrifice standards that are important to our society, such as
the minimum wage. Instead, we must seek to obtain the promised upside of
globalization, good new jobs in higher value industries that can afford to pay
U.S. wages.<br />
<br />
Those industries are tax sensitive. They earn high profit margins relative to
the cost of manufacture, and so tax is a major consideration in where they
locate their activities. Does the U.S. tax system attract those activities
here? No, exactly the opposite! For a given operation that earns $100 of profit
before tax, the corporation will keep only $65 if the operation is located in
the U.S., but it may keep the full $100 if it is moved abroad. That is a 54%
increase in profit just by moving the operation and jobs out of the United
States. This is insane. The U.S. could afford such a system back when we were
far ahead of everybody else, with greatly superior technology, an elite
workforce, and relatively great wealth. But we can't afford it now. We are now
a debtor nation. We have lost much of our technical lead and are fading fast,
and we are no longer able to retain these jobs in the face of foreign
competition when corporations are punished for operating here.<br />
</span><span style="font-family: Georgia;"><br />
</span><span style="font-family: "Times New Roman"; font-size: 12pt;">Imagine that you
represent a German corporation that wants to build a factory to supply the U.S.
market with a particular product. You are deciding whether to locate the plant
in the U.S. or in the Dominican Republic (“D.R.”). What are the
trade-offs?<br />
<br />
U.S. –<br />
· Wages will be relatively high.<br />
· A big chunk -- 35% -- of your net profit would be taken away by U.S. federal
tax (plus a percentage for state income taxes, too).<br />
· Sales taxes on the equipment and raw materials you purchase will be
high.<br />
<br />
D.R. –<br />
· Wages will be about $1 an hour. </span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman"; font-size: 12pt;">None
of your profit will go to income tax.<br />
· Like most countries, it has a value-added tax (“VAT”) rather than a sales
tax, and businesses don’t bear any cost from the VAT charged on equipment or
raw materials.<br />
<br />
Which jurisdiction would you choose? Absent especially high shipping costs, the
financial answer is clear. The fact that the U.S. retains as many plants as it
does is a testament to the fact that U.S. corporations, on the whole, have a
substantial degree of loyalty to their home country.<br />
<br />
Now say you are a U.S. corporation trying to compete against a German-owned
rival. Your plant is in the U.S. The German company’s plant is in the D.R. All
else equal, will you be able to compete? Even if you can, suppose the German
rival looks at your business and says, “If I buy them, I can move the
production to the D.R. and save on labor costs, plus instantly increase the
after-tax profit by more than half due to the elimination of the income tax.”
Do you think the U.S. company will resist being acquired and having both its
U.S. headquarters and its U.S. factory eliminated?<br />
<br />
These examples show why the U.S. has maintained a policy that permits the
international operations of U.S. companies to be somewhat competitive with
their foreign rivals. If a U.S. company puts overseas operations into a foreign
subsidiary, the income from those operations won’t be taxed by the U.S. until
it is brought home as a dividend. So, rather than being acquired by the German
rival and having its U.S. headquarters eliminated, the U.S. corporation can
move its own plant to a D.R. subsidiary and avoid current tax on the
profits.<br />
<br />
However, the U.S. corporation is still not fully competitive with the German
rival, because it still must pay U.S. tax on its profits sooner or later.
Further, the U.S. corporation is discouraged from reinvesting its profits in
the U.S. economy, because it will lose more than one-third of that profit to
tax as soon as the cash hits the U.S. Likewise, when the U.S. corporation is
considering how best to expand, it sees that an investment of $100 in foreign
operations will have the same net earnings cost as an investment of $65 in the
U.S., because the foreign cash is pre-tax dollars while the U.S. cash is
after-tax dollars. (In other words, spending $65 in the U.S. requires the
corporation to bring home $100 and lose $35 to tax.)<br />
<br />
Because of these limitations, some commentators have advocated moving the U.S.
to a territorial tax system, which is what most of our competitor nations use.
Under a territorial system, income earned outside of an enterprise’s home
country is exempt from tax, and earnings can be freely repatriated for
investment in the home country. However, such a system still makes it
financially difficult for a U.S. corporation to decide to locate its plant in
the U.S. rather than in the D.R. Wage rates aside, the D.R. plant will be over
50% more profitable than the U.S. plant. It is tough to ignore that
difference.<br />
<br />
Further, enacting a territorial tax system in the U.S. still would not
encourage that German rival to locate its plant here. The German firm would
also realize that a plant in the D.R. would be over 50% more profitable than a
U.S. facility. Since the company would have no loyalty to the U.S., it is clear
where it would choose to build the plant. Under the Shared Economic Growth
proposal, the corporate-level tax on U.S. operations would be reduced to zero.
Under that system, there would be no tax penalty to either the corporation or
its shareholders for building a plant in the U.S. rather than in the D.R. In
fact, if the D.R. imposed any income tax at all, then there would be an
incentive to build a U.S. plant instead.<br />
<br />
Doesn’t that make more sense?</span></div>
SharedGrowthhttp://www.blogger.com/profile/14044657568079494971noreply@blogger.com0tag:blogger.com,1999:blog-5805195981484952288.post-15562029856219551542013-03-09T14:05:00.000-08:002013-03-09T19:05:09.711-08:00Shared Economic Growth: Helping the Market to Restore Our Strong Middle Class<style>@font-face {
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<b><u><span style="font-family: Georgia; font-size: 12pt;">How Shared Economic Growth
Builds Middle Class Market Power</span></u></b><b><span style="font-family: Georgia; font-size: 12pt;"> </span></b><span style="font-family: Georgia; font-size: 12pt;"></span></div>
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<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 0.0001pt -0.5pt;">
<span style="font-family: Georgia; font-size: 12pt;">The global economy, or more
specifically mobile investment, is hurting a broad group of working Americans.
Given a choice between paying U.S. level wages or paying workers in an emerging
country significantly less, companies will tend to choose the
latter. It doesn’t have to be like this. It is possible
to change the competitive equation that drives corporate investment decisions
so that jobs are attracted to the U.S. again.<br />
<br />
First, consider how the market is operating now. If working Americans organized
and got higher wages, sooner or later the corporation will be motivated to just
shut down the U.S. plant and move the operations to a lower wage (and generally
lower tax) environment. Like it or not, most companies will not pay their
workers more just to be nice. Even if a company would prefer to hire American
workers, they are competing against other companies that will use the cheap
foreign labor, and eventually it must fall in line or fail. In fact, any
corporation that didn't seek to reduce costs and increase profits would usually
lose out to its competitors and would be acquired or go bankrupt. To remain
viable, corporations must minimize their overall costs.<br />
<br />
In industries that rely heavily on manual labor, this trend of moving to the
lower wage locations cannot realistically be reversed. America cannot and
should not try to compete for low wage, low skill jobs typically associated
with low profit margins. Instead, we must seek to obtain the promised upside of
globalization, good new jobs in higher margin businesses that can pay wages
sufficient to maintain the living standards of an advanced
economy. But those industries are tax sensitive. They earn high
profit margins relative to the cost of manufacture, and so tax is a major consideration
in where they locate their activities. Does the U.S. tax system attract those
activities here? No, exactly the opposite! The U.S. could afford such a system
back when we were far ahead of everybody else, with greatly superior
technology, an elite workforce, and relatively great wealth. But we can't
afford it now. <span style="color: black;">The world has changed and
we are no longer able to retain these jobs in the face of foreign
comptetion.<br />
</span><br />
To understand the impact of mobility on jobs and wages under our current tax
system and the power of the Shared Economic Growth proposal to correct it,
let’s consider an example with some simple math. For most corporations,
deciding where to put their operations is a matter of arithmetic. To choose
between two countries, they consider the cost of manufacturing (or providing
service or performing research) in the one versus the other, considering the
cost and availability of adequate labor, raw materials, shipping costs, energy,
etc. That allows them to compute their profit before tax for each of the
competing jurisdictions. They then layer in tax. Whichever jurisdiction yields
the highest after-tax profit wins. </span></div>
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<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 0.0001pt -0.5pt;">
<span style="font-family: Georgia; font-size: 12pt;">So, say the choice is between a Chinese
factory and an American one, and that the company would have to pay 25% tax in
China (the full statutory rate) and 35% in the U.S. Say it sells bowling
balls for $20 in the U.S., and that it would cost $8 to make them in China and
ship them here, but $10 to make them in the U.S. The cost of labor associated
with making each bowling ball is $5 in China and $7 in the U.S., but
all other costs are the same, $3. What's the math? Under current law
the decision is obvious. If they choose China, they make $12 per ball ($20
sales price less $8 cost), pay tax of 25% on that or $3, and clear 12-3=
$9. If they choose the U.S., they make $10 per ball ($20 sales price less
$10 cost), pay tax of 35% on that or $3.50, and clear $10-3.50=$6.50. Obviously
theymake the bowling balls in China, and China gets the jobs.<br />
<br />
If U.S. workers accepted a pay-cut to secure the jobs, how much of a pay-cut
would they have to accept to attract the investment to the U.S. instead of
China? Answer: U.S. workers would have to accept a pay-cut greater
than 55% or about $3.85 per ball to secure the jobs. Again, let’s look
at the numbers. Assuming a $20 sales price less U.S. wages of $3.15 and $3
for other costs, an investor in the U.S. would make $13.85 before
taxes. Then, the investor would pay U.S. tax at 35% on the $13.85 or
$4.85, and clear $9, the same as in China. Because of our current tax
system, the pay-cut required to attract the jobs to the U.S., at least $3.85
($7-$3.15), is nearly double the $2 wage differential between the U.S. and
China.</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
<div class="MsoNormal" style="margin: 0in 0in 0.0001pt -0.5pt;">
<br /></div>
<table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; width: 402px;">
<tbody>
<tr style="height: 13.5pt;">
<td style="border: 1pt solid windowtext; height: 13.5pt; padding: 0in; width: 151pt;" width="151"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 13.5pt; padding: 0in; width: 8pt;" width="8"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border: 1pt solid windowtext; height: 13.5pt; padding: 0in; width: 59pt;" width="59"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: Arial; font-size: 10pt;">
China</span></b><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 13.5pt; padding: 0in; width: 7pt;" width="7"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td colspan="5" style="border-color: windowtext black windowtext windowtext; border-style: solid; border-width: 1pt; height: 13.5pt; padding: 0in; width: 177pt;" width="177"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: Arial; font-size: 10pt;">
U.S.</span></b><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
</tr>
<tr style="height: 12.75pt;">
<td style="border-color: -moz-use-text-color windowtext; border-style: none solid; border-width: medium 1pt; height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: Arial; font-size: 10pt;">Description</span></b><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-color: -moz-use-text-color windowtext; border-style: none solid; border-width: medium 1pt; height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-color: -moz-use-text-color windowtext; border-style: none solid; border-width: medium 1pt; height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: Arial; font-size: 10pt;">Without</span></b><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-color: -moz-use-text-color windowtext; border-style: none solid; border-width: medium 1pt; height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: Arial; font-size: 10pt;">With </span></b><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-color: -moz-use-text-color windowtext; border-style: none solid; border-width: medium 1pt; height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: Arial; font-size: 10pt;">%</span></b><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
</tr>
<tr style="height: 13.5pt;">
<td style="border-color: -moz-use-text-color windowtext windowtext; border-style: none solid solid; border-width: medium 1pt 1pt; height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-color: -moz-use-text-color windowtext windowtext; border-style: none solid solid; border-width: medium 1pt 1pt; height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-color: -moz-use-text-color windowtext windowtext; border-style: none solid solid; border-width: medium 1pt 1pt; height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: Arial; font-size: 10pt;">Paycut</span></b><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-color: -moz-use-text-color windowtext windowtext; border-style: none solid solid; border-width: medium 1pt 1pt; height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: Arial; font-size: 10pt;">Paycut</span></b><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-color: -moz-use-text-color windowtext windowtext; border-style: none solid solid; border-width: medium 1pt 1pt; height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: Arial; font-size: 10pt;">Change</span></b><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
</tr>
<tr style="height: 12.75pt;">
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">Unit Sale Price</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: Arial; font-size: 10pt;">$20.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: Arial; font-size: 10pt;">$20.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: Arial; font-size: 10pt;">$20.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
</tr>
<tr style="height: 12.75pt;">
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">Less: Unit Labor Cost</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: Arial; font-size: 10pt;">-$5.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: Arial; font-size: 10pt;">-$7.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: Arial; font-size: 10pt;">-$3.15</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: Arial; font-size: 10pt;">-55%</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
</tr>
<tr style="height: 12.75pt;">
<td style="border-color: -moz-use-text-color -moz-use-text-color windowtext; border-style: none none solid; border-width: medium medium 1pt; height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">Less: Unit Other Cost</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-color: -moz-use-text-color -moz-use-text-color windowtext; border-style: none none solid; border-width: medium medium 1pt; height: 12.75pt; padding: 0in;"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: Arial; font-size: 10pt;">-$3.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-color: -moz-use-text-color -moz-use-text-color windowtext; border-style: none none solid; border-width: medium medium 1pt; height: 12.75pt; padding: 0in;"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: Arial; font-size: 10pt;">-$3.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-color: -moz-use-text-color -moz-use-text-color windowtext; border-style: none none solid; border-width: medium medium 1pt; height: 12.75pt; padding: 0in;"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: Arial; font-size: 10pt;">-$3.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
</tr>
<tr style="height: 12.75pt;">
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">Pre-tax Profit per Unit</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: Arial; font-size: 10pt;">$12.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: Arial; font-size: 10pt;">$10.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: Arial; font-size: 10pt;">$13.85</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
</tr>
<tr style="height: 12.75pt;">
<td style="border-color: -moz-use-text-color -moz-use-text-color windowtext; border-style: none none solid; border-width: medium medium 1pt; height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">Less:Corporate Income Tax</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-color: -moz-use-text-color -moz-use-text-color windowtext; border-style: none none solid; border-width: medium medium 1pt; height: 12.75pt; padding: 0in;"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: Arial; font-size: 10pt;">-$3.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-color: -moz-use-text-color -moz-use-text-color windowtext; border-style: none none solid; border-width: medium medium 1pt; height: 12.75pt; padding: 0in;"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: Arial; font-size: 10pt;">-$3.50</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-color: -moz-use-text-color -moz-use-text-color windowtext; border-style: none none solid; border-width: medium medium 1pt; height: 12.75pt; padding: 0in;"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: Arial; font-size: 10pt;">-$4.85</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 12.75pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
</tr>
<tr style="height: 13.5pt;">
<td style="height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">After Tax Profit per Unit</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-color: -moz-use-text-color -moz-use-text-color windowtext; border-style: none none double; border-width: medium medium 2.25pt; height: 13.5pt; padding: 0in;"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: Arial; font-size: 10pt;">$9.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-color: -moz-use-text-color -moz-use-text-color windowtext; border-style: none none double; border-width: medium medium 2.25pt; height: 13.5pt; padding: 0in;"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: Arial; font-size: 10pt;">$6.50</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-color: -moz-use-text-color -moz-use-text-color windowtext; border-style: none none double; border-width: medium medium 2.25pt; height: 13.5pt; padding: 0in;"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: Arial; font-size: 10pt;">$9.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
</tr>
<tr style="height: 13.5pt;">
<td style="height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="height: 13.5pt; padding: 0in;"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
</tr>
</tbody></table>
<div class="MsoNormal" style="margin: 0in 0in 0.0001pt -0.5pt;">
<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 0.0001pt -0.5pt;">
<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 0.0001pt -0.5pt;">
<span style="font-family: "Times New Roman"; font-size: 12pt;">Sometimes working
Americans are openly offered pay and/or benefit cuts to remain
employed. Sometimes jobs simply disappear and the displaced workers,
particularly in the manufacturing sector, must accept significant pay and
benefit cuts at new jobs. And sometimes the jobs are never created here in
the first place. Whatever the case, the fact is that pay and benefits in
the U.S. are limited because investment is mobile and it is moving to lower
wage and lower tax locations abroad. Less U.S. investment (whether from
domestic sources or from abroad) means that there are simply fewer good jobs
around, leaving many working Americans with limited market power to negotiate
better wages.<br />
<br />
The impact of this trend is not limited to unskilled or semi-skilled workers in
the manufacturing sector either. As emerging countries develop highly
skilled labor and adopt technology, the same scenario is playing out for
highly- skilled workers in the U.S. Ultimately, this process affects all
working Americans, eventhose whose jobs are not mobile including skilled
service providers such as doctors, electricians, lawyers, plumbers and so on
because the displaced labor eventually creates an oversupply of candidates for
those jobs.<br />
<br />
In a global economy where capital <b>investment is highly mobile but
workers are not</b>, domestic workers are bearing a greater proportion of the
corporate income tax burden in the form of limited job opportunities and
reduced wages. In fact, recent estimates suggest that approximately 70% of the
corporate income tax actually falls on domestic workers. Through the
corporation, shareholders can effectively escape the corporate income tax
burden by simply allocating or reallocating their investment to lower cost
locations abroad. Additional corporate profits derived from investing in
lower cost countries flow to shareholders, many of whom do not have to compete
with foreign labor (including semi-skilled factory workers and increasing
numbers of skilled graduates from top universities in India or China) for
jobs. By encouraging foreign investment over U.S. investment, the
corporate income tax is effectively exporting good jobs and subsidizing foreign
workers at the expense of working Americans. This is why the great majority of
Americans who rely upon wages rather than capital as their primary source of
income have experienced income stagnation and have failed to benefit from the
growth in the U.S. economy over the past three decades. The corporate
income tax has become a ball and chain secured to the ankle of every working
American. This is the last thing working Americans need as they confront
fierce global competition from low wage countries abroad.<br />
<br />
The solution is simple: <b>If it moves, don’t tax it!</b> Let’s go
back to the example above and see what happens if we implement Shared Economic
Growth so that U.S. corporate tax effectively drops to zero. The company still
would make $12 pretax in China versus $10 in the U.S., but now look at the
after tax results. If they go to China they still clear $9, but if they make
the balls in the U.S. they clear <b>$10.</b> Obviously they now make
the bowling balls in the U.S., and the U.S. gets the jobs. It is worth $1
per ball for it to do so. Now the company needs to hire workers for the
factory. But the U.S. has a high rate of employment - we have lots of jobs,
they just aren't the same kind of relatively high paying jobs that we used to
have. So, the factory will have to lure employees away from another company by
offering higher pay, better benefits or better conditions. It will thus bid up
wages by up to 99 cents per ball or about 14% if it needs to in order to get
the necessary workers. Suddenly, instead of trying to hold on to their jobs in
the face of competition from low wage foreign competition, working Americans
would be in a position to make competing employers bid for their services. In
many cases, there would be substantial room for wage growth. </span><span style="font-family: Arial; font-size: 10pt;"></span></div>
<div class="MsoNormal" style="margin: 0in 0in 0.0001pt -0.5pt;">
<br /></div>
<table border="1" cellpadding="0" cellspacing="0" class="MsoTableGrid" style="border-collapse: collapse; border: medium none; margin-left: -0.5pt;">
<tbody>
<tr>
<td style="border: 1pt none; padding: 0in 5.4pt; width: 141.5pt;" valign="top" width="142"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: 1pt 1pt 1pt medium; padding: 0in 5.4pt; width: 133pt;" valign="top" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: Arial; font-size: 10pt;">
U.S. </span></b><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: 1pt 1pt 1pt medium; padding: 0in 5.4pt; width: 130pt;" valign="top" width="130"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: Arial; font-size: 10pt;">
China</span></b><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
</tr>
<tr>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 141.5pt;" valign="top" width="142"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: Arial; font-size: 10pt;">Description</span></b><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 133pt;" valign="top" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: Arial; font-size: 10pt;">SEG</span></b><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 130pt;" valign="top" width="130"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: Arial; font-size: 10pt;">
25%</span></b><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
</tr>
<tr>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 141.5pt;" valign="top" width="142"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 133pt;" valign="top" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: Arial; font-size: 10pt;">No
Corporate Tax</span></b><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 130pt;" valign="top" width="130"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: Arial; font-size: 10pt;"> Corporate
Tax Rate</span></b><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
</tr>
<tr>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 141.5pt;" valign="top" width="142"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">Unit Sale Price</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 133pt;" valign="top" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">$20.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 130pt;" valign="top" width="130"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">$20.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
</tr>
<tr>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 141.5pt;" valign="top" width="142"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">Less: Unit Labor Cost</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 133pt;" valign="top" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">-$7.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 130pt;" valign="top" width="130"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">-$5.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
</tr>
<tr>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 141.5pt;" valign="top" width="142"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">Less: Unit Other Cost</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 133pt;" valign="top" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">-$3.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 130pt;" valign="top" width="130"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">-$3.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
</tr>
<tr>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 141.5pt;" valign="top" width="142"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">Pre-tax Profit per Unit</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 133pt;" valign="top" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">$10.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 130pt;" valign="top" width="130"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">$12.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
</tr>
<tr>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 141.5pt;" valign="top" width="142"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">Less: Corporate Income Tax</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 133pt;" valign="top" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">$0.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 130pt;" valign="top" width="130"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">-$3.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
</tr>
<tr>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 141.5pt;" valign="top" width="142"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">After Tax Profit per Unit</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 133pt;" valign="top" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">$10.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
<td style="border-color: -moz-use-text-color; border-style: none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 130pt;" valign="top" width="130"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: Arial; font-size: 10pt;">$9.00</span><span style="font-family: "Times New Roman"; font-size: 12pt;"></span></div>
</td>
</tr>
</tbody></table>
<div class="MsoNormal" style="margin: 0in 0in 0.0001pt -0.5pt;">
<span style="font-family: "Times New Roman"; font-size: 12pt;"> </span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Georgia;">Because U.S. (and
foreign) companies have had dramatic increases in productivity over the last 30
years, the labor cost per unit of product produced has fallen
greatly. If the labor cost associated with producing a given product
is relatively small as compared to other costs, working Americans will be able
to demand a greater percentage increase in their wages and still attract the
investment for a plant here rather than in China. Assuming the labor
costs in our example were reduced by $3 and other costs were increased by $3,
yielding the same profit for the company under Shared Economic Growth,
U.S. labor could demand a 25% increase in wages and still attract the
investment and jobs here rather than China.<br />
<br />
Of course, a single example cannot convey the fact that different kinds of
operations will come out differently. If a product has a high labor cost and a
low profit margin, it will still go to China. But products with a high margin -
usually innovative, high tech products - will come to the U.S. The
role of tax in the analysis is magnified for such products. The point is that
for years we have been told that globalization would make life better for
everyone by creating more low skill jobs in developing countries while creating
more high skill jobs in the U.S. But we haven't seen that play out, and the
reason is largely that our tax policy has interfered by pushing companies to
shift BOTH low margin, low skill operations (for cost reasons) AND high margin,
high skill operations (for tax reasons) to other countries. That has
caused globalization to result in a race to the bottom, where corporations
follow low wages and taxes but leave working Americans effectively
underemployed. We need to bring developing countries up, not have
them drag us down. <br />
<br />
We cannot change the fact that investment is mobile or the fact that most
Americans are competing for jobs with lower wage people all over the world.
Unless we adapt to these developments, the standard of living of the majority
of Americans will fall as investment and jobs continue to migrate to lower-cost
locations abroad. As individuals and as a nation, we will not have the
resources to address the problems of retirement and health care, nor will we be
able to provide our children with the very education and skills they need to
succeed in this new age. To adapt, we must change our tax system so
that the jobs that either move abroad or are suppressed because of low wages
abroad are replaced with better jobs in high-margin knowledge based activities
in the U.S.<br />
<br />
By effectively eliminating the corporate income tax, Shared Economic Growth
dramatically increases the attractiveness of the U.S. as a manufacturing and
services location, encourages economic growth and allows working Americans to
negotiate for a bigger piece of a growing pie. Globalization really could work
for everyone's benefit. Developing nations would continue to attract investment
and jobs and develop their own innovative industries but working Americans
would be able to compete for good jobs and pay as well. Shared
Economic Growth is about enabling working Americans to compete, not about
protecting working Americans from competition abroad. Working Americans can
compete and prosper if we just cut through the corporate income tax chain that
holds them down. </span><br />
<br />
<span style="font-family: Georgia;">Click for recent article on the <a href="http://finance.yahoo.com/news/middle-class-expenses-grow-faster-111900178.html;_ylt=AtQ26vo1Mh2SU2JsXK4CbXVHAIhG;_ylu=X3oDMTN0dWd0Z2dhBG1pdANTZWN0aW9uIExpc3QEcGtnAzAzODU0NTVjLWZmYmQtM2EzMi04NjlhLTZmMjEyZTAxYmE5NARwb3MDMQRzZWMDTWVkaWFTZWN0aW9uTGlzdAR2ZXIDNjEwODJjMDMtODViMC0xMWUyLWIyZWYtOTY1MWVlN2EzNzQ1;_ylg=X3oDMTJuZGU5aGlkBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDMzRhYmQ2MTUtZDUwNS0zNjQyLWJjNjItMmZjZTQ4ZmY3ZWE0BHBzdGNhdANuZXdzBHB0A3N0b3J5cGFnZQ--;_ylv=3#" target="_blank">middle class plight</a></span></div>
SharedGrowthhttp://www.blogger.com/profile/14044657568079494971noreply@blogger.com0