Monday, January 3, 2011

Do We Need More Taxes or Less?

Liberals say we need more and higher taxes to finance the government. Conservatives say we need fewer taxes to stimulate businesses which will then pay more taxes in the aggregate. Which is true? Let’s take a look at other countries to see how their tax rates effect business.

On 1 January, Canada cut their corporate tax rate to 16.5% from 18% compared to the United States federal rate of 35%. (If you add state corporate taxes to the federal levy, you come up with 40% of total income that United States companies must pay to the government in order to operate in this country.) As a result of these lower corporate tax rates, Canada has enjoyed a boom in investment, job creation, and growth since 1990 when their liberal government started cutting the taxes in order to attract investment to Canada. This is all because companies send capital where it can achieve the highest returns.

The United States ranks second highest in corporate taxes just behind Japan, which is still struggling to correct its economic downturn of the 1990’s.

The high taxes in America prevent hundreds of billions of dollars from coming to the United States in off-shore investments.

Who needs more taxation?!!

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