3% tax increase. Remember, corporate tax rates are ONLY paid on profits, and not revenue. You have to be profitable to be taxed. Corporations pay salaries out of revenues, and not profits. Profits come after salaries.
Here is the thing. You can cut taxes all you want, but if there is no additional demand, you will not see additional employment. Take your business, for instance. Do you think lowering the taxes and not increasing clients will have a better chance of bringing in new employees, or will bringing in new clients who spend more dollars bring in more employees? You need to create demand for services, and thus, you need consumers to spend. That is why temporary government spending works much better than tax cuts.
Now, we would all love taxes to be non-existent. But keep in mind, that is not very possible. Reagan dropped the income taxes for corporations in the 1980s. He cut them from about 70% to about 35%. It did have an effect. Why? Well 70% was way too much, and it was such a cut that it did bring in business. But it also quadraupled the deficit. The American treasury cannot handle more deficit. You cut the corporate tax rate by 25% and the government will go bankrupt.
It is like a person who is virtually bankrupt asking for a $500,000 loan to make it big. The system just cannot handle it.
The responsible thing to do is:
- Eliminate the deficit
- Build surpluses
- Pay down the debt
- Then lower taxes.
But right now, too much of your tax dollars are being put toward interest on the debt. It is essentially burning your money. Once you eliminate the debt, then you can put that interest rate toward tax cuts.
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