|A Progressive’s Rendition of a Republican|
You know how you hear that the Democrats are the ‘Party of the Little Guy’? Republicans are ‘John Q. Monocle’ sporting a top hat and a pipe as they pay sub-minimum wage to children gluing ears to wooden ducks for 16 hours a day? You know how you hear that Republicans are big business fat cats responsible for all things evil in this universe?
Well, It’s horsepucky!
In reality, the Republicans, in theory, are supposed to be the party of the middle-guy while the Democrats are the party of the big shots, buying the votes of the little guys with funds from the public trough in hopes of staying in power.
Today, in a Major Policy Speech™ President Obama called for a lowering of the corporate tax from 35% to 28% with a 25% rate for manufacturing businesses.
Our friends over at the Weekly Standard observe:
The New York Times reports that President Obama is reviving an old proposal to lower the corporate tax rate from 35 percent to 28 percent (and 25 percent for manufacturers). Obama’s push to lower the corporate tax rate to 28 percent comes less than a year after he raised the top individual income tax rate, paid by many small businesses, to 39.6 percent.
Translation, the President is looking out for ‘big business’ at the expense of the small business person who files their taxes using the individual income tax code.
This puts corporations who file on the corporate schedule at a competitive advantage above and beyond economies of scale. Now you can say, “But Dr. J., what about Obamacare and the impositions it creates those who employ more than 49 individuals?” Well, that’s a great question, and Dr. J. hasn’t run the numbers, but Dr. J. suspects that the hardest hit will be the small businesses that can’t pare down to 49 employees. Corporations can always pay a fine if it is more cost effective than the group coverage available. Besides, 14% of total receipts is a big chunk of change. Even if group coverage eats 10% of overhead, the corporations are still 4% ahead.
Dr. J. knows this is all a publicity stunt. The President is doing his typical, “Go out of town and campaign with the people against Washington” routine. But this tax plan is a bad idea, not because lower taxes aren’t better, but because the plan is not comprehensive. It doesn’t go far enough, nor is it broad based enough. Lowering the corporate rate in a vacuum, without giving lip service to the tax code as a whole creates a new set of perverse incentives to replace the old perverse incentives.
Were Dr. J. in charge, and he isn’t, he would approach the tax code holistically, lowering and flattening rates, removing deductions that create distortions, and looking at the individual and corporate schedules as an integrated whole. That would level the playing field and make things truly fair (not progressive-fair™) for all.
Dr. J. can’t tell whether the President is clueless, disengenuous or a typical progressive. Probably all of the above!