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Lowtax Network Hosted Blogs 

22 July 2007
Down With Corporation Tax!


The CATO Institute criticizes the US Treasury for failing to cut its high corporate tax rate, but the better question is why have corporate tax at all?

CATO quotes a recent survey by KPMG showing that the average corporate tax rate in the EU has fallen from 38% in 1996 to 24% in 2007, and that the process is continuing, there and elsewhere. Yet the US holds out with a 40% total corporate tax in most states.

As companies and their capital become more footloose during the unstoppable process of financial globalization, there is increasing pressure on countries to compete for the investment and jobs (and the income taxes) that companies bring with them. There seems to be no chance that countries will agree to hold the line at any given level, other than zero, given that many of them already have very low rates.

The lower that rates go (in some countries) the more companies based elsewhere will strain every nerve to take advantage of the lower rates, and the more absurd will seem the contortions that Treasuries go through to keep their precious revenues.

No-one calculates the cost of corporate tax collection, as far as I know, but it must be huge. The US Congress seems to spend much of its time railing against offshore, and inventing ever more restrictive laws to prevent companies from taking advantage of low tax rates on offer elsewhere. The US courts are full of corporate executives, accountants and lawyers on trial for 'abusive' tax sheltering. Across the world, legions of tax collectors battle to apply transfer pricing and CFC (Controlled Foreign Corporation) rules, with matching court structures. And there is the enormous interlocking spider's web of Double Tax Avoidance Treaties (partly aimed at personal investment, it is true) which has to be maintained and administered.

That's just on the regulatory side. In companies themselves, finance departments have tax minimization as one of their major preoccupations, and engage in an intricate dance with their auditors and the tax authorities which often ends up, again, in the courts.

In the EU, the prickly subject of State Aid is almost entirely driven by corporate tax concerns; Brussels and member states argue interminably over what is and isn't a legitimate tax break, and the European Court of Justice often has to pick up the pieces. Almost all governments world-wide set up and administer tax-privileged free-trade zones.

So the list goes on. With a universal zero rate of corporation tax the whole of this wasteful apparatus could be swept away, with a probable bonus to productivity of several percentage points.

You have been reading an entry on the following blog:

Jeremy Hetherington-Gore Unleashed
Jeremy tackles the difficult issues head on!
Contact: jeremyhetheringtongore@yahoo.com





More entries from this blog:

20 July 2008
'I Love Tax' - Anonymous Offshore Banker
It's been a great week for doomsters in the West, with markets collapsing and debt ballooning al ...

09 March 2008
Goodbye To Privacy
These last two weeks have seen the 'offshore' tax haven of Liechtenstein in the pillory for tryi ...

03 January 2008
Another Nail In The Currency Coffin
Two more countries join the mighty euro while the dollar slumps ever further into the shadows an ...

19 November 2007
Hands Off The Poor, Starving Tax Lawyers!
Congress and the Treasury are up in arms about the patenting of tax strategies. Why? What is wro ...

28 October 2007
The Death Of Corporation Tax
Last week saw the remarkable spectacle of a US Democrat proposing to reduce corporation tax by 5 ...

09 September 2007
Flat Tax, Not Flat Earth, Please!
Why is it that trade unions, especially European ones, seem to be stuck in a 19th century econom ...

02 September 2007
On-Line Gaming Banned In The UK
So the forces of darkness have won. With a fanfare, the UK government has brought into force its ...

21 August 2007
The Last Supply-Sider Felled
So the Tories, the UK's only hope of low taxes, have joined the governing socialists on a Colber ...

14 August 2007
King Canute Spotted On Brighton Beach
Well, it is August, after all, the month in which desperate journalists try to persuade men to b ...

11 August 2007
Private - Good; Public - Bad
It's good to see that privatization is continuing in the USA despite the best efforts of the Dem ...

28 July 2007
Don't Put Your Husband On The Board, Mrs Worthington
So the UK Treasury is going to ignore morality, equity and common-sense by legislating to punish ...

22 July 2007
Down With Corporation Tax!
The CATO Institute criticizes the US Treasury for failing to cut its high corporate tax rate, bu ...

15 July 2007
The Dinosaurs March In Europe
So the European Parliament, after agonized deliberations dominated by trade union champions in t ...

26 June 2007
Will The Treasury Get To Bert Smith Before The Grim Reaper?
Bert Smith lives in a house in Malta he built with the (mostly cash) proceeds of car-dealing in ...

08 June 2007
America Goes To War Against - wait for it - The Cayman Islands
Politics is rather like Alice in Wonderland: you chomp on a little pill called 'Power' and all a ...

06 June 2007
Down With The IMF!
The IMF has just wasted another slab of your money telling us what we already knew about Switzer ...

24 May 2007
Everyone Wants To Live Offshore
Research shows that out of 60 million UK residents, all but two (the Queen and Gordon Brown) wan ...

15 May 2007
Tax Harmonization Disharmony
Imagine your company does business across a union of some dozens of states each of which sets it ...

11 May 2007
The Sorry Tale Of Offshore Telecommunications
How sad to see yet another offshore territory getting telecommunications so hopelessly wrong, as Dig ...

 

Other Blog Entries:

20 July 2008
'I Love Tax' - Anonymous Offshore Banker

It's been a great week for doomsters in the West, with markets collapsing and debt ballooning al...

16 July 2008
Is there a trade-off between Freedom and Security?

Freedom is something most people regard as very close to their hearts. Living in “the West” or a...

11 July 2008
Return of Capital is More important than Return on Capital

I’ve said it before, but probably not here. Anyway, it can’t hurt to repeat this important mantr...

04 July 2008
Thoughts on Investing in Panama

Today I’m to writing to you from the beautiful city of Panama, Republic of Panama. I’m looking o...

27 June 2008
Why Offshore Banking Privacy is More Important than Ever

We’ve talked about creating wealth offshore. But today, I would just to like explain a little ab...

17 June 2008
You Really Can Physically Create Wealth Offshore: Part 2 of 2

In part 1 of this article, last week, I wrote about all the conditions favouring a move offshore...

11 June 2008
You Really Can Physically Create Wealth Offshore: Part 1 of 2

Recently, I wrote an article entitled “As Safe as Houses” for The Q Wealth Report. It’s really a...

03 June 2008
The Freedom to Create Real Value and Wealth in the Offshore World

This being my first entry on a new blog, I thought it would be a goo...

09 March 2008
Goodbye To Privacy

These last two weeks have seen the 'offshore' tax haven of Liechtenstein in the pillory for tryi...

20 February 2008
Panama Today, Tomorrow And Always

This Christmas season 2007 everyone is asking: What is happening in Panama? Every single hotel...

Popular Blogs:

Jeremy Hetherington-Gore Unleashed
Jeremy tackles the difficult issues head on!

Penelope Wise
Penny Wise but not Pound Foolish! But remember: I am not offering investment advice. My comments are just for your general information; I do not recommend investments, and you should take professional advice before entering any investment contract.

First Atlantic Commerce

Molina & Co

The Q Wealth Report
Peter Macfarlane of The Q Wealth Report blogs on Freedom, Wealth and Privacy


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E-mail blogs@lowtax.net to learn more.




 

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