Taxing economic growth away
Today the Wall Street Journal editorialized on America's uncompetitive position in the world due to our relatively high corporate tax rate. According to a new Organization for Economic Co-Operation and Development (OECD) study cited by the editors, America has the second-highest corporate tax rate among OECD countries.
In fact, America's combined state and federal corporate tax rate is now 50 percent higher than the average OECD country. How can American businesses compete in a global market when so heavily burdened by government?
The study, "Taxes and Growth," concluded that "corporate taxes are most harmful for growth, followed by personal income taxes, and then consumption taxes." Other studies also have labeled corporate taxes as the most volatile of any tax source.
Interestingly enough, the Big Government cohort in Nevada wants nothing more than to raise corporate tax rates in Nevada to shore up the state's deficit.
Making matters worse for the Big Government cabal is that the study suggests that "investment is adversely affected by corporate taxation." It makes little sense for a state whose economy is reeling backwards from the shock of the housing crash and the lackluster performance of our casinos, to tax the very businesses whose capital investments could pull our economy out from the wreckage and start putting people back to work.
As NPRI already has demonstrated, Nevada's revenue shortfall was not the result of an inadequate tax stream. Given that reality, we have to wonder what the goal of the Big Government crowd really is.
