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The Obama administration wants to tax “business.” Actually, the administration currently is pushing at least three significant business tax hikes. And that doesn’t count whatever might emerge from health care “reform.”
But Fortune’s Geoff Colvin helpfully reminds us that when you tax business you actually tax people. Which means all of us.
The White House therefore proposes charging all American companies full freight — the whole difference between their overseas taxes and the U.S. corporate rate — on all their profits as soon as they’re earned, no matter where. This measure, in their minds, would bring jobs home.
That’s Obama’s first proposed business tax increase. Another would require companies to account for their inventories on a first-in-first-out (FIFO) basis rather than a last-in-first-out (LIFO) one — an eye-glazing change that’s highly significant. In an era of rising costs, to assume that you’re selling your oldest inventory rather than your newest increases reported profits and thus taxes, even though nothing real has changed. If inflation turns worse, as many analysts predict, FIFO would force companies to pay real taxes on phantom profits as the value of goods gets inflated while they sit in inventory.
The third business tax hike would be the new levy on carbon emissions. Regardless of the form it takes — a cap-and-trade system or a carbon tax — and despite the good reasons for it, it’s still a tax, money out the door for which a company gets nothing.
The problem with sticking it to business in these three major ways is that, ultimately, business doesn’t get stuck. Tax-wise, a company is just a bunch of incorporation papers; all taxes are paid by people — customers, shareholders and employees. And guess who would bear most of the burden of these tax increases? It’s the U.S. employees of the companies being taxed.
Research has shown that when business taxes are raised by a dollar, 70 to 92 cents comes out of employees’ pay. When workers wake up to that fact, they may decide this is one time they don’t want the White House beating up on business.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
Was the President done in by the economy, or by the politics of the economy?
H/T to National Review Online