The power to tax is
the power to destroy. Even Pharaoh, 3000 years ago, aware of what this wise saying. Unfortunately, it seems to have been forgotten by some of the more influential modern economists. But, what is destroyed? What is destroyed are economic incentives for business formation and growth.
With Congress and the White House talking about a stimulus package sporadically to spur economic growth, it is important to distinguish what tax policies will work and what is sheer puff and political business as usual (increase spending) disguised as economic stimulus package to. . With this in mind, you might say that this article is a short primer on understanding the growth aspects of tax policyTaxes, broadly speaking, can be categorized into two types of headings ? taxes on capital and taxes on labor. Since this article will be dealing with taxes on income, capital taxation would be identified with the corporate income tax. Similarly, a tax on labor is equivalent to the personal income tax schedule. Now the sixty-four thousand dollar question. Which one is more important in helping to stimulate economic and business growth?
As President Lincoln stated in one of early speeches as president, the tax on labor is of more importance than the tax on capital. Why? Economic growth is driven by net new business formation. Or, to put it another way ? the economy is driven briskly when everyone wants to be a business owner. When entrepreneurs (risk takers) to start enterprise, their business income tax is initially reported on the personal income tax schedule. As the business grows, the owners may incorporate and file using the corporate tax rate. (As a reminder, when individuals start businesses, they hire people. Businesses with less than 100 employees are responsible for 75% of the net new job growth. Net new business formation should be the goal of tax policy designed to stimulate economic growth.)Since the tax on labor is more important than the tax on capital, the top marginal income tax rate on labor should be less than the top corporate rate. Presently, the top corporate tax rate is 35%, while the top tax rate on labor is about 35%. If policymakers are serious about providing incentives for stimulating vibrant business growth, the top personal income tax rate should be reduced to less than 35%. To provide a real fillip to economic growth, the top personal income tax rate should be significantly below 35%. It was no accident that President Regan, in his second term, reduced the top individual rate to 28%. This was a true top rate that did not include any phaseout of deductions or any of that nonsense that has the perverse effect of increasing the marginal rate.
Economic policy makers, Whether they are in position to administrative or legislative , like to take the path of least resistance ? similar to electrons in a circuit. Their path of least resistance is to stimulate economic growth to increase spending. It does not work! (If it did, many of the major European economies would be booming by now. Instead they have been in the doghouse for the past ten years.) The money for their Increased spending is just sucked out of the private sector. The net effect is zero. Providing financial incentives for individuals to take immediate and significant business risks by reductions in the top marginal individual income tax rate is the best way to promote vibrant and sustained economic growth. id=?article-resource?> Sanford Kahn, Business Author / Speaker, has been a professional speaker for over 30 years to both the corporate and national trade and professional association markets. She is the host and producer of the popular Times mirror cable vision series ?Ask the Economist?. Mr. Kahn has authored many articles on the business impact of future economic trends. His most recent publication is The Great Economic Myths That Dominate Business & Our Lives. For more information please visit his web page at http://www.businessspeaker.biz .Find More Economic Articles
mario williams vcu jordan hill unlv sam young ncaa bracket ramon sessions
Apple has yet to make any statements about where and when we might ever see an Apple TV product to match the impact it has had in the smartphone and tablet markets. But news of an investment by its key manufacturing partner, Foxconn, could point to the confidence others have of what might be coming soon. Foxconn is investing a combined 133 billion yen ($1.6 billion) in TV maker Sharp Corporation and a flat-panel JV it has with Sony -- and it has added a commitment to buy up to 50 percent of all of Sharp's LCD panel output. The deal is the largest-ever by a Taiwanese manufacturer in a Japanese supplier and could be all the more bold, considering that just yesterday there was a report from iSuppli on how sales of flat-panel TV sales were in decline and flattening out.
In an rent vs. buy index of the 100 largest metropolitan areas in the nation, Trulia has determined it is a wiser decision to buy in 98 of them. The top ten cities where buying a home is a better deal: Detroit, Oklahoma City, Dayton Ohio, Warren-Troy-Farmington Hills Michigan, Toledo Ohio, Grand Rapids Michigan, Cleveland, Atlanta, Gary Indiana, and Memphis. The top ten where renting is smarter: Honolulu, San Francisco, New York City, San Jose California, Orange County CA, Los Angeles, San Diego, Colorado Springs CO, Boston, and Albuquerque NM. Trulia compares neighborhoods and properties, and then calculates the ratio between asking prices for rentals and for-sale homes to arrive at its conclusion. Based in San Francisco, Trulia tells MHProNews.com it? collects information and maintains unique files on desireable places to live through its many contacts with real estate professionals.
The New York Stock Exchange is teaming up with 
