Pat Buchanan makes an interesting point here in which he suggests dumping the corporate tax with a 10% tax on imports. An easy sell to Americans might instead be a flat 10% tax on corporations, individuals and final sales. All Americans would contribute to the defense (not offense) of our country and the infrastructure we all use. The corporate tax rate would put America on the most competitive list. Finally at 10% sales tax is not going to prevent Americans from buying what they need. And food and prescription drugs might be good candidates for exception.The stock market would soar, new jobs would be plentiful with all the money corporate America would save, and April tax misery would be gone forever as only short forms would be required. All in all, fair, sensible and productive for all Americans.
News that Pfizer, the world’s largest pharmaceutical company, plans to buy Britain’s AstraZeneca for $106 billion, renounce its U.S. citizenship, and declare itself a British company, has jolted Congress.
Pfizer is being denounced as disloyal to the land of its birth, and politicians are devising ways to stop Pfizer from departing.
Yet Pfizer is not alone. Hedge fund managers are urging giant corporations like Walgreens to go nation-shopping for new residences abroad to evade the 35 percent U.S. corporate income tax.
Britain’s corporate income tax is 20 percent, and Pfizer stands to save over $1 billion a year by moving there.
In what are called “inversions,” dozens of U.S. companies have bought up foreign rivals, and then moved abroad to countries with lower tax rates, cutting revenue to the U.S. Treasury.
But Pfizer is far and away the biggest.
The real question, however, is not why companies are fleeing the USA, but why our politicians continue to drive them out of the country.
Consider. Here in America we do not tax charities, churches or colleges. Yet these institutions produce a fraction of the jobs that businesses produce.
If, as a nation, we are committed to “creating jobs,” does it make sense to impose the highest corporate tax rate in the Western world on our biggest and best job creators?
Is this not economic masochism?