THE TAX CUT AMERICA CAN’T DO WITHOUT

September 13th, 2017

There is a point of diminishing returns on a nation that over taxes its citizens. Pray for a fair and equitable tax policy to be developed in the coming months.

“This is also why you pay taxes, for the authorities are God’s servants, who give their full time to governing.” (Rom. 13:6)

How much should corporations pay in taxes?….

The late congressman and Department of Housing and Urban Development Secretary Jack Kemp, who was a major figure in U.S. economic policy from the 1970s to the 1990s, never tired of telling audiences of blue-collar workers that “you cannot love the employee and hate the employer.” Jack (as everyone called him), a former professional football quarterback, ironically became the greatest salesman for Reaganomics. He was a man of enormous physical and mental energy, who read deeply in economics and then preached the gospel of economic growth as no one did before or after.

He would ask his audiences: “How many truck drivers would you hire if there were no trucks?”

Jack Kemp’s parents owned a small trucking company and, as a boy, he saw how hard they worked and saved to build their company. When they accumulated enough money, they would buy another truck and then hire someone to drive it. The truck manufacturer created more jobs to build the trucks for the Kemp family and thousands of others.

Whether it is a small family trucking company or a giant corporation, the process is the same. The company needs to acquire the funds in order to acquire the machinery and hire the workers to operate them. The more savings and investment is taxed, the less capital formation, resulting in lower productivity, economic growth and job creation.

The U.S. corporate income tax rate is comprised of a federal rate of 35 percent and an average of 5 percent for the states, giving an average 40 percent rate. The corporate tax has long been recognized by economists as one of the worst taxes. Despite all of the talk about “greedy corporations,” corporations are merely a way of doing business. The corporation does not “pay” the tax, only individuals pay taxes — so the corporate tax is passed along to consumers in terms of higher prices, to the stockholders in terms of lower dividends and capital gains, and to the workers in terms of lower wages. Recent studies have shown that most of the corporate tax falls on the workers. Consumers resist higher prices and can often buy similar goods and services from foreign producers where the tax rate is lower. Investors have many options — both in form and location, including the entire globe — as to where to put their money. The worker has fewer options and hence suffers most from the corporate tax….

President Trump has presented several very sound principles for tax reform. Yet, without the details being presented, the tax reform effort is already being attacked by the Democratic leadership….

Some who only view the world in static terms say we cannot afford a corporate tax rate cut. Our relative economic pie is getting smaller compared to the rest of the world. Without cutting our noncompetitive corporate tax rate, businesses will continue to move to the rest of the world, leaving fewer jobs for Americans and less to tax…. (Excerpts from Richard w. Rahn’s article in The Washington Times – Richard W. Rahn is chairman of Improbable Success Productions and on the board of the American Council for Capital Formation.)

2 Responses to “THE TAX CUT AMERICA CAN’T DO WITHOUT”

  1. Felicia Penner says:

    Lord God, may the humiliated Republicans who stone walled the repealing of Obamacare be moved by your hand , as well as loosing at the polls in ’18, to implement our Presidents Tax reform. We know from history how it gives a new burst of adrenaline to a beleaguered economy by what Reagan did in the 80’s. Our economy is near total collapse, a tax cut could give us the time needed to reinstate the infrastructure that has been demolished. Lord we deserve an economic collapse, but we pray that you would give us time to get the populous working first, we ask again for mercy. Make this crooked way straight before our President please, and bless the work of his hands. Thank you for the mercy you have shown us in giving him to us as president. In Jesus name, Amen

  2. Jacquie W says:

    Dear Heavenly Father, we come in humility asking that you give President Trump and his team wisdom and creativity to develop a fair and equitable tax policy that will bless our country as a whole. Lord, we ask that you open the eyes of senators and representatives so they can work in unity and support the policy once it is presented. Give them the understanding that this is not about politics and votes, but it is for the good of all and above all is to give you glory in everything. In the name of Jesus, we ask.

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