Here's an interesting item for you. A tax cut, proposed by a Democrat for business that the Bush administration is not hot for. Go figure!!!
Thursday, October 30, 2003
A Boxer tax rebellion?
Barbara Boxer, tax-cutter? It may not sound so funny in the future. The junior senator from California is departing from the recent stance of her Democratic Party to advocate a one-time tax holiday for corporate overseas earnings.
A report by noted economist Allen Sinai found the tax cut "would boost capital spending by $78 billion, create 660,000 new jobs, and add almost 1 percentage point to economic growth over the next two years," reported the San Francisco Chronicle.
Currently, U.S. corporations keep about $265 billion to $406 billion of overseas earnings out of the United States to avoid a punitive 35 percent tax on corporate earnings. Sen. Boxer's proposal would cut that tax to just 5.25 percent for one year.
Sounding like such supply-side economics advocates as Ronald Reagan and economist Arthur Laffer - or her party's own President John Kennedy 40 years ago - Sen. Boxer explained, "I don't view this as a corporate tax break at all, because corporations are paying no taxes now, and they will pay tax when it's brought back, albeit at a lower rate."
"The Bush administration, which is usually enthusiastic about tax breaks of all kinds, has been cool to this one, arguing that tax holidays are not good policy and would reward companies for sheltering overseas income," reported the Chronicle.
We disagree. As was famously said by Milton Friedman, Nobel economist and friend of Arnold Schwarzenegger, "There's no such thing as a bad tax cut."
The Chronicle reported that Sen. Boxer is picking up bipartisan support. And if the Bush administration doesn't like this tax cut, it can come up with a better one of its own. How about a two-year moratorium on this tax? Do we hear three years? |
