After the GOP's epic Obamacare repeal failure, Americans are wondering if the party can fulfill its other big promise to voters, tax cuts. Specifically the GOP has focused on cutting America's corporate tax rate, the highest in the developed world. The high rate harms American businesses, especially small businesses that can't afford to navigate through tax code loopholes to lower their rates. Today on Bloomberg, Sahil Kapur details the movement in Washington around a potential tax bill. Kapur writes: The House GOP tax blueprint backed by Ryan calls for a 20 percent corporate rate, … [Read more...]

In a piece on the Cato Institute website, my friend and Cato Institute director of tax policy, Chris Edwards says the president's instincts about lowering the corporate tax rate are spot on. However, noises being made in the administration, even by the president himself, about raising taxes on high income earners are not a good sign. Chris explains what could happen if high income earners are hit with even more taxation. Trump went on to say, “I have wealthy friends that say to me, ‘I don’t mind paying more tax.’” His implication is that tax hikes on high earners would not be damaging because … [Read more...]

After spending one day as the world's richest man, Amazon CEO Jeff Bezos is watching shares drop in price considerably in pre-market trading today. Last night Amazon announced its profits for the most recent quarter were a mere $628 million on revenues of $38 billion. That's a 1.7% margin. Despite generating over $900 million in profits from its Web Services segment, Amazon's international retail operations lost money, dragging profits down to $628 million for the quarter. Shira Ovide writes at Bloomberg that despite the poorer than expected performance, Jeff Bezos is doing exactly what … [Read more...]

Congress after Congress and president after president have promised the American people to fix the broken U.S. tax policies that keep money in corporate treasuries locked overseas with no inexpensive way to come home to benefit American workers or shareholders. The failure has created a record setting $1.84 trillion in overseas corporate money unavailable to Americans. Technology companies from the U.S., exactly the firms that America is relying on to create better jobs, are being hurt the most by the bad repatriation tax policies. Apple is worst hit writes Tatyana Shumsky: Apple Inc. … [Read more...]

In a time dominated with news on the fate of Obamacare and any potential replacement, Dan Mitchell of the Cato Institute keenly refocuses attention on what is the world's biggest government program, and one that is headed for a fiscal train wreck: Social Security. The program will soon have an annual budget of $1 trillion, a budget larger than that of all but six countries on earth. But Dan points out the scary fact that the program will have a shortfall of $44.2 trillion between now and 2095. He writes: And for those who want to know about the gap between the inflow and outflow, here’s … [Read more...]

The Trump administration has released its first full budget plan and it is indeed radical by Washington standards. For starters, it increases spending, but not as fast as the spendthrifts in D.C. would like. Naturally no one is happy. Dan Mitchell, a scholar at the Cato Institute and a friend of mine, has written a piece at International Liberty on "The Five Most Important Takeaways from Trump’s Budget." Here's a summary of his five main points: First, the budget isn’t being cut. Indeed, Trump is proposing that federal spending increase from $4.06 trillion this year to $5.71 trillion … [Read more...]

Is there anything better than a snow storm back home while you’re in sunny Florida, Arizona or St. Somewhere? How great is it looking at your iPhone weather app in flip-flops at cocktail hour smiling at the arctic blast settling in back home? Life is good, right? Makes one want to send a postcard home. On your way to the post office, you could also mail your tax-returns. In a perfect world--and yours is pretty good in this story--your taxes would be one flat rate; a postcard sized filing, simple enough that your big problem that morning is beating the piss out of your opponents in pickle … [Read more...]

The centerpiece of the House Republican tax reform plan is a border-adjustment tax (BAT) that would tax all imports and exempt all exports. The revenue generated from this new tax would be used to fund a reduction in the corporate income tax. Supporters of the BAT tax contend that it levels the playing since many countries already exempt their own exports and tax import via the value-added tax, but Dan Mitchell and Veronique de Rugy dispel that myth in a recent Wall Street Journal piece. The plan calls for dropping the top corporate tax rate to 20% from 35%, while exempting exports and … [Read more...]

Implementing a flat tax would allow America to end distortive double taxation schemes like the Death Tax, capital gains taxes, dividend taxes and more. Cato Institute Senior Fellow Dan Mitchell writes that without double taxation America's tax code would no longer "discourage capital formation by imposing a higher effective tax rate on income that is saved and invested (compared to the tax rate on income that is consumed)." Dan writes: Why would the economy grow faster if we got fundamental reform such as the flat tax? In part, because there would be one low tax rate instead of the … [Read more...]

With the epic failure of Paul Ryan's healthcare reform bill in the House , can the GOP get it together enough to pass tax reform? The editors of The Wall Street Journal write that prospects for a tax bill have gotten much harder. President Trump campaigned on breaking Washington gridlock, increasing economic growth and lifting American incomes. The health collapse undermines those pledges. The legislative failure is obvious, but less appreciated is that House Speaker Paul Ryan’s reform included a pro-growth tax cut and major improvements in work incentives. The 3.8-percentage-point cut in … [Read more...]