Staring down what could be a tough year, President Barack Obama and congressional Democrats are focusing their message on the tired theme of “income inequality,” focusing state-based measures to raise the minimum wage and extend jobless benefits to the long-term unemployed.
But the focus on heavy-handed and expensive government programs is misguided. In an op-ed yesterday at The New York Times, Laurence Kotlikoff explained that the best way to help American workers is to eliminate the corporate income tax.
“That might sound like a giveaway to the rich. It’s not,” wrote Kotlikoff, an economic professor at Boston University. “The rich, including Boeing’s stockholders, can take their companies and run — and not just from Washington State to, say, North Carolina.”
“To avoid our federal corporate tax, they can, and often do, move their operations and jobs abroad,” he noted. “Apple’s tax return says it all: The company, according to one calculation, paid only 8.2 percent of its worldwide profits in United States corporate income taxes, thanks to piling up most of its profits and locating far too many of its operations overseas.”