Morning Reads for Monday, April 2nd

April 2, 2012 5:40 am

by Jason · 6 comments

Here in Georgia…
- Despite legislators saber-rattling about federalism and the Tenth Amendment, the budget for FY 2013 has a lot of money from the federal government.
- Personal income grew by 5% in Georgia last year.
- Georgia Power customers may finally get some relief.

National stories of interest…
- The US now has the highest corporate income tax in the world.
- Sen. Olympia Snowe (R-NE) gives President Obama an “F” on bipartisanship.
- Facebook’s TOS could be a problem if you don’t want questionable photos or statuses online.
- According to a Gallup poll, 2/3 of the media in the world are free.
- High taxes in Maryland has lead to cigarette smuggling.
- Just 25% of Americans support the war in Afghanistan.
- Fareed Zakaria says it’s time to legalize marijuana.
- Wall Street would be happy with SCOTUS striking down all of ObamaCare or keeping it all in place.
- Still trying to figure out how SCOTUS will rule on ObamaCare? Jacob Sullum explains why the answer could be in the questions.
- The minimum wage in San Francisco has killed Subway’s $5 foot longs.
- FBI to agents: It’s fine to bend or stretch the law.
- Ron Paul has spent nearly $500,000 per delegate.
- A federal judge has ruled against bloggers looking for money from the Huffington Post.
- Nick Gillespie explains the panic over bullies is ridiculous.
- Why are you on the global payscale?
- Shikha Dalmia explains why opening up the economy through liberalization will help the poor.
- Remember when Obama opposed expansive executive authority?
- The National Journal shows us the 10 Senate seats most likely to change hands.

A few that I like…
- Bill Shanks previews the 2012 Atlanta Braves season.
- 2014 should see at least three former Braves inducted into the Hall of Fame.
- Chocolate helps you stay thin.
- Hacking an iPhone password apparently isn’t that complicated.
- What does Disney’s epic flop, John Carter, teach us about economics?

Max Power April 2, 2012 at 8:48 am

- Despite legislators saber-rattling about federalism and the Tenth Amendment, the budget for FY 2013 has a lot of money from the federal government.

Finding hypocrisy under the Gold Dome is like finding gambling in Casablanca. Shocking!

- The US now has the highest corporate income tax in the world.

Once again the rates are essentially meaningless due to all of the deductions and credits built into the tax code. You want to lower the rates, get rid of the deductions. Unfortunately, the Chamber wants to lower the rates and keep the deductions.

- The minimum wage in San Francisco has killed Subway’s $5 foot longs.

And yet you can still get a $5 foot long in Santa Fe?! No the truth probably is that it’s simply expensive to do business in San Fran. Rents are high, shipping is costly due to high gas prices, and yet labor is expensive. But you can’t blame it on the minimum wage alone.

- Shikha Dalmia explains why opening up the economy through liberalization will help the poor.

From the article…
Grusky’s claims about rising income inequality are seriously overblown. But even if they weren’t, it wouldn’t automatically follow that we should care given that the material well being of Americans has not only been improving, but even equalizing across classes.

Except that material well being can be bought on credit, which has been a problem. Sigh. Sometimes it’s like economist want to be deliberately obtuse.

xdog April 2, 2012 at 8:49 am

Highest nominal corporate tax rate, maybe. Real rate, no way, given the loopholes, credits, and deductions available, and if you get your money off-shore you probably don’t pay anything, assuming you’re a corporate person.

I Miss the 90s April 2, 2012 at 8:57 am

Why is it such a big deal that the US has a high corporate income tax rate?

I know I have a reputation as kind of an elitist, and here I go again.

What I know and you don’t is that fewer than a third of all US corporations even have to pay income taxes. True story.

We have a long tax code because we have a lot of exemptions, deductions, and credits available to the business world. This is a good thing. In many ways the system can be more fair by having these exceptions embedded in the tax code. Nobody should expect my biotech firm to pay taxes the same exact way as GE, and the exact same way as Merry Maids or restaurant franchises…etc. The fact that many of these exceptions are made to favor the elite are a separate issue, but an issue nonetheless.

The idea that we should scrap the tax code and have more blanket taxes (ie Flat tax and FairTax, etc) dispose of the idea that the private sector has idiosyncrasies. One complaint made by conservatives regarding the AHA, and an incorrect complaint, is that it applies a one-sized fits all healthcare system to 50 different states (states in fact have no less control than they do now). FairTax, Flat Tax, and 9-9-9 all attempt to apply a one-size-fits-all federal solution to 300million people and 7 million business entities. As I have said before, the income tax is the most efficient tax idea so far, but we also have a pretty fair tax system in general (no pun intended). Exemptions, credits, deductions, etc all work to make a more fair tax system.

So, again, who cares if the US has the highest corporate income tax in the world? Well, smart people do not care. It is a line of hollow, symbolic rhetoric. Businesses do not care if the US has the highest corporate tax rate because they will not be paying that tax rate. In fact, they probably will not have to pay any taxes at all…because that is how pro-business even the Democratic Party is.

Max Power April 2, 2012 at 9:25 am

I find it interesting that the first three comments all sank the “highest corporate tax rate” argument. If only the media would do this to some presidential candidates.

Ed April 2, 2012 at 10:47 am

“The US now has the highest corporate income tax in the world.”

Dubious study is dubious.

But anyway, looking at the 10 lowest…

Chile Just coming out of decades of beyond awful economic malaise, still not going well.
Greece Nuff said.
Iceland Again, enough said.
Slovenia Still poor.
Turkey A success but entirely separate from their corporate tax rates.
Czech Republic Still poor, although less so than before.
Hungary Middling economy.
Poland Only European country to avoid a recession in the past five years due partly to the massive government investments.
Slovak Republic Still poor although less so than before, lags far behind their former countrymen who aren’t doing well.
Ireland Enough said, although their funk comes from real estate.

So, basically, Jason just posted a link that affirms his overall view of taxes… just because.

John Konop April 2, 2012 at 11:26 am

As I see it large corporations have a very low tax rate via special interest lobbying and an army of tax attorneys that small companies cannot afford. That is why we need a lower rate but we must end the giveaways. Small corporations in general do not pay the low rate in the below article.

……..Corporations pay a lower effective tax rate than Warren Buffett and Mitt Romney, but you wouldn’t know it from all the complaints that our corporate tax rate puts our country at a competitive disadvantage. Despite an official corporate tax rate 35 percent, last year, U.S. corporations paid just 12.1 percent of their earnings in federal corporate income taxes. Buffett’s tax rate is 17.4 percent; Romney’s reported 2010 tax rate was 13.9 percent.

The corporate tax system is riddled with loopholes and subsidies that do create competitive problems………..

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/03/11/EDG91NILV9.DTL#ixzz1qtf6S2d4

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