posted on Oct, 26 2004 @ 02:45 PM
I've seen a few articles that relate to this since Congress passed their latest corporate tax bill. However, Fortune seems to sum it up the best.
I first want to start off by mentioning that business accounted for 40% of the tax revenue for this country after WWII.
Tax revenue from business hasn't been this low since the 60s. However, that was not due to legislation, it was due to declining profits.
The tax rate for corporations, over the last 15 years, has fallen from 26.5% to 17.2%. Guess who gets to make up the difference in tax revenue?
I'm not opposed to lowering taxes for business. Depending on what economic model you choose to follow, it can be good or bad for the economy.
However, what I am opposed to is that this reduction in revenue does not raise the wages of the common worker.
Recent studies have shown an increasing trend over the last decade that is very disturbing. Although taxes are going down for companies, there is not
a proportional increase in wages for the worker. What this means is that the worker has to make up the difference in lost tax revenue without a
proportional increase in income. Therefore, this leaves less income to be used to buy houses, put in savings, or spend on commerce in the economy.
This offers several problems I don't see any lawmakers addressing. It seems as though cutting taxes is a double edged sword.
What do you all think?
For a link to the Fortune article click here:
It is a short article, maybe 500 words or so and has some hoo-hah about Warren Buffet in it too.