Linkmeister

Pass the Maypo

You're facing a budget deficit of $400-$500 billion this year and rising, so the obvious thing to do is reduce corporate taxes, right? Oh, and give companies an incentive to move jobs offshore, too.

Supporters say the six-month tax holiday could lure as much as $300 billion back into the United States, which in turn would increase investment and create jobs.

[snip]

"The company that left Louisiana is going to pay a 5 percent tax on the widgets they make overseas, and the company that stayed in Louisiana is going to pay a 35 percent tax," said Senator John B. Breaux, Democrat of Louisiana. "If that isn't an incentive to leave, I don't know what is."

Critics also warn that there is no guarantee that the companies will invest their repatriated profits in new factories or larger work forces. Indeed, Republican lawmakers defeated an amendment offered by Mr. Breaux on Wednesday that would have required companies to reinvest their foreign profits in things like new equipment. (My emphasis)

Sometimes I think somebody needs to stand in the well of the Senate and yell "Hey! Mush for brains! Think like normal people!"

Ah, you say, but in Iraq there's more thought being given to how economics works, right? Well, no.

One would have thought that the failures of swift and sudden free market changes in Russia in the 1990's would have made even extremist economists cautious.

[snip]

But never mind such historical lessons. The Iraqi planners, apparently including the Bush administration, seem to assume they can simply wipe the slate clean.

That's right, boys and girls. The plan is for the top corporate and personal tax rate to be capped at 15%. Forget the fact that the country's entire public sector infrastructure needs to be rebuilt; just imagine how small a safety net there will be for a population which has an estimated unemployment rate of between 50% and 60% if tax revenues are so limited. "The current plan is supported neither by theory nor experience, only by the wishful ideological thinking of its advocates."

It's as though these planners feel like they have an entire country to try their theories on, and they're all rubbing their hands together in glee. The fact that there's a heavily armed population of 25 million which might not agree with them doesn't seem to have entered their minds.

Mush for brains indeed.

Posted by Linkmeister at October 2, 2003 02:15 PM