Jan 2011 Agenda: Progressive Corporate Taxes

Democrats have been protesting that only 3% of small businesses are affected by the Bush tax cuts… this is technically true, it is also true that almost all the small businesses that create jobs are part of this 3%. The unspeakable truth is that wealthy small business owners are the only heroes we can turn to in this economic crisis.

So, the incoming Republican Congress needs to take swift and decisive steps to hand Obama a tax cut bill that he cannot veto.

In light of this, it would be a mistake of epic proportions to get tangled up in arguments about extending Bush’s tax cuts to the wealthiest Americans. Instead, the GOP ought to come out in favor of Progressive Corporate Taxes.

I submit that more than any other long term tax cut, Obama will have a harder time arguing against this proposal – because it just smells like a jobs boom.

Corporate taxes stay the same for companies earning profits over $1BILLION.

Companies earning under $10 MILLION pay no taxes.

For earnings in between $10M and $1B there is a graduated tax schedule.

This is a slam dunk for Main Street.

For the right kind of wealthy Americans (small businessmen), it means they are less likely to “flow through” profits to themselves, and instead keep corporate profits inside the company, where they are more likely to invest and grow jobs. In this regard it serves much like as a tax on consumption: income taxes are still high, so small business folk have strong incentives to expand and grow.

And since so many of the job creating small businesses make less than the $10M minimum, these businesses will save billions in tax filing costs… and IRS agents can spend more time focusing on big corporations.

Just ensure the bankers / traders on Wall Street can’t all become independent contractors, and this proposal will flow cash to the job growth sector: small businesses. Obama won’t be able to scream about fat cats, and as the small businesses take off like a rocket, he won’t be able to argue that his stimulus had anything to do with it. Besides it’s “Progressive”, and liberals have a long history of slobbering all over the word.

In reality, all corporate taxes are double taxation…. the profit is taxed and then dividends are taxed when they are dished out to shareholders. We can’t end all corporate taxes, but we can easily end some of them.

This is the Tea Party solution. This is the most politically palatable way to favor small business, making it easier for them to chew up the big guys, which should be our jobs strategy in no uncertain terms.