I am hopeful that President Elect Obama can do some very positive things for the nation, especially on the side of moral role modeling and national unity. However, we know that our new President Elect Obama is a big friend of unions, and we know that there will be some form of payback for their help in getting him elected. We also know that people expect him to get the nations economic growth and jobs back on track. My question is: Why do we think that unions are good for the economy when you consider the biggest union states (Pennsylvania, Michigan, Ohio) have the highest unemployment rates and the worst economies?
I am concerned that if we start throwing bones to the unions, the nations economy will sink to the levels of Ohio, Penn, and especially Michigan. Currently, Michigan is experiencing major negative economic growth and 9% unemployment (and growing). The US economy cannot afford to adopt the failed Democrat/labor union policies that are dragging the rust belt states down.
With the economy at the front of everyone’s mind and the angst we all feel, the knee-jerk is to punish greedy corporations for the trouble we are in. The blame game will continue as we search for a culprit, someone to point our fingers at so we can feel better. The question will remain open because there are so many people to point the finger at. There are legislators and executive politicians who forced lenders to lend money to people and businesses in lower socio-economic strata who had less than acceptable credit or unverified income, there are greedy CEO’s who walked out of their dying corporations with millions in salary raises and severance, there are foolish investors who put everyone else’s eggs into one basket, and there are naive citizens who have borrowed more than they could possibly repay on the dream that has been forced upon everyone that every American MUST own a house. Let the class warfare begin. Senator Barack Obama’s tax plan is to raise the corporate tax rate. We currently have a 39.5% corporate tax rate, the second highest in the world. Then we wonder why our corporations ship their jobs over seas for a tax break. Of course if they go over seas, they will get a tax break by virtue of being in a nation that has a lower corporate tax rate. So what is the obvious solution? Cut corporate tax rates? No, Obama says to raise them, and even if they do not operate in the good old U.S. of A., charge them a tariff for wanting to do business somewhere else where they can save money. As anyone with common sense should know, the job of a corporation/business is to make money, not to hire people. The fact is that if you raise taxes or fees on corporations and business, they will pass it on to you and me with higher prices, they will lay off employees, or they will cut quality and dividends. That brings us to this week’s quotable.
“Corporations don’t pay taxes, people pay taxes.”
Walter Williams, former chairman of economics for George Mason University
Corporations do not pay taxes, they collect them from you and me for Uncle Sam.