Wednesday, April 6, 2016

Business Taxes Are A Sign of Stupid

As free-market economist Alan Reynolds of the Cato Institute recently noted, government interest rates were rock bottom in the 1930s. That's because the Fed and most other central banks were way too tight.
Even worse today, having stuffed banks with excess reserves, central banks in Europe and Japan are punishing those banks with negative interest rates. They're also punishing savers. This is not good policy.
What we have now in these uncertain times is not so much a monetary problem as a major fiscal problem. In particular, corporate tax rates must be slashed in the U.S. for large and small businesses. We also need full cash tax expensing for new investment and an end to the double taxation of foreign profits.

The case for lower business taxes is just obvious.  One of the many maddening things about US politics is no one's even talking about the potential growth in reducing business taxes and/or the way a 4% growth rate would heal the federal government's death spiral.

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