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Originally Posted by astralis
i would argue that it is smart for mccain to ask for a drop in the corporate tax- it helps attract international investment and boost domestic investment by corporations, while the tax itself does not contribute much to government funds (and is widely dispersed, making it inefficient).
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Corporate is not a huge part of overall income tax revenue, but it's not exactly small potatos.
In 2006 it was about 15% or $381 billion of $2.36 trillion the IRS collected.
You, me and unincorporated businesses made up 44% or $1.236 trillion and the rest came from employment taxes, mainly FICA (half paid by corporations and businesses).
A cut in the corporate income rate from 35% to 25% would save corporations about $110 billion annually (using 2006 as a base), less in a recession.
I agree with you that a cut would help stimulate business competition and capital investment, which would be good, but the important question is, how will we make up shortfall?
We could cut Fed spending by eliminating most earmarks, which far exceed $110B annually. That would be a very productive tradeoff, IMO, a far better use of money than tossing it away on pet projects. I am sure McCain has that in mind.
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i would argue AGAINST cutting the federal gas tax- the difference is not enough to help either the american people (as mccain says), nor is it enough to help the gasoline companies (if they keep the difference). and the tax goes to an important sector, building up the transportation network of the US- a government good which helps the economy.
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Well, you're not running for president last I heard.
Look, Obama put his finger on it when he called it election year politics. But he's missing the point that the old pols see clearly. A candidate has to demonstrate that he cares for people's hardship in concrete ways even if the relief proposed isn't all that great. The average person would probably see a savings of around $50 for the whole summer.
Not much, but thanks for thinking of us anyway.
It gets a little better for guys like me who have to drive for work and burn about 300-500 gals a month. We'd save about $200-$300.
It gets better for long-haul truckers. One large trucking company like Con-Way consumes millions of gallons every year. Would a savings of $180,000per million gallons reduce shiping costs enough to lower food costs a tad?
The picture looks best in terms of the overall national effect. We consume about 400 million gals A DAY. At 18 cents a gallon, the daily tax haul on that would be $72 million, but you have to discount farm/off road and government users who don't pay the tax. Just for the sake of discussion, let's reduce the haul by 25%. That would come to $54 million DAILY. Multiplying that by the 90 days of summer would put nearly $5 billion into the economy. (I think the actual estimate is higher.) It's not a large, but it helps, and it hardly puts a dent in the highway trust fund.
In any case, McCain and Hillary know it's not a lot of money, but their message is "we care about you."
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i believe hillary was also in favor of the gas tax relief, which has been lambasted by economists. her response was to call economists "elite" and not worthy of consideration.
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You can see right through her "elite" comment; it was aimed Obama over the heads of the economists.
