How You Can Tell Business Taxes Are Too High

Political Calculations is consistently one of my favorite blogs.  Recently, they had two blog posts (part one, part two) showing the link between taxes US corporations pay and foreign direct investment by US corporations.  As you would expect, with corporate payroll taxes rising over time, off-shoring becomes a better option.

The important thing to note is that, even though corporate income taxes are a relatively low percentage of GDP compared to payroll taxes, they are still a relatively high percentage in comparison to pretty much every other country on this planet.  So even without the relative difference, there would still be some level of outflow toward countries with better tax policies.

Stupidity

Ilya Somin says what I want to say.

According to these geniuses, Congress could theoretically force anybody to do anything as long as there is some “substantial” economic activity.  I think Congress should mandate child labor, and their not doing so is a substantial economic drag.  I mean, why are we spending thousands of dollars a year educating munchkins when we can make them work for us?

Also, I’m pretty sure the tarring and feathering business is neglected in modern life, so there should be a regulation requiring the tarring and feathering of Jeffrey Sutton and Boyce Martin.  To make it substantial, we’ll have thousands of people do it every day.  That’d be substantial!

Oh, and slavery should be brought back.  Screw that 13th amendment; it’s a boon for “substantial” economic activity!  And it would take factory and textile jobs back from those Chinese!  Where could this argument possibly stop?  Even at its absurdest, I can’t see a logical reason to say “whoa, now we’re talking two different things here!”  In one case, you’re having the machinery of the State compel people to invest the fruits of their labor into specific areas.  In the other case, you’re just cutting out the middleman.

Fraudulent Research Grants

Apparently, in the EU, a criminal effort was able to get $72 million in fraudulent research grants.  Steven Hayward believes that these are probably “climate change” grants, as the money has been flowing to that strand of research (at least if you’re on the “we’re all going to die unless we give the government more power now!” side of things).

My point is a little bit different, though.  What is the probability that private firms would have been bilked for $72 million by hucksters?  I believe it would be significantly lower than the probability that the government would fall for the same.  When you spend your own money, you tend to want returns and take some time to do due diligence.  But when you are spending somebody else’s money on things for other people, who cares who really gets the money, as long as the money’s out?  You follow the process, and the process is all that matters.

You Expected Different?

Pete Spiliakos and John Opie are disgusted that President Obama is making an obviously political timing decision with regard to withdrawing troops from Afghanistan.

Opie makes a good point, noting that foreign policy is just an irrelevancy to the modern, New Left sort of Democrat.  They don’t mind starting wars—whoops, I’m sorry, “kinetic military actions”—but they sure don’t like to fight them.  Anything more stressful than lobbing some cruise missiles in and that cuts down on the time they can spend distributing the boodle.