Monday, October 1, 2012

- Setting The Corporate Tax To Zero

In a piece much criticized in the mainstream "fashion" press, I suggested a while back that the best thing the US government could do to stimulate economic growth would be to set the corporate income tax to zero.

Naturally the Obama administration agreed with that idiot from Esquire, and did nothing.

But the Chinese government has just provided the best evidence possible for what happens when you set the penalty for economic activity to zero. You get WAY more activity than you can handle. They decided to set their road tolls to zero for the Chinese holiday, and in the process created the worlds largest traffic jam, easily visible from space:

From midnight on Saturday until midnight this Sunday - the duration of the combined holiday for yesterday's Mid-Autumn Festival and National Day - passenger vehicles carrying up to seven people are exempt from paying tolls.

It's the first time in decades that the government has suspended the notoriously high tolls for a major public holiday, with the move coming as consumption falls amid slowing economic growth.

... The warning signs were there even before the tolls were suspended. In Guangzhou, cars began lining up before midnight on Saturday, waiting for toll-free travel to begin. Traffic was backed up at major expressway toll gates before dawn. Long lines were appearing on all 17 Beijing expressways by 6am, dashing many travellers' hopes of making an early start to the holiday.

Just imagine those people as the agents of foreign companies looking for office and manufacturing space in the US, and you see exactly what the result of a zero corporate tax would be. The subsequent gain from income and other taxes would more than make up for any shortfall in tax revenues after a short time. And the country would then be set up for wildfire economic growth.

It's a shame the leaders of the US government understand so little about economics.

4 comments:

chess said...

Hard to go down that path and yet still scream at R&R that same old supply sided shit.Even worse R&R let em get away with it..
A good article over the weekend talked about a lot of Americans have Stockholm syndrome.. 8% unemployment has been there for 43 months so it no longer sounds bad or shocking. If we get anything in the 7s on Friday its game set match. I was hoping R&R would get away from using 8% as a line in the sand.They didnt and it very well will bite em in the ass.Oh well

chess said...

And this is much more easily done when yo u have the media in your pocket

For Obama, A Scapegoat in hand is worth more than another round of Bush Blaming
Mon Oct 01 2012 08:56:47 GMT-0600 (Central Standard Time) · by NOBO2012 · 1 replies
Michelle Obama's Mirror ^ | 10-1-2012 | MOTUS
Breitbart is currently running a story in which Joel Pollack claims that Romney is currently filling the role of a “scape-president:” In effect, "President" Romney has been in office since mid-August, with none of the power but all of the responsibility. Which is really nothing other than proof of it's corollary: In effect, “President” Obama has been in office since January 2009, with all of the power butt none of the responsibility. Sometimes a good scapegoat is better than your bad solution.This is a brilliant strategy from Big Guy’s Big Brains. Here’s a partial list (so far) of things the...

chess said...

http://www.youtube.com/watch?v=pWnwDtc_gJw&feature=youtu.be

dont know what states this will play in but it is excellent.You guys on the easy coast getting these .Im jealous

Anonymous said...

...A picture is worth a thousand words...