The EU reaffirmed its commitment to fighting corporate tax avoidance through a statement by European Commissioner Pierre Moscovici. This should come as no surprise following recent financial scandals exposed through the Panama Papers and Luxleaks, and the ensuing international outrage towards corporations “not paying their fair share”. Yet, the push for higher corporate taxes disproportionately also affects ordinary citizens by increasing their tax burden.
Corporate tax avoidance is regularly said to be unfair to other taxpayers. Indeed, proponents of higher corporate taxes accuse multinational companies of de facto increasing ordinary citizens’ tax burden because these ones would be forced to compensate states’ budget shortfalls.
However, this artificial opposition between corporate and public interests is dishonest. When one argues corporations don’t pay taxes, the implication is that shareholders, workers and consumers are not taxed at all, which is completely untrue. All these people are taxed in various ways, including income tax and valued-added tax, among other costs imposed by national governments. The only purpose of this distinction is to push ordinary citizens to support higher corporate taxes without allowing them to realise they are the ones who are going to pay the bill.
In fact, a corporation is a legal fiction which aims to reduce transaction costs between physical stakeholders, which are shareholders, workers and consumers. Consequently, every fiscal cost imposed on corporations will necessarily be paid by these people. Therefore, as corporate taxes increase, shareholders’ dividends and workers’ salaries will decrease, while consumers will be forced to pay more for their purchases.
Read more at the The Daily Caller
Since January 1937, Americans have dutifully paid into Social Security trusting that its benefits will be there for them when they retire. Yet, that faith now seems unfounded with Social Security hemorrhaging cash. According to the latest report by Social Security’s Trustees, the program’s combined trust funds will be unable to deliver full benefits in 2034, forcing future beneficiaries to suffer a 21 percent benefit cut. In order for the program to survive, comprehensive reform is necessary.
Earlier this month, Rep. Sam Johnson (R-TX) introduced the Social Security Reform Act of 2016, a bill that aims to prevent the forecasted cuts by implementing a wide series of structural reforms to the program. According to the Social Security Administration’s Chief Actuary Stephen Goss, if the reforms outlined in the bill are implemented, “the combined OASI and DI Trust Funds would be fully solvent…throughout the 75-year projection period.”
There are no new ideas in this bill, nor does it aim to radically change the structure of Social Security. Rather, it’s a plan which would not involve raising taxes. In general terms, the plan outlined in the bill would affect Social Security in two ways: the mechanics of Social Security would be updated to account for modern economic conditions, and the program would further redirect funds towards poorer beneficiaries.
Continue reading at Townhall.
Lawmakers in Chicago are forcing citizens to fear their tax burden more than the inevitable winter cold.
In addition to boasting one of the highest sales tax rates in the country, the infamous “Netflix tax,” and a pending tax increase on water, Chicagoans will now see an increase in both property and fuel taxes for the purposes of funding the “Red Ahead” program. The program seeks to “rebuild vital infrastructure for Chicago’s future,” but rests upon a premise shakier than a rusting portion of “El” tracks.
City officials claim that monies levied from these specific tax increases will go exclusively to fund the Red Ahead project. However, constituents should raise their eyebrows reading this statement, given the pension debacle occurring within the state. Both the State of Illinois and the City of Chicago have misappropriated funds to the tune of hundreds of millions of dollars. Why should Chicagoans trust city lawmakers to handle these funds appropriately amidst an ongoing financial crisis? City officials in Washington, D.C., certainly did not handle funds for their streetcar program well — $200 million over the last 10 years on a streetcar system that barely functions.
Continue reading at Watchdog.