The U.S. is a worldwide business leader. However, high corporate taxes increase the difficulty for businesses to compete internationally in this age of globalization. Private investment in the U.S. can be increased if the federal statutory corporate income tax rate is reduced. According to Heritage analysts, the federal corporate rate matters for U.S. economic growth because all corporations’ investment decisions are influenced by the tax rate’s effect on a project’s rate of return. Additionally, it influences where multinational businesses decide to invest in new productive capital. In order to spur economic …
It’s a fact that runaway spending, not lack of revenue, is the cause of long-term federal deficits. Still, some continue to push for higher taxes to solve the problem. A favorite tool of would-be revenue raisers is to eliminate “tax expenditures”—revenue the federal government “forgoes,” they say, due to tax preferences given to priorities like employer-sponsored insurance, mortgage interest payments, and contributions to retirement accounts. (Of course, since the money was never Uncle Sam’s to begin with, it’s inaccurate to say the federal government is somehow deprived by collecting less …
Tax-hike advocates have erected yet another straw man to protect their high-tax policy, now arguing that little economic harm would be done if Congress and the president were to raise taxes on higher earners because these high-tax sufferers would have saved the money anyway. Yet the issue is not saving vs. consumption; the issue is incentives, as Robert Barro points out in today’s Wall Street Journal. Of course, the tax hikers prefer to talk in terms of whether tax cuts for the wealthy would help the economy. But we’re not …
It takes investment to get sustainable economic growth. We can’t spend our way to growth. We have to save some of the stuff we make today and use it to create new, higher value, tomorrow. If we produce and consume it all, then our economy lives “hand-to-mouth” and we do not grow. Investing is risky. There is no guarantee that the investment will pay off. Investors weigh many possible scenarios when determining whether or not to make an investment. If the expected return on an investment does not meet an …
This year’s Index of Economic Freedom contains the unsettling news that the United States has dropped out of the exclusive club of free economies and is graded “mostly free” for the first time in the Index’s 16-year history. The United States’ Index score dropped from last year’s 80.7 to this year’s 78. For many Americans who still have their jobs and incomes, “mostly free” may feel no different than “free.” For the nearly 20 million who lack work or the millions more who find themselves working for a lot less …
As the State of Indiana announces it will no longer invest in bonds issued by banks and automakers who receive federal bailout money, and waits for a court ruling on whether the the U.S. government acted legally in the Chrysler bankruptcy, we thought we would bring you another installment of Meet GM’s Bondholders. Today: Jim Graves. I have worked for General Motors and Ford Motor Company and currently am an independent software developer. I am [speaking out] on behalf of my mother, an 80-year-old retired GM employee and small bondholder. …
The Obama Administration finally seems to have noticed that all of their policy announcements so far have only fueled economic despair, not alleviated it. So President Barack Obama took the rare opportunity yesterday of offering some investment advice to the American people: “What you’re now seeing is profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal, if you’ve got a long-term perspective on it.” In other words, Obama wants Americans to Buy! Buy! Buy! But before you rush out and …
