A Tax Idea

           We hear so much about corporations (1 out of 4 or 5) that pay no federal taxes. We know that billions of dollars worth of help, through deductions and incentives, are lavished on businesses every year.

           What would happen if every dollar’s worth of state and federal tax benefits to businesses were taxed by states as income? Including the cost of social services due to poverty wages, and the cost of benefits withheld from part-time workers.

           Here’s how it would work. Say that in 2014, businesses with 50 or more employees, and franchise installations with any number of employees, received $240 billion in federal tax benefits. They would owe each state a share of tax revenue on their $240 billion in benefits, say $4.8 billion of income to be taxed by each state. Any state that did not have a robust state income tax would of course forego significant revenue. The $240 billion could be allotted equally at 2% per state. Thus Wyoming could get the same amount to tax as Georgia, etc.

           Furthermore, state Legislatures could reduce business tax liabilities by granting incentives for actual (VS. promised) job creation or quantifiable tax generating commercial activity in the state, etc.

           Around here, we think freaky ideas like this will help end the obstruction of comprehensive reasonable tax reform in America. Congress needs to end partisan bickering and reform taxes. And a flat tax is NOT the answer. That’s just another freaky idea being pimped around to comfort the comfortable.