Peter Drucker first pointed out in the 70s that the retirement savings of ordinary workers will end up opening the majority of public listed companies. That day has come much to the disappointment of the Leftover Left ranging from Thomas Piketty to Max Rashbrooke.
Any call for higher taxes on investment incomes and capital and even tax havens is an attack on the retirement savings of ordinary workers.
Why have no Democrats formed the equivalent of #NeverTrump?
Bernie Sanders is not even a member of their party. Have they no principles?
Many of their republican opponents do in rejecting Trump and planning to vote for either Clinton or Gary Johnson.
Sanders is an old socialist throwback whose economic policies would plunge the American economy into a deep recession harming most of all those that Democrats claim to represent.
Sander’s mind is just as inflexible as that of Trump as is his unwillingness to learn from events.
Figure 1. Evidence on switchers: The percentage of people who switched right (conservative), and previously did not vote conservative, after a lottery win
The Australia Institute has been running the line that cutting the Australian company tax rate just means more tax revenue for offshore tax departments. They will tax the larger after-tax Australian dividends in the home country of the foreign investor if Australia were to cut its company tax rate.
Source: David Richardson, Company tax cuts: An Australian gift to the US Internal Revenue Service How a cut to the Australian company tax rate would result in a windfall for the United States Treasury. Australia Institute (May 2015).
The Australia Institute obviously has not picked up on the relentless bullying that Ireland was subject to by the rest of the European Union over its 12.5% company tax.
The Irish company tax rate of 12.5% was initially on export profits. To finesse European Union member state complaints about that 12.5% company tax rate on discrimination grounds, the Irish government extended that low rate to all companies in 1995.
I am yet to see a minister of finance welcoming a company tax cut in a competing jurisdiction, rubbing his hands in anticipation of greater tax revenues on the foreign profits of companies headquartered in his country.
If there is no race to the bottom in company tax rates, you must wonder why there is substantial efforts within the European Union on tax harmonisation regarding company tax?
France and Germany are pushing plans to introduce a minimum corporation tax rate across the continent, it was reported today, in a move that could result in higher taxes on British companies.
European officials will debate plans to set a EU-wide floor on corporation tax in order to crack down on tax havens such as Ireland and Luxembourg, it emerged.
If there is an ounce of sense in what the Australia Institute said about foreign taxmen benefiting from low company taxes in Australia, high corporate tax rate countries such as Germany, France and the USA should welcome low company tax rates in destination countries for foreign investment originating in those countries but they do not. Rather than seek tax harmonisation, high tax country should welcome low company taxes in competing investment destinations but they do not.
About $2 trillion in profits is held offshore by American businesses because they do not pay company tax in the USA until they actually repatriate the profits to the USA. This is common. You wonder what the purpose of tax havens is if a company tax rate cut in Australia is so easily captured by the IRS?
Studies of the company tax in the USA suggest that a cut in that company tax would lead to large inflows of foreign investment into the USA boosting wages significantly.