If corporations are people, why then are they not taxed like individuals?
Why is corporate taxation a "flat tax" while every other individual pays into a progressive system?
But don't get me going on this corporations are people tripe. That isn't quite where I was going with this notion to tax corporations on a progressive scale.
And I'm not proposing to tax corporations based on the raw amount of their stated profits as one might naturally be inclined to think would be the fundamental basis for any progressive formula.
Instead, I would base the rate of corporate taxation on the GETI (Global Extraction Tax Index) and the concept is really quite simple. Why not base the rate of corporate taxation on a simple ratio of its global profits in comparison to its stated domestic profits? If the method is fashioned wisely, companies demonstrating that 100% of their profits originated in the USA would receive the best rates while companies like Apple, Nike, or General Electric, generating 50% or more of their profits from offshore operations, would be forced to pay at a higher rate for their global extraction of human capital and natural resources from other nations.
Such a radical basis would throw an immediate wrench into well-designed corporate schemes to shift real profits, jobs, and even themselves offshore to avoid paying higher taxes in what is rapidly becoming a real race to the bottom. There are serious proposals to do away with corporate taxation altogether. I imagine there are at least 30 senators who would vote straight up to eliminate corporate taxation today.
It's time to fight back with proposals that put claws and teeth in a way that matches our hope and belief. Among Democrats it used to be called a backbone.
And because I am a huge geek, I believe that the people can express their political will through mathematics! It is my purpose to give voice to authentic progressive impulses that would force corporations to become better Americans and simutaneously eliminate ten thousand pages from the tax code.
All corporations should be subject to the following rate of taxation based on the following formula:
rate of corporate taxation = 0.15 + 0.076 ln (GETI)
where GETI = (Global Profit / Domestic Profit)
If a company's profits were derived from entirely domestic sources, then the GETI is equal to 1 since the company's global profit is equal to its domestic profit. If the GETI is equal to one the second term of the equation goes to zero and the rate of taxaion is equal to the first term at the low end of the scale set at 0.15 or 15%. Phew, sorry about that.
If you are unfamiliar with the math, the natural logarithm (ln) of unity equals zero. That is, ln 1 = 0. The basis then becomes less political and more scientific because it is based on the principles of natural law that govern the population curves for optimal and sustainable growth. I have sought to optimize rather than maximize corporate profit in a global setting. My goal is not to destroy capitalism, but to tame its worst impulses rather than treat it as if it were divine and not subject to scientific review.
So, picking on Apple some more. Apple claims that 50% of its stated profits originate from offshore sources. Let's see how a progressive corporate tax would help make Apple a better American and Global citizen:
Apple's rate of taxation = 0.15 + 0.076 ln (2) = 0.15 + 0.0527 = 0.2027 = 20.27%
General Electric claims that 80% of its profits originate offshore, hmm, what would be its corporate tax?
G.E. rate of taxation = 0.15 + 0.076 ln (4) = 0.15 + 0.1054 = 0.2554 = 25.54%
There will still be strong incentives to reduce tax exposure by investing profits offshore but there is nothing wrong with this if the shareholders hold the corporation responsible for eventually returning a profit on their foreign ventures.
Instead of constantly defending the status quo or taking it in the shorts with ridiculous but well-oiled proposals to eliminate the corporate tax or the estate tax WE NEED TO CHANGE THE CONVERSATION. The left, for all its purported intellectual heft is being out-gunned and out think-tanked by a band of influential pirates on the right and it has frustrated me for years.
Well, I am a one-man think tank who is tired of being fed shit sandwiches and being told (by my own party) how good they will taste (when you get used to it).
We need to turn the tables on globalism and corporate greed even within our own party before we become completely defenseless in the wake of its inertia.
Could someone forward this to Bernie Sanders or Elizabeth Warren for me?