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  7/11/2006

On Corporate Taxes, Let’s Think Outside of the Box

By Jack E. Lohman

The column below reflects the views of the author, and these opinions are neither endorsed nor supported by WisOpinion.com.

In a recent Milwaukee Journal article, “Rethinking our corporate tax climate,” John Torinus touches on important issues that our state politicians must start thinking about, and corporate taxes are just one of them. The truth is, globalization has changed the playing field and we must reset to zero on many key business issues.

Let’s look at one extreme: How about cutting corporate taxes to zero? I favor that approach because the public is paying all corporate taxes anyway when we buy product at the cash register. It’s built into the product prices, like consumption taxes would be, and are thus now regressive. Let’s eliminate the middlemen -- the high-cost accounting firms that finagle the corporate tax breaks -- and have the public pay all taxes up front. We can be even smarter than that by giving the Zero Tax to only those companies whose CEO-to-worker salary ratio is less than 100-to-1; then let the boards of directors decide which is more important to the company. That will attract new business to the state and keep old businesses here, and greatly simplify tax preparation for all except those who can afford their own accountant.

To be even fairer, start our personal taxes at zero for low income earners, add a flat tax for the middle wage earners, and finish with a progressive tax for all earners over $150,000 per year.

But we can’t stop there. We must also get corporations out of the business of providing health care. Again, the public pays for all health care costs anyway, in the prices at the cash register, so let’s eliminate the 30% administrative costs and profits of the 400 statewide insurance companies. Retrain their people for badly needed nursing jobs. For what health care is costing today, we could cover 100% of the people under a Medicare-for-all system. Doctors and hospitals would remain independent and well paid; quality would remain the same, and the wait times would remain what they are today. But we’d then also cover the 15% of the population who now has no insurance, and eliminate the added payroll costs which are 15% or more of payroll in most companies.

Both of these proposals would attract business to the state and not cost the public a penny. And they’d make Wisconsin corporations more competitive with foreign imports. But then we’d have to tackle the reason why government expenditures (and taxes) are so high in the first place, and that is the direct result of our moneyed political system, where politicians are obligated to give taxpayer assets to the industries that fund their elections. That hidden cost easily adds 10% to our state budget, or about $1300 per taxpayer.

So again, taxpayers are paying for the state elections through the back door, when we could be paying with public funding of campaigns at a cost of about $5 per taxpayer per year. That’d be a bargain at 200 times the price. Arizona and Maine have implemented this and over half of their politicians have sworn off the private-money influence. In Wisconsin, over $1.4 million transferred last year from health care interests to state politicians, so you can easily understand why universal health care has not gained traction thus far. These people like things just as they are, and they are willing to share their profits with the politicians that make it all happen.

Like all government decisions, I’d feel a lot better if I knew these were being made without money changing hands at the political level. But today’s politicians like the moneyed political system they have, so November is the time to change the dynamics and vote out them out. Only then will we be able to fix the other problems.

--  Lohman is the founder of http://www.ThrowTheRascalsOut.org in Colgate and can be reached at jlohman@execpc.com.

     
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