Other things being equal, would you start a new business in a higher- or lower-tax jurisdiction, and would you prefer to live and invest in a higher- or lower-tax locale?
By Richard Rahn
The Washington Times
If a U.S. business operating globally has to pay a 35 percent (U.S.) corporate tax rate (the second-highest in the world) plus state corporate taxes while its international competitors pay much lower rates, the U.S. company will be at a competitive disadvantage. Rather than provide necessary tax relief, the new Treasury proposals, if enacted, will give American multinational companies two basic choices for the long run – move the company outside the United States to a more tax-friendly jurisdiction, or go out of business and fire the workers.
It will come as no surprise that many of the officials and members of Congress who are behind this piece of economic foolishness come from high-tax states such as New York, Illinois, Michigan and California and seem to be oblivious to the fact that many of their most productive and highly paid residents are in flight to states with no personal income tax, such as Texas, Florida, Tennessee and Nevada.