Business Growth Initiatives
Business Growth Initiatives
The 3 R’s of my Business Growth Initiatives
- Reduce Regulation
- Reduce Taxation
- Renew Jobs in America
There are two key issues here that need to be improved upon – government regulation and corporate taxation if we are to renew jobs in America. A full review of regulations are in order to determine if the current state of commercial affairs still requires regulations that have been on the books for decades. Our world has changed, our market places have changed, many things have changed so it begs the question – Why have regulations remained the same for years, or even decades? Is it not time we review these? Let’s let business focus on what it does best and let’s get government get out of their way and off their backs. We need to see if you can replace government regulation with just merely government oversight of self-regulation. In the event business entities are unable to self-regulate, then the government may need to step in to keep order and ensure an honest and fair marketplace for the consumer.
Now, let’s look at corporate taxation on profits of companies. First, we must realize that it is you and I the consumer who ultimately pays taxes placed upon all businesses as it is simply a “cost of doing business” to all business owners and is factored into their profits and return on investment. Many are led to believe that corporations skirt taxation and pay little to no tax. Try telling that to two favorite punching bags of the current Administration – ExxonMobil and Wal-Mart – they might beg to differ...
- ExxonMobil - $81B in Profit, $36B in Total Incomes Taxes (You can tack on another $41.719B in other taxes and duties). In addition, ExxonMobil paid out over $8B in dividends which would then result in another $1B is so in taxes paid by the recipients of these dividends.
- Wal-Mart - $20.898B in Profit, $7.145B in Income Taxes
Back in May 2008, there was talk by the Obama Administration to tax profits of U.S. companies that were held overseas. Myself and many others panned this idea as a jobs killer and in October 2008, the administration relented and has tabled this – at least for now. Not only did I pan it, but I offered up an alternative – an alternative that even the Houston Chronicle labeled “A Better Strategy”. The summary of that strategy was to basically cut the corporate income tax rate to 10%, but more importantly, reduce the tax rate to 0% on small businesses. My definition of a small business is any business with a profit of less than $1 Million. Click here to read the full letter to the editor. In October 2009, the Chronicle published another letter I wrote detailing the need to cut taxes on small businesses. Click here to read this letter.
If we are to renew jobs in America, companies, especially small businesses, must be able to retain more of their profits to reinvest into the expansion efforts of their business operations instead of expansion of government operations. Currently, the corporate tax rates quickly rise from 15% to 39%, then fall back to 35%. After $100,000 in profit, the government wants nearly 40 cents out of every dollar of profit you earn. Ask yourself this – “Who do you think can more wisely spend $1 – A small business owner or the federal government?” I think we all know the answer to that question.
People are always complaining about companies shipping jobs overseas. While part of that reason is pay scales, another is tax burden. If the government did as I suggested and removed the corporate tax on small business and greatly reduced it on large ones, the job growth in the US would be significant. Instead of the government asking – What income can we tax and how much can we tax it?, they should be asking – How can we enact policies to grow income (i.e. GDP) (which by default, will grow tax receipts, which should NOT then be used to grow government).
Reducing taxation would not require much budget cutting. Currently corporate income taxes amount to just 13% of the revenue the federal government receives. 2% comes from excise and estate taxes, duties and other minor taxes. 85% come via you and I, the American worker – either through income taxes or payroll taxes. Major corporations routinely cut budgets of certain departments 5% or 10% across the board. If private industry can do this if time of spending constraints, why can’t the federal government do it? The answer is they can, but they refuse to make the hard choices.
