Wednesday, June 20, 2007
The Wall Street Journal today editorializes against the proposed private equity tax bill in The Blackstone Tax:
Congressional staffers don't even bother to hide the tax bill's arbitrary nature, calling it "the Blackstone bill" and preparing to pass it without hearings, Treasury analysis or debate in tax-writing committees. Asked why he is undertaking this exercise, Montana's Democratic Senator Max Baucus candidly explained "because it's in the news so much. . . . There's an awful lot of money there." ...
[T]his Blackstone fracas does highlight the mess that is the U.S. corporate tax code. The 35% U.S. corporate tax rate is one of the highest in the world, but the truth is that many if not most companies pay a lower "effective" tax rate. ... If Congress really wanted to stop this corporate tax "leakage," it'd reduce the corporate rate for all companies to 15% or so. Ireland and other countries have done this to their great economic and fiscal benefit. The tax arbitragers would be quickly unemployed and these tax fights with millions of dollars spent on lobbyists and legal expenses would cease. The evidence around the world is that a low, flat tax rate increases compliance and might yield considerably more income than today's 35% rate with its Swiss cheese of exceptions....
America didn't become prosperous by punishing men because of their lifestyle or previous policy errors. That's the sort of thing they do -- or used to do -- in Beijing.