There has been a lot of hand wringing over Trump’s deal with Carrier to save jobs in Indiana. I’ve been thinking about tax policy.
Here’s my half baked idea.
- I like the idea of lowering (if not getting rid of entirely) the corporate income tax. Big companies can afford to hire lawyers and accountants to offshore business or invert their business to avoid income tax while other companies can’t. This places the tax burden on small and medium sized companies. Ditch the corporate income tax to level the playing field.
- Audit big companies to determine how many foreign workers they have (including in subsidiaries) and charge them personal income tax and payroll tax for their overseas work force. E.g. If GM has 1,000 people in Mexico making cars, GM pays no corporate income tax, but has to pay the payroll tax and personal income tax burden for the 1,000 Mexican workers as an equivalent rate to what it would pay US workers in the same positions. If GM moved those jobs back to the US, then the US workers pay the income tax and GM doesn’t have to.