I would close all corporate federal income tax loopholes, except the clearly job-creating R&D tax credit, which should be made permanent, and with higher R&D tax credits going to the smaller businesses. And to be much more effective, the R&D tax credit must be simplified.
But I think that clearly the dumbest thing to do is what nearly every self-serving, short-sighted Republican is now proposing…..simply reduce the corporate federal income tax rate across the board, and watch the jobs trickle down from it. What absolute incredible lunacy.
If this were done, you would see almost no job creation from it, particularly in the near term. The only thing accomplished by across-the-board lower US Corporate Federal Income Tax Rates is much higher Corporate after-tax profits. Such a deal!
What has to be done to create a lot of jobs in the near term is massive short-term business tax incentives, like the investment tax credit, the jobs tax credit, and the R&D tax credit.….and all three tax credits done on a massive scale, and right away, and all earned only if the business gets a sufficient number of net jobs added, that must remain for a reasonable period of time, on a total company payroll count basis, or the tax credits are subsequently recaptured.
And the corporate federal income tax rates should also be permanently reduced, but it has to be done very wisely.
In addition to permanently lowering the US Federal Corporate Income Tax Rates on all US Corps, it is critical that this be accompanied by a very healthy US corporate federal minimum income tax, with progressive minimum tax rates applied as worldwide pretax income of each Big Corp rises (say the first $10 bil minimum taxed at 10%, the next $20 bil minimum taxed at 15%, the following $30 bil minimum taxed at 20%, and any worldwide income above $60 bil in each year minimum taxed at 25%).
And in all fairness, there should also be an annual level of worldwide pretax income that the minimum tax would not apply to, such as the first $100 mil earned in each year by each US business.
What the above minimum tax on large US Corps will accomplish is that instead of US Big Corps trying to shift income and jobs from the US to lower-taxed foreign tax havens, they will be motivated to instead do just the opposite.
Why? Because if a US Big Corp locates the jobs overseas in a foreign tax haven, it will still probably get a huge chunk of US federal income taxes owed, due to the very healthy, progressive US minimum tax that will apply.
In addition, to maximize US job creation, it only makes sense to have a lower Federal Corporate Income Tax Rate on small and medium-sized businesses, than that on large corporations. A wisely designed progressive US Corporate Federal Income Tax Rate system would maximize US job creation, and also be fairer to smaller businesses.
The Suits will have to run the numbers, but if all of the Corporate Tax Loopholes are closed, except for the R&D tax credit, then I think something like the following progressive US Corporate Federal Income Tax Rates would make sense, and optimally do the best for the US economy and US job creation, as well as also making a very substantial and fair dent in the US Debt, assuming the objective is to reduce Medicare Costs significantly, but not reduce Medicare Benefits:
Taxable Income Range.................Corporate Tax Rate
.....first $100,000.................................10%
.....$100,000 to $500,000...................14%
.....$500,000 to $1 mil.........................18%
.....$1 mil to $10 mil..............................22%
.....$10 mil to $100 mil.........................26%
.....$100 mil to $1 bil............................30%
.....above $1 bil.....................................34%
On the other hand, if all of the Corporate Tax Loopholes are closed, except for the R&D tax credit, then I think something like the following progressive US Corporate Federal Income Tax Rates would make sense, and optimally do the best for the US economy and US job creation, as well as also making a very substantial and fair dent in the US Debt, assuming the objective is to both reduce Medicare Costs significantly and also to reduce Medicare Benefits significantly:
Taxable Income Range.................Corporate Tax Rate
.....first $100,000.................................10%
.....$100,000 to $500,000...................13%
.....$500,000 to $1 mil.........................16%
.....$1 mil to $10 mil..............................19%
.....$10 mil to $100 mil.........................22%
.....$100 mil to $1 bil............................25%
.....above $1 bil.....................................28%
