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11/9/11

US Economy: It Stinks, But The Only Way To Fix The Economy Is To Squeeze The Middle Class

This election is about stark differences on economic policy, but one of the few fiscal issues on which Democrats and Republicans agree — surprisingly — is how to tax corporations. Every Republican presidential candidate, and even the guy who currently has the job they're after, wants to lower rates. Raising them, or even maintaining them, might satisfy the anti-corporate angst of protesters and populists, but it won't come anywhere near paying off our debt.

Most people who study the issue agree that the top federal corporate tax rate (35 percent of profits) is simply too high. The cardinal rule of taxation is that whatever you put a levy on, you'll inevitably get less of. Taxing corporate activity means less investing, less hiring, fewer jobs and a smaller economy, which hurts the rich, the poor and the middle class alike. While this may seem like Republican propaganda, NPR's Planet Money ... polled many leading progressive policy groups and academics, all of whom told us that they would support lowering the top corporate tax rate.

In his 2011 State of the Union address, President Obama agreed. Republican candidates are even talking specifics: Mitt Romney proposes dropping it to 25 percent; Rick Perry wants to lower it to 20 percent; Herman Cain, of course, is pushing 9 percent. ...

EU-Digest comments: It ain't necessarily so if it doesn't go together with an increase in taxes for individuals earning more than $100.000....

For more: It Stinks, But The Only Way To Fix The Economy Is To Squeeze The Middle Class : Planet Money : NPR

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