Here we go again! It is campaign season and some candidates just cannot wait to say how they are going to penalize business. Hillary Clinton is proposing a new scheme where businesses that manufactured things will be tax differently than businesses that are “trading” items. I am not exactly sure what this means but it sounds to me like a tax increase on service businesses and for people who invest in business.
Let us face it, manufacturing has been on a continual decline in this country for the past 60 years. The US is known for producing intellectual property and services that are the envy of the world. Hillary Clinton, as well as some of her tax and spenders just do not get it! If you increase taxes on something you will get less of it. Increase tax on business and you will have less business in the US.
I have clients all over the world. Many times a client chooses to locate its business outside of the US because of the very high cost of taxation particularly on worldwide income. Most countries simply tax income when earned in that country. If you are a US business or US citizen (including a permanent resident or green card holder) you are taxed on your worldwide income not just the money earned in the US. This has made us uncompetitive!
Instead of attacking businesses and calling for tax increases, I am waiting for politicians to talk about true tax simplification and tax reduction. That will mean reducing government spending but it will enable the economy to grow.
Original Post By: Ronald Cappuccio