S.T.R.I.V.E. CORPORATE TAX REFORM HIGHLIGHTS 090812


S.T.R.I.V.E.

Strategic Tax Reform Incentivizing Valuable Employment

This policy is to be debated by the people and the deemed worthy portions voted on by the Congress. See updates at striveforamerica.wordpress.com Send comments to striveforamerica@gmail.com.

Tax incentive #1 Reduce tax on C-corporations and other reforms

1A. Reduce corporate income tax rate

Since Japan has lowered their corporate tax rate the United States now has the highest corporate tax rate in the industrialized world. Our ranking has fallen from #1 in 2008-2009 survey to #7 in 2012-2013 survey in the World Economic Forum’s Global Competitive Index: www.weforum.org

Proposal: Tax the first 150,000 of taxable income at 15% and all profits above that at 24%. This will make the USA more competitive with other countries.  Because most U.S. states have corporate taxes that average 6.4% this will bring our top combined federal and state rates to approximately 30.4%.

Most countries have lowered their corporate tax rates, here are a few examples www.oecd.org/tax/taxpolicyanalysis/oecdtaxdatabase.htm#C_CorporateCaptial:

2012                                       2000

Australia              30.0%                                    34.0%

Canada                   26.1%                                    42.4%

France                  34.4%                                    37.8%

Germany             30.2%                                    52.0%

Ireland                  12.5%                                    24.0%

Italy                       27.5%                                    37.0%

Korea                    24.2%                                    30.8%

Switzerland        21.2%                                    24.9%

United Kingdom 24.0%                                  30.0%

United States    39.1%                                   39.3%

Canada’s lowered corporate tax rate has helped them to surpass the U.S. in some areas.  In the 2012 Index of Economic Freedom, www.heritage.org/index/ranking Canada is 6th and the U.S. is 10th.  Canada with a population of less than 35 million added 140,500 jobs for March and April 2012 while the U.S. with a population of 314 million, nine times larger than Canada only added 211,000 jobs.

1C. REDUCE CONFLICT OF INTEREST FOR AUDITORS 35% direct, 35% Sec fund, 35% general revenue

Set up through SEC publicly traded company funding mechanism so that auditors are paid only 35% directly from the corporations that they are auditing and 35% from a SEC funding pool tapping publicly traded companies with the last 30% paid from general government revenues and another 5% to oversee SEC.  The 35% paid by the audited company should provide enough of an incentive to have an efficient audit but will allow the auditors to concisely disclose more of the business’ questionable practices without fear of economic ruin.  There should be term limits for auditors as the auditing self-regulating bodies propose.  Enron was a scandal that was hidden in plain sight.  The disclosures of impending doom were found by John R. Emshwiller, a Wall Street journal reporter on the oil and gas beat in Texas from looking at the company’s financial statements and interviewing officers at Enron. This provision will improve our financial reporting which will allow us to scale back anti-competitive provisions of Sarbanes Oxley and Dodd Frank legislation.

1D. Repeal code section 162(m) that generally limits to $1,000,000 the tax deduction for annual compensation paid to an executive officer of a publicly traded corporation.  This “unconstitutional” Clinton era provision led to stock option fraud such as Enron, Micro Strategy, Adelphia Communications and WorldCom and to reduced tax collected because executive wages were converted to capital gains. For a listing of accounting scandals see http://www.forbes.com/2002/07/25/accountingtracker.html

 

Gerald R. Geddes, CPA

Strive for America Founder

9695 Main Street, Ste C.

Fairfax, VA 22031

Phone 703-764-0829

Fax 703-764-0830

Cell 703-477-0992

Email striveforamerica@gmail.com

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