The Band Wagon

I see that the editors of the Washington Post have gotten on the tax reform band wagon:

THE HOT read among policy wonks these days is “Capital in the Twenty-First Century,” by French economist Thomas Piketty. He warns of a long-term trend toward ever-concentrated wealth and urges a global wealth tax to prevent it. While that might be a bad idea even if it were politically feasible, there is merit to the broader notion that industrialized countries could better coordinate taxing wealth, corporate and otherwise, that flits around the world in search of the lowest rates. Case in point: U.S. drug maker Pfizer’s $106 billion offer for Britain’s AstraZeneca, which could enable Pfizer to flag itself as a British company and pay taxes at Britain’s 20 percent rate rather than this country’s 35 percent.

Reforming the corporate income tax without reforming the personal income tax is impractical, either from a political or fiscal standpoint. One of the things I find most troubling about support for the corporate income tax is the strong anti-business stand its supporters frequently express. I wonder how they think we’re going to produce economic growth or reduce unemployment and beat down business at the same time?

What we’re seeing on the international scene with large multi-national companies pulling up stakes to seek more felicitous tax environments in other countries is the same thing we’ve been seeing among the various states for some time. Whether international or interstate that’s a zero-sum strategy rather than a growth strategy.

The solution is obvious and I’m not really sure what alternative supporters of the corporate income tax have in mind.