True Taxation Stories
(00:00.578)
Oh, a topic that’s near and dear to my heart that we’ve covered here over the years, taxation. You know what we’re gonna do? We’re gonna frame it like one of those cop shows, like true stories. We’re gonna do true taxation stories. Well, I got one for you here, Ireland. Again, I can go back to the, this is taking me back to the Obama years where American companies were ridiculed.
They were ridiculed, all yet Biden was all upset. They weren’t patriotic. Where all these American businesses were conducting what is known as tax inversions. Now what’s a tax inversion? Tax inversion is where you as a company get acquired in a lower tax domicile by a smaller company. And it happened a lot during the Obama years because guess what? Corporate taxes are too damn high. And that’s the reality.
And that’s what will happen. Money will flow, businesses will flow. We watch it happen here in the United States. And people say, oh, this is unpatriotic of these companies. No, okay. The CEO of these companies is doing the right thing by their shareholders, saving the companies millions upon millions of dollars. And in turn, their customers millions and millions of dollars by moving to a lower tax place, whether it be Ireland or wherever it may be.
Today in the Wall Street Journal talks about Ireland. Ireland’s economy last year grew by 12.5%. Now we were making fun of Janet Yellen here and Joe Biden, and they’re getting together with all these countries talking about this global minimum tax. And we laughed at them here on the program. Ha, right, sure.
Yeah, oh sure, all these countries here, they’re like, oh sure, yeah, we’re gonna sign on to that. No, no, we don’t like growing at 12%, whatever you want, Janet. And I knew that it would never get passed and I knew that all of these countries wouldn’t sign on to it. Janet Yellen, following along with the Biden administration, again, they come up with these neat little phrases. It’s a race to the bottom. We gotta stop this race to the bottom. Now, anybody that actually can think in an,
(02:23.942)
any sort of intelligence whatsoever, would recognize that isn’t it a good thing to lower taxes for people? Again, maybe it’s just it’s my philosophy. Again, if you’re a left winger, you believe that all money, everything that is built and created is yours, and it’s yours to distribute to everybody. But in my frame of thinking is that you know what, I’d rather have people actually work for it. Keep.
keep what they’ve worked for. A global race to the bottom? Fantastic, as far as I’m concerned. Yeah, Ireland, and I quote, is swimming in money. Lower tax rates can result in faster growth and higher revenue. What else is new? Again, it was interesting. I was actually watching that they had a neat little, David Letterman did it.
documentary type thing on U2. And it was showing what life was like in Ireland in the 80s and the 90s. And again, I met a lot of, you know, immigrants from Ireland, young people my age, back in the early 1990s, and New York and the stories that they were telling was incredible. The country was a dismal mess, a welfare state.
Its national debt as a share of gross domestic product rose from 40% to 95%. Its unemployment rate was 18%. That was as high in 1987. 1995, they did an about face. The country replaced its 40% corporate tax rate with a 12.5% rate. And Ireland became a magnet for new business and capital.
investment. Yep. The number of US multinational companies operating in Ireland now stands at about 950 with 209,000 employees. The population of Ireland is 5 million. So if you were going to do an equivalency with the United States, that’s about creating like 10 million jobs. Again, you got the Biden administration right now that wants to hike the US corporate tax rate.
(04:49.602)
from any of them right now it’s 21% to between 25 and 30% as well as higher rates on capital gains, dividends, income, you name it. You think that is going to be great for the country? There’s options in the world, people. There’s, and we watch it here in this country right before our very eyes, all the companies that are moving out of, you know, the Northeast and certain high tax.
States and the Midwest and also California to other locales because it just makes sense. Now I’m gonna move on today because again this is fascinating. I mean these folks, these economists from Harvard, Princeton, University of Chicago used to be much more right of center than it is now but it’s still kind of considered a bit of a conservative school I guess. They’ve come out
(05:48.838)
praising, praising the Tax Cuts and Jobs Act of 2017. That’s Trump’s. Again, I give credit where credit is due. We’re equal opportunity bashers here on the program. And I mentioned that this was a win for the Trump presidency. I don’t give it an A rating.
And I didn’t at the time because, you know, even though it lower taxes, it got a lot of things done in order to get an A grade. Trump would have had to have gotten rid of all of the loopholes and handouts and giveaways and made the tax code somewhat coherent, shrink it. That didn’t happen, but he did lower tax rates. So the National Bureau of Economic Research, all these groups of economists, these are the same folks that make the call when it comes to recessions.
Well, they found quite frankly that more business investment, the results of the Trump corporate tax reform, more business investment, more growth, more wages for workers and little impact on government revenue as lower corporate tax rates were offset by an expanding economy. And the journal quotes this game set match or checkmate, however you want to put it.
It worked. Worked. This study has basically economists buzzing on the Twitter or the X. These are the most convincing estimates of the response of investment to corporate tax rates that I’ve ever seen. OK, this is Jason Furman. Jason Furman is the former chairman of the Council of Economic Advisors during the Obama
administration.
(07:46.862)
Taxes actually do matter. Companies that saw larger reductions in tax rates also experienced larger increases in investment in the years that followed.
Yeah, they work. I mentioned this on one of the podcasts recently, and this is another example of the difference in the way of thinking and how fairness and envy and all of these things filter their way into society and how dangerous they are. I’ve talked about envy and one of the seven deadly sins. And if you ever watched that movie, I mean, phenomenal movie. It’s one of those movies you only want to watch once because it’s that disturbing.
But then we had the movie Seven, Brad Pitt and Kevin Spacey, Morgan Freeman. What was the last sin? It was envy in that. And if you’ve seen the movie, you know exactly what I’m talking about there at the end. But yeah, I talked about it here on the program and I said, did I write a story about this? Yeah, I did. May of 2008, I couldn’t remember who was the moderator of the debate. It was Charlie Gibson.
Charlie Gibson, and I was ripping in at the time because I knew what a disaster Barack Obama’s economic plans were, and they were. They’ve been an absolute disaster. Not as, I wouldn’t say as consequential as Lyndon Johnson, as far as the country is concerned, at least not yet, but most certainly. They’ve changed things as far as the country is concerned. Charlie Gibson asked this question.
And again, I was hoping that Hillary Clinton was going to win. I was hoping that Hillary Clinton was. I didn’t want Obama anywhere near at this economic policies are ridiculous. Charlie Gibson asked this question in this debate, and I quote, you would favor an increase in the capital gains tax. As a matter of fact, you said on CNBC and I quote, I certainly would not go above what existed under Bill Clinton, which was 28 percent.
(09:57.866)
It’s now 15%. That’s almost doubling if you want to went to 828%. But actually Bill Clinton in 1997 signed legislation that dropped the capital gains tax to 20%. Obama’s response, right. And George Bush has taken it down to 15%. Obama, right. Charlie Gibson. And in each instance, when the,
The rate dropped revenues from the tax increase. Okay, people understand this revenue. That’s not what you want. You guys we’re all into collecting more taxes. They drop the tax rate and revenues went up. Government took in more money and in the 1980s when the tax was increased to 28% the revenues went down. So why raise it at all?
especially given the fact that 100 million people in this country own stock and would be affected. What was Obama’s response? And this told me everything. Well, Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness.
(11:20.45)
Okay, again, I don’t know that they realize that the president’s job is to level playing fields pick and choose winners and losers and make it fair. But it’s again, people we’ve got that out now people with equality all this stuff we’re not all equal we’re equal under the law.
We’re equal under the law. I am sorry, someone that gets up early and busts their ass their entire lives, does the right thing, puts money away, invests it. What, what, it’s not fair that, you tell me that that’s not fair that they have more than people that don’t do the same thing? Anyway, watchdog on wallstreet.com.
