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Wednesday, August 27, 2014

Burger King, Inversion, the Corporate Tax Rate and the Lies of Robert Pittenger

     I'm sort of giving the meaning of the world 'lie' a wide berth where simply being wrong is declared a 'lie'-call it the Scott Sumner berth. Still, you have to shake your head a little after seeing North Carolina Republican Congressman Pittenger on how we have the highest tax rates in the world and 'this is just shameful, shame on us.'

   http://video.cnbc.com/gallery/?video=3000305862

    This all goes back to the fallout over Burger King's merger with the Canadian company Tim Horton-the irony, is that while the stocks were up on the news, and BK is presumably doing this at least in part for 'inversion' purposes, Jim Cramer actually argues that these are two less than spectacular companies hoping that the two of them can somehow be spectacular together and while BK may be doing this for Canadian tax rates, Timothy Horton is doing this to make themselves somehow more 'American.'

    http://www.cnbc.com/id/101947959

    Many criticize 'tax inversion'-where American companies try to get a lower foreign tax rate. The answer to GOPers like Pittenger is just lower the corporate tax rate to nothing as this is both 'fair' and will allow us to 'compete.'

     I love having some knuckle dragging Republican from the South with all their racist and sexist policies-at this point it's pretty much impossible to vote while black down there with the not so Supremes gutting the 1964 Civil Rights Act-and they are also just destroying a woman's right to choose-come up and lecture the civilized country on how they should run things. Yeah we should start picking up North Carolina policies-first we should get a Confederate flag and then we should make draconian cuts to unemployment insurance. That would please Sumner no doubt.

     https://www.google.com/webhp?sourceid=chrome-instant&rlz=1C1ASUT_enUS524US524&ion=1&espv=2&ie=UTF-8#q=scott%20sumner%20north%20carolina%20unempoyment%20insurance

    http://www.themoneyillusion.com/?p=25754

    http://diaryofarepublicanhater.blogspot.com/2014/03/unemployment-benefits-and-my-scott.html

    I know that Sumner often represents himself as 'unsure' of what the effects of this are, but that's all just part of his sophistry: have no doubt he opposes UI benefits and would never criticize any rollback of them. Part of the illusion that Sumner tries to foster-and this is quite right as this is what he calls his blog-is that economics is this value free field where what matters is 'economic science' not ideology-it's the discipline's deceit going back to Friedman's 'postiive vs. normative' conundrum. I wouldn't deny that economists don't really try to learn and understand in a scientific manner. However, at the end of the day, what decides actual policy? At some point someone has to make a choice which will not be pristine but will come with this policymaker's ideological baggage.

     We all have beliefs-or 'ideology' to use a loaded term. My feeling is that a Sumner opposes things like UI or the minimum wage for the same reason I support them. Ethical beliefs that can be informed but never fully overthrown by facts alone no matter how scientific-and the jury is till out on how scientific econ is anyway.

      http://noahpinionblog.blogspot.com/2014/06/big-ideas-in-macroeconomics-book-review_8748.html

      At most none of us get beyond the realm of correlation-to really being able to rigorously prove causation too often. This is why Sumner overdoes it when he accuses Obama for instance of 'lying' about tax rates after Obama-when you look at it, it comes down as usual to how you define certain terms, certain assumptions, etc.

       On the inversion issue, I feel like someone like Pittenger is just sputtering a soundbite that is very misleading. Of course, Sumner wouldn't criticize him for this. What Pittenger should say is that US nominal corporate tax rates are the highest in the world. Once you adjust it to real rates, we don't have the highest corporate rate in the world or anywhere close.

        As for 'corporate tax reform' many big corporations don't even want tax reform-the current effective rate for large corporations is 12%-why would GE for instance want a 'reform' of the tax? Pittenger, of course, will play his usual game of blame the Democrats for all the world's ills but he is certainly not advancing the cause of reform by being so misleading.

       

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