Friday, August 1, 2014

Federal Income Tax

Open Email to Texas Sen. Ted Cruz:

Dear Santa Cruz,
Sen. Bernie Sanders of Vermont castigated American companies in international business from not paying corporate US taxes. I subsequently advised Sen. Sanders of facts concerning US corporate income taxes, suggesting that he had no basis for complaint unless he wished to take a Marxist attitude on the subject, which he appears to have done. I also suggested that he should get his corporate tax rate in line with the rest of the world at worst and eliminate double taxation of corporations and stockholders at best. I sent you a copy of my essay.
You replied with a general mailing saying that we need general tax reform and referred to your cosponsorship of Senate Bill S.122, also known as the Fair Tax Act of 2013. You did not supply any details, but I looked them up.
The bill was introduced to the Senate on January 23, 2013. It was also assigned to a congressional committee on the same date. The congressional committee will consider it before possibly sending it on to the House or Senate as a whole.
The bill is intended to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States. As you see, it has remained in committee for more than a year and a half. The general consensus is that it has 0% chance of getting past the committee and 0% chance of being enacted.
I have two suggestions to make.
Stop wasting your time on developing bills which have a 0% chance of going anywhere. In essence, you are taking too big a bite. Confine your efforts to smaller actions of the whole, which have a chance of being enacted. In the case under consideration, I am suggesting that a reduction in corporate income tax, to be consistent with corporate income tax on a global level, might have a chance of passage. It would be less likely that elimination of corporate income tax would be possible, but if that is judged a possibility, include that in the discussions.
My second suggestion is that you advise your staff not to send out general mailings in response to specific situations, which are only remotely related. It creates a bad impression of attention and understanding on your part.

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