Between state and federal corporate income taxes, the United States has the highest tax rate on corporate profits in the world, writes Bob Marcellus, the hedge fund manager who is acting as point man for the business initiative to scrap Virginia’s corporate income tax, in an op-ed in today’s Times-Dispatch. “While other countries have been slashing this tax, America has been asleep at the switch.”
Marcellus acknowledges the fiscal challenges of balancing the budge while abolishing the state’s 6% corporate income tax, which is anticipated to generate about $660 million in revenue this year. His solution is setting the date the tax cut goes into effect 12 to 24 months in the future, “creating a ‘wow’ factor for growth while still building tax revenue until the actual implementation.”
Marcellus also anticipates attacks on his idea on the grounds that it is anti-labor.
“It would be easy to criticize this tax as a give-away to major corporations. But this initiative is …overwhelmingly pro-labor. … National and provincial governments across the political spectrum have been working to cut this tax and have experienced increasing tax revenues as a result. People don’t understand how destructive this tax is to jobs, investment, and business growth. They certainly don’t understand that labor ultimately pays the highest price.”
I concur. Workers make gains only when the economy is growing, jobs are being created, and employers compete for labor by bidding up wages and benefits. The Bush/Obama era has demonstrated that bailing out too-big-to-fail banks and propping up failed automakers while starving small business of credit is no way to expand the number of jobs. Virginia can’t un-do the failed policies of the federal government, but we can stimulate investment and job creation here in the state. We need to get rid of the corporate income tax.
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