Minnesota would benefit from federal tax reform

  • Article by: Omar Ishrak
  • Updated: July 11, 2013 - 5:59 PM

Help Minnesota companies compete, and Minnesotans will reap the rewards.

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pumiceJul. 11, 13 8:39 PM

From the article: "Tax rules that allow American companies to be globally competitive could result in more jobs here in Minnesota. With almost 95 percent of the world’s consumers living outside our national borders, foreign demand for American goods and services offers tremendous potential for the United States." Foreign demand for American goods and services, Mr. Ishrak? If American workers aren't earning enough to generate the 70% of GDP demand to which American business has grown accustomed, how are workers earning $2 a day going to generate that demand?

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brotherkennyJul. 11, 13 8:42 PM

Simplified tax codes do not generate the campaign fund raising opportunities that the politicians you expect to pass this reform generally participate in. Sure, if done correctly, the actual effective corporate tax rate could remain the same or even go up while encouraging more repatriation of overseas profits, but who are you asking to get it right? Our "we can't work with them" leaders. The ability to run the government poorly and blame the other side is how our elected officials get the interest from the respective simplistic bases to maintain their political positions. Additionally, if something good happens under the apparent leadership of one party that's bad for the opposition right? Thus, regardless of the benefit to society, that can't be allowed if the opposition ever expects to regain their icy cold grip upon the reigns of power again.

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pumiceJul. 11, 13 8:47 PM

Also from the article: "Comprehensive reform to modernize the U.S. tax system should first include reducing the U.S. corporate rate [while simultaneously clearing out the underbrush of corporate tax deductions, credits and exemptions that have grown back since 1986] to a level that is competitive with other industrialized countries. Second, international tax rules should allow U.S. companies to return their earnings for investment and job creation at home without a tax penalty or a very minimal incremental tax at most." Why not reverse the steps, Mr. Ishrak (first, return earnings for investment and job creation [while simultaneously clearing out the underbrush of corporate tax deductions, credits and exemptions] and second, reduce the US corporate tax rate)? That way there'd be certainty that "[t]hese changes can be adopted without increasing the deficit."

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lindn1Jul. 11, 13 9:40 PM

It sounds like Mr. Ishrak is trying to justify sending more jobs out of the country. Good thing he is continuing to cut local jobs, so the company can pay the $25 million he made last year.

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briechersJul. 11, 1310:15 PM

Pumice...I don't see anything wrong with changing the order, but your suggestion does more than change the order by separating the rate reduction and elimination of deductions / credits into two steps rather than just one. I think most policy wonks (and the Bowles-Simpson committee) think that reducing the rates and eliminating deductions and credits should happen at the same time. I am not sure why you want a special effort to penalize companies while you are fixing an arcane tax system.

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potter101Jul. 11, 1311:37 PM

1/3 the business tax that we had in the 50's but they feel overtaxed, They pay for 7% of the total federal taxes. Tax reform baloney, free ride is what it is called in the real world.

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my4centsJul. 12, 13 8:58 AM

potter - the only corporations that get a "free ride" or hope for one are those who receive special breaks from politicians. Mr. Ishrak is proposing tax policies that would treat all businesses the same, but would encourage them to invest their earnings here in the United States rather than elsewhere. He's not even complaining about being overtaxed - he's stating the simple reality that high corporate taxes in the US results in more growth overseas rather than in the states. Returning to your evidently nirvana tax situation of the 1950's might make you feel good, but it would result in lower tax collections. More businesses would operate elsewhere in the world and our employment rate and standard of living would drop. The writers call for lower corporate tax rates is not a boon and a free ride for corporations - it's a boon for US employment and the US economy.

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cbd52585Jul. 12, 13 9:49 AM

First Ishrak hits with a bunch of numbers about the tax system, gives no sources for this information, and just expects me to assume there was no amount of cherry-picking involved in them. Then he informs me that, because our tax system SO overburdens our companies, the FIRST thing we need to do is lower their rates. Even though many studies have shown that quite a few companies pay next to nothing in taxes after all deductions are accounted for. So what Im hearing is you want companies to pay EVEN LESS for a while, until we can figure out how to eliminate the unneeded deductions, which, you know, should be easy in such a harmonious place as Washington. Maybe there is something I can take away from this opinion piece, but it comes across as patronizing and self-serving in my opinion.

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my4centsJul. 12, 13 9:49 AM

Plan from pumice: "first, return earnings for investment and job creation ... and second, reduce the US corporate tax rate." ------- How do you see this happening Pumice? Do you think corporations will change their investment strategies (doing more in the US) based on a promise by politicians to change rates in the future? The only way to switch the order like you suggest would be through more laws, regulations, and mandates. On the other hand, a simpler and lower tax structure would naturally lead to more corporate investment and expansion in the US without using force.

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gandalf48Jul. 12, 1310:30 AM

my4cents - [potter - the only corporations that get a "free ride" or hope for one are those who receive special breaks from politicians.] *** Good point, is it right that companies like GE can actually manipulate the tax code so they pay zero income tax? I own GE stock and I want tax reform so we can eliminate the industry specific deductions (i.e. alternative energy credits, mineral depletion allowance, etc.) in exchange for a lower corporate tax rate of 25% (instead of the current 35%).

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