Why GenZ Will Retire the 'Businesses Aren't Paying their Fair Share' Argument
Why GenZ Will Retire the 'Businesses Aren't Paying their Fair Share' Argument
The home stretch of election season is underway, and we all know what that means.
It’s the time for the ideologues to break out the “businesses aren’t paying their fair share of taxes” tirade.
However, those still campaigning on this prevarication are about to discover just how self-defeating this once effective political soundbite will be in 2024.
Here’s why…
The current corporate tax rate is 21%.
Trump has proposed bringing the corporate tax rate down to 15% while the Biden FY 2025 budget would raise it to 28%, and in the past, Harris has proposed returning to a 35% rate.
Last year, the U.S. federal government received $420 billion in corporate tax revenue which - based on its $16.8 billion daily spending habit - was wiped out in just 25 days.
Using last year’s figures, and assuming Harris adheres to her original 35% corporate tax proposal, Harris’ tax hike would add $58.8 billion more in revenue while Trump’s cut would reduce it by $25.2 billion.
Hence, the parties are essentially quibbling over a maximum of $84 billion in supplemental corporate tax revenue. This equates to just 5 days of federal spending.
Yes, the incessant berating of America’s businesses and pitting citizens against each other comes down to just 5 freaking days of additional spending!
Sure, this tactic may have helped galvanize voters in the past. However, once today’s more circumspect electorate start peeling back the economic onion, and realize that the 35% corporate tax rate won’t even buy one week of federal spending, they will feel like they’ve been propagandized.
They will assume that candidates pushing this narrative are either economically inept, or worse, that they are deceptively leaving out the inconvenient mathematical details.
And, voters - especially young Gen Zers - want to see that math! I have two young Gen Zers - one who will be voting in his first election this November. My kids, as well as their friends, are leery of politicians who sow discord because they can’t articulate the financial particulars.
Because Gen Zers - unlike their predecessors - don’t get their information from “news tickers” scrolling across their cable station, their minds aren’t wired to focus on headlines. Instead, they are conditioned to pursue the story. That is why as opposed to letting a “journalist” interpret an event for them, Gen Zers are more inclined to search social media for the raw video footage and make sense of it themselves.
They are also more apt to visit the U.S. debt clock on the internet to see for themselves just how much businesses are actually paying in taxes.
Because of the way that Gen Zers seek and digest information, it is imperative that politicians are forthcoming with facts - especially economic data.
Candidates will no longer be able to conceal that in addition to paying $420 billion in corporate taxes, businesses also spent another 50 billion dollars and squandered 1.14 billion hours on tax preparation.
Yes, you read that correctly. During the course of just one year, American businesses eat up 1.14 billion hours - equivalent to an astonishing 130,000 years - just to file their tax returns!
If anything, voters should be demanding an explanation as to why it takes the government just 25 days to deplete what it collectively costs businesses over 130,000 years to prepare for!
Any candidate who is still splitting hairs over tax percentages and berating job creators, instead of addressing why tax regulations have become so onerous that businesses require 130,000 years just to file returns, is not doing the American people, or mankind, justice.
Words cannot even begin to describe the amount of progress that civilization can make in 130,000 years. To put it into perspective, the picture below illustrates the extent of innovation that existed 100,000 years ago. Please note that this is not an actual photograph, as the camera would not be invented for at least another 129,792 years.
I seriously do not know how anyone can look at this picture and not think about all of the life-saving inventions that could have transpired, or the number of global crises that could have been resolved if those 1.14 billion hours of brainpower was allotted to innovation and problem solving instead of to tax preparations.
The shame of it all is that there are actually politicians who are so fixated on scapegoating businesses for their own failed economic policies, that they are incapable of recognizing all that humanity has lost.
For these partisans, no matter how much time and capital that America’s businesses contribute in taxes, it will never be enough.
But what they don’t seem to realize is that even if Harris could tax corporations 100% of their profits, all that would do is buy the government an extra 202 days of spending.
Let that sink in. All of America’s 2023 corporate profits combined amounts to only about 6 months of federal spending!
Although the economic impact of tax hikes would be inconsequential, the inverse is true for tax and regulation cuts.
The economy would exponentially improve if instead of burning resources on tax expenses, businesses were incented to put those funds towards employing and innovating.
In fact, if companies had allocated just one quarter of last year’s total $470 billion tax burden to workforce expansion, at today’s average annual salary of $60,000, nearly 2 million new full-time jobs would have been created and 72% more Americans would now be fully employed.
Even if corporations neglected to hire one single employee, but instead redirected those tax expenditures to innovating, it would still result in substantially more economic value than the money going to the federal government.
The reason is simple. Innovation - not government - is the engine of economic abundance. In fact, according to economists, a staggering 85% of economic growth is fueled by innovation alone. This is why some of history’s greatest bull markets and most roaring economies have all coincided with new innovation - particularly, an invention in mass media.
Imagine how much more prosperous - not to mention, safer - all Americans would be if instead of stealing precious innovating hours from businesses, the government just adhered to its mandate to “provide for the common defense, promote the general welfare and secure the blessings of liberty to ourselves and our posterity.”
Fortunately, thanks, in large part, to Gen Z voters, it is looking like common sense will prevail and the preposterous “businesses aren’t paying their fair share” narrative will finally be retired once and for all.
Then, maybe just maybe, instead of wasting breath, fighting over a few meaningless percentage points, the parties can begin uniting over ways to prevent America’s innovators from moving offshore so that today’s most consequential innovation, like blockchain technology, can empower the next economic boom and ensure American prosperity for generations to come.
