President Obama, as promised, is changing America. High taxes and abusive enforcement are compelling businesses and ordinary citizens to leave the country altogether.
The United States has much higher corporate tax rates than other industrialized countries, and increasingly, the IRS pursues more aggressive enforcement tactics than foreign tax authorities.
The United States stands alone among industrialized countries by requiring U.S. businesses to pay taxes on profits from overseas operations and investments—in addition to taxes paid to foreign governments.
Of course, what American corporations actually pay varies a lot, thanks to many exemptions, deductions and provisions to delay taxes; however, the average combined U.S. and foreign tax burden on profits is about 30 percent, whereas the average for foreign rivals is about 23 percent.
Entrepreneurs pay some of the highest tax rates in the world on unincorporated U.S.-based businesses. Regardless of where income is earned, they often pay federal, state and local taxes in excess of 50 percent, and must pay both U.S. and foreign taxes on overseas income.
Ordinary citizens permanently living and working abroad also must pay U.S. and foreign taxes, face burdensome dual filing requirements and abusive penalties. U.S. tax laws can impose penalties of more than $1 million on unpaid taxes of as little as $20,000.
U.S. bank reporting requirements to combat terrorism and tax evasion are so much more burdensome than European countries, and impose such terrible penalties for unintentional reporting errors, that foreign banks will not permit smaller U.S. companies and citizens to open checking accounts.
Imagine trying to run a small sales organization or live and work in Rome without a local banking account to pay bills.
The U.S. tax system is so burdensome and arbitrary that a 2013 study undertaken by a European think tank ranked it 94th out of 100, right after Zimbabwe, for its impact on business competitiveness. No wonder the U.S. economy is growing at half the pace as during the Reagan-Clinton years and creating about one-sixth the jobs.
Recent IRS abuses of American businesses, taxpayers and nonprofits for political views and contributions—and Justice Department reluctance to prosecute malefactors—only add to perceptions that the U.S. tax system makes America no place to do business. And increasing numbers of businesses and individuals are making that choice.
In Honor of His 103rd Birthday, Here Are The 20 Best Quotes From The Late, Great Milton Friedman | John Hawkins