[Hoot Gibson]

https://wiseguys2015.com/2017/11/14/what...ob-growth/

This is a very informative article on the correlation between corporate tax rates and job growth.  In my opinion, the 15% corporate tax cut that Trump implemented greatly benefitted the wealthy.  I could have understood lowering the rate to 27%, which would have resulted in a real tax -rate for corporations between 17-22% instead of the 10-15% that most end up paying.

Regarding the[i] first approach[/i] to the relationship between corporate tax rates and job growth, the Center for Effective Government reports in a recent study that employment shows no relationship to corporate tax rates. Consider the following graph.

[Image: https://wiseguys2015.files.wordpress.com....jpg?w=940]
As can be seen, corporate tax rates are about the lowest they have been since World War II. Yet there is little, if any, variation in job growth across 60 years of declining corporate tax rates. If declining corporate tax rates were indeed a stimulant to job growth, we would expect to see an increase across time in the rate of job growth. But, we do not.

The problem with your analysis is that the economies of Japan and Europe were decimated during World War II. The U.S. invested heavily in rebuilding Europe and Japan but it took many years for them to recover. That meant that U.S. companies had very little competition until the 1960s, when Germany and Japan began to make headway in the auto market with cheap, low quality autos. U.S. companies continued without strong global competition into the 1970s, but the U.S. had planted the seeds for radical improvement in products made in Japan. Germany had a long history of making high quality products but U.S. companies had a head start on German manufacturers and other companies in western Europe.

Following World War II, Dr. W. Edwards Deming was dispatched to Japan to train Japanese companies in quality control methods. The most significant lesson that the Japanese companies learned from Deming and his associates was statistical process control (SPC). At the time, the quality of most American products was poor because of the lack of competing products in the market but American products were better than those made in Japan. Japanese companies like Toyota embraced Deming's principles of quality control, including SPC, and the quality of their exported products began to improve at an ever increasing pace. By the mid to late 1970s, the quality of the best Japanese cars had surpassed the quality of American made cars and trucks and because they were smaller and more efficient, Toyota, Nissan, and other Japanese auto companies began to thrive during the oil embargo when Jimmy Carter was president.

In the meantime, American manufacturers had grown complacent and had not adopted SPC in their plants. Besides the drastic improvement in the quality of Japan's autos, other industries such as electronics applied the same SPC methods. BTW, Japan awards the Deming Prize to Japanese companies for outstanding quality achievements.

The point that I am trying to make is that the graph that you posted is really meaningless because there were more important factors at work than corporate tax rates. American manufacturers now face strong global competition in almost every part of the manufacturing sector. Raising corporate tax rates well above those of global competitors, most of whom already have an advantage in labor costs and environmental regulation compliance costs, will result in Americans being less competitive in global markets.

Anybody who doubts what I am saying need only go to Amazon's web site and search for goods made in the U.S.A. I try not to buy products made in China and I am willing to pay more for American products but in many cases there are no American alternatives. Then I search for the same product made in Europe. If I don't find a product made in Europe, then I search for the same product made in Asian countries not known for using slave labor.

Raising corporate tax rates is idiotic. It is just one more Trump policy that Biden is destroying without caring about the consequences. Punishing the rich, and especially corporations, always plays well to the Democrat voters but it is foolish to expect that higher taxes will result in a more prosperous or more "fair" economy. Full employment should be one of the primary goals of any administration and the road to that objective does not run through higher taxes.