Say, Buddy. Got time to explain something to me?

Can you explain something to me? I heard Paul Ryan at his press conference describe how the new tax code will help America “recover.” And to give an example of how cutting the corporate tax to 20% will bring American businesses back, he used an example from his own state – Wisconsin. He said the biggest company headquartered in Wisconsin used to be Johnson Controls (or something like that), but they’re not there anymore. Instead, they’ve moved their business to Ireland where the tax is something like 12.5%. But when America cuts its tax rate to 20%, the company will come back and build new buildings and hire new workers.

 Now I know my mind’s been clouded by all those years of teaching and defending the teaching of critical thinking. But I don’t even need to use critical thinking to figure out that 12.5% is significantly less than 20%. So are the operators and stock holders of Johnson Controls, who moved the company from America because they wanted to go where the tax was lower, just not smart? If that’s not the case, why will they be bringing the company back to America?

 Maybe it’s just something about trickle down that I don’t understand.

 

2 thoughts on “Say, Buddy. Got time to explain something to me?

  1. No, it could be considered backwards economics, but it could also be straight line telegraphing. By saying you’ll still have to pay 7.5% more tax, but you’ll be happier here. Because,,, something else is so much better, therefore, at that price, doing business here suddenly becomes affordable. In order for that to be right, the economic environment in Ireland must be shuttering some sort of advancement. Is there more political opportunity in the US, to influence lawmakers, and build your own road? I’m guessing this is an invitation to say, you’ll pay 7.5% more in taxes, but with our current political state, that’ll buy you 10% more in profit. Can it be?

    • Gee, Jason. You sound a lot like your Uncle Jim, but your sentences make sense. Even so, I don’t think that’s what it is. I think it’s thumbing the nose at the rest of us. But that’s just me.

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