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Overtaxing Business Kills Jobs

Recorded on April 2, 2012

From The Heritage Foundation, I'm Ernest Istook.

Big companies often make big profits. Yet their profit margins may be the same--or even less--than for a smaller business. But because a big outfit has more transactions, its income accumulates even though the percent of profit might be small.

What's really big is our corporate tax rate—our 39.2 percent federal and state rate is the highest in the world. Still, some complain that companies don't pay "their fair share,” while half the people in the U.S. pay no federal income tax.

Some scream that companies should not create jobs overseas. But selling things overseas earns profits they can bring back to the U.S. But if they bring the profits home, they pay extra-high taxes. That gives them incentives to re-invest overseas instead of America.

You attract more flies with honey than with vinegar. And you attract more jobs if you sweeten the tax incentives.

From The Heritage Foundation, I'm Ernest Istook.