So often you hear business leaders complain that businesses would be more likely to invest in America if only our taxes weren't so high. Many are calling for lowing the taxes on corporations to 0% and then that will somehow incentivize the corporations to invest more in jobs in America. Let me present a plan where that could possibly be true...
We should only tax corporations whose net imports are greater than their net exports. The greater their contribution to the trade imbalance, the greater would be their taxes. For example, a company like Wal-mart uses cheap labor overseas, as well as overseas materials. They import 90+% of their products and then resell them to Americans. They may create some jobs but their employees do not enjoy high wages, because their business model is based on the arbitrage of cheap labor and materials overseas. There are actually more jobs being created overseas than here in America.
On the other hand, small businesses are struggling. Many of them are very much local from the small grocery that specializes in local foods, to the dry cleaner that cleans your clothes, the Auto mechanic shop that sells mostly their hard labor. Businesses like this would pay zero cororate income taxes.
It might even become worthwhile for businesses to be created that were destroyed in recent years. Textile plants that use American cotton and wool would pay no taxes. Furniture plants that use American lumber would pay no taxes, though they might have to pay a lease on government land if they are not using their own land. Existing businesses would be encouraged to make sure they are not importing more than they are exporting to avoid paying the taxes.
There might be certain threshholds. For example, if the percentage of products that are imported is greater than 30%, there is a 10% tax, and at 50% there is a 25% tax, and about 70% there is a 40% tax.
Overall, such a tax structure would see to it that companies are more selective about what they import, and that American small businesses get the help they need to thrive and compete in the World market place. Additionally, with larger corporations having to reduce imports to avoid hitting threshholds, it would open up opportunities to smaller businesses that could import and compete with the larger corporations.
If you like this idea, I hope you will share it, and also you comments are welcomed below.