Corporate Tax Breaks: Dead Wrong

Leo Toribio

Leo Toribio Pittsburgh, Pa.

An article by Laurence Kotlikoff in the NYT suggests that income taxes for corporations should be abolished and that would produce more jobs.

The author claims to have developed a computer model that demonstrates his claim. But this wouldn't be the first time when a computer model was dead wrong! In fact, as more than one commenter noted, as corporate tax rates declined, so did employment. That clearly points to a problem with the model. Was Professor Kotlikoff's model created by the same people who created Healthcare.gov?

Corporate income taxes are paid only on profits, not on every dollar of revenue. One way for a corporation to cut its income taxes would be to hire more workers, which would reduce its profits, ergo, reduce its income taxes.

The article also states that eliminating corporate income taxes would prevent jobs from being moved overseas, that if corporate income tax was eliminated more jobs would be created and the difference in federal revenue would be made up in personal income taxes paid. But the truth is, jobs are moved overseas to take advantage of cheaper labor and to increase profits, not to avoid taxes.

To make Prof. Kotlikoff's suggestion work, a tariff would have to be imposed on imported goods and that tariff would have to be high enough to make it more profitable to have those goods made by American workers. But that would contribute to inflation, not to domestic job growth. It would also create another "tariff war" around the world.

A more constructive approach is being taken by the OECD to eliminate countries known as "tax havens."

Professor Kotlikoff missed his true calling. He should have been a butcher. I don't know what he eats, but it appears that no matter what goes into his mouth, what comes out is baloney!

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Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

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There is Dignity in All Work

There is Dignity in All Work