Kerby Anderson

Although candidates have been talking about jobs and raising wages, they haven’t done as well talking about how they will accomplish that. John Goodman and Laurence Kotlikoff have looked at the economic proposals put forth by the campaigns and found one policy change that would make a real difference. Donald Trump’s campaign has a policy paper that has the potential of increasing the income of the average family by an estimated $4,000 within the next four years. Here’s the surprise. The policy change has nothing to do with immigration or even foreign trade. The issue is corporate taxation. The United States has one of the highest corporate income tax rates in the world. But the tax rate doesn’t actually raise that much money because of deductions and exemptions used by corporations. It has had the effect of driving jobs and capital overseas. The Trump proposal isn’t something he talks about very much. In fact, you have to dig into the policy papers on the website to even see his proposal of replacing the current corporate income tax rate with a simple, 15 percent flat tax on corporate profits. Boston University economist Laurence Kotlikoff says this policy change will do three important things. First it would lead to an enormous flow of capital back into the United States. Second, it won’t cost anything in terms of lost government revenue because the loopholes will be gone and the tax base will be broadened. Third, the American people will be the beneficiaries of this policy change. You don’t have to know much about economics or foreign trade to see the benefit of this policy. About $2 trillion of untaxed earnings are sitting off shore. Lowering the corporate income tax rate will result in a massive influx of money into the American economy. Not only will money flow into the country, but jobs and companies will flow back into this country as well. This is one policy change that will actually raise wages.