By Tim Worstall, Contributor President Obama is giving a speech today in which he’ll propose a grand bargain to get America  working again. Sounds like a good idea so what’s the meat of it? Amazingly, it seems that the President is going to propose lowering business taxation while at the same time raising the amount of revenue coming from business taxation. Now if this was with reference to the Laffer Curve or one of the other theories about the undesirability of corporate and capital taxation in general (such as those of the Nobel Laureate Sir John Mirrlees) then it might not only be a plan but a good one. Unfortunately that doesn’t seem to be what is on offer. Obama long has called for a cut in corporate tax rates, but previously insisted such business tax reform be coupled with an individual tax overhaul. He’s dropping that demand and says instead that he’s open to the corporate tax cut that that businesses crave. OK, cutting the corporate tax rate, that’s a good idea. The statutory rate in the US is well above world and OECD average and can, depending upon how you want to look at it, be described as the world’s highest. But he wants it to be coupled with a significant investment on some sort of job creation program, such as manufacturing, infrastructure or community colleges. That will of course require some new amount of revenue. And even those various theories that say that a low or lower corporate tax rate will indeed grow the economy faster, thus in time producing higher tax revenue, those theories do say that this will take some time. So, in the short term, where are those extra revenues going to come from? The officials said money to pay for the jobs creation would come from a one-time revenue boost from measures such as changing depreciation rules or having a one-time fee on earnings held overseas. Either or both of those mean business paying more in tax than they do currently. And the extra “one-time boost” to revenues will necessarily be the extra amount that businesses will be paying in the future under this new proposal. …read more

Source: FULL ARTICLE at Forbes Latest