"Where's their answer to this?"

A number of ideas over the past weeks have come together for me this morning-

In response to the letter I sent to my Senators opposing H.R. 1 a beloved cousin emailed me, "I’m not saying I disagree or agree with you when I ask this question…. But what would you suggest? I don’t really know what the right answer is at this point…"

The first line of my reply to her was, "Well, on numerous occasions in the past we've cut tax rates in an attempt to spur economic growth and every time that's been done the economy improved and net tax receipts increased, despite the lower rate of taxation."

Then the shamulus bill passed and a number of Republican governors, upon seeing the fine print, began suggesting they'd refuse the federal handouts. "Republican governors, as the last bastion of capitalist political power in this country, should implement a capitalist plan for job creation - eliminate the corporate income tax" I thought. By doing this in one or more states there would be a side-by-side comparison of capitalism versus government bailouts that would be difficult to ignore on the key statistics of job growth and state GDP growth.

But I wondered which states have a Republican governor AND a corporate income tax that could be axed?

This morning Tim Pawlenty and Mark Sanford appeared on Fox News Sunday with Ed Rendell and Jennifer Granholm to discuss the "stimulus" bill. Among other things, Sanford called The Big O's foreclosure plan "a horrible idea." Last week Sanford suggested that his state might "turn down stimulus money" from the feds. In that L.A. Times story real estate agent Joyce Rivas claimed to have voted for Sanford twice but was angered by his "threat." Rivas asked, "For starters, where's their answer to this?"

In a quick search I found that Governor Sanford proposed, last December, elimination of the 5% South Carolina corporate income tax.

Lawmakers and observers said eliminating corporate income tax is an interesting idea, but want to hear more details.

(...)

South Carolina could join four other states, Nevada, South Dakota, Washington and Wyoming, with no corporate income tax, Sanford said. South Carolina collects about $300 million in corporate income taxes annually, far less than sales and individual income tax collections.

“We’ve got to get away from this piecemeal approach to jobs incentives,” Sanford said in a written statement. “We believe a better approach would be to simply lower the overall tax rate for corporations, so that we’re not only giving companies a good deal when they decide to locate here but we’re giving them a reason to stay and expand.”

There you are, Ms. Rivas. That is our answer.

For reference: Tax Foundation's 'State Business Tax Climate Index Rankings' Maryland... ouch!

111th Congress Economics and Markets From the other side Obama Administration Posted by JohnGalt at February 22, 2009 3:22 PM