Germany declares war! Reducing its corporate tax rate from 15% to 10%

Photo above - "Rick, after this is all over, Germany will be reducing its business tax to 10%. Perhaps you'd consider relocating your cafe' to Berlin?"

Half the people I meet (at least) believe that they will not be responsible for any part of America’s $37 trillion national debt. (That’s $100,000 per man, woman, and child) Their presumption is that because they personally pay little to nothing in federal income taxes, America will simply increase corporate taxes. Those are currently 21%. The uniformed paying zero personal taxes expect that corporations will “eat” the higher taxes, and NOT pass the cost onto us consumers through higher prices on merchandise. Bizarrely, they continue to cling to this fantasy after multiple rounds of Trump tariffs on all sorts of merchandise.

Okay, now the other shoe is dropping. Germany – the worlds 3rd largest economy after the US and China – is slashing corporate taxes from 15% to 10%.

Raise your hand if you don’t understand how this will encourage companies to abandon America and set up factories in Germany. Okay, a bunch of dropouts and Marxist have their hands up. Let’s move along.

Why does Germany (and much of the EU) have some of the lowest corporate taxes in the world? Other than luring American corporations, I mean?

Germany makes up the difference with sky high personal income tax rates. Their philosophy is that it’s much easier for a corporation to abandon a nation than it is for a middle-class family. The only families who migrate are either insanely wealthy gazillionaires, or the impoverished jobless seeking a fresh start in some place like the USA.

Most economists endorse this approach – don’t tax corporations to death, or they’ll either die, or migrate. If a nation is going to pass out entitlements to citizens like candy, then those entitlements possibly should be paid out of personal income taxes, so people will understand cause and effect. European citizens seem to grasp this concept more easily than the left wing of the US democrat party. And Europe is waaaay left of America.

Wait, it gets worse. Not only do corporations in America pay a federal income tax double that of Germany, they also pay state corporate income tax almost everywhere.

Go to the head of the class if you guessed that California has one of the highest corporate income tax rates – 9%. The total hit on a California company – federal and state combined – is at 30%. New Jersey, Illinois, and DC, come up the podium and get your runner up medals. You all have sky high corporate tax rates too.

What’s the point of this rant? Not to high-five Germany for its tax war against America. The problem for America isn’t so much the combined corporate and state tax rates. It’s that we’re in debt to the tune of $37 trillion even AFTER having some of the highest corporate and personal taxes on earth.

Thank your senators and congresspersons. They spent that money giving away EV rebates, experimental hydrogen factories to Exxon, buying absurdly expensive pentagon weapons, doling out crop price support – anything that might win them re-election or campaign contributions from single issue voters.

I’m just sayin’ . . .

Germany's new government launches a program to encourage investment and boost the economy