Liberal politicians love jobs, but they don't seem to favor the profits that finance jobs. It doesn't take long to think of politicians who rail against excessively profitable companies, yet it is these very same firms that create jobs with their profits.
During the 2000 election, Al Gore continuously attacked drug companies, insurance companies, oil companies and others for "excess profits." Taking a cue from Gore populism, Howard Dean not only wants to break up big media companies, he never has a good word for business.
To Dean, the corrupt Enron symbolizes business. And as the election cycle heats up, it often seems like he's running against Halliburton, rather than for the great American business sector. Yet Halliburton is a good and clean company. Its biggest problem is frivolous asbestos lawsuits, a tort attack that nearly bankrupted the company and would have destroyed tens of thousands of jobs. Ever hear Howard Dean call for limited lawsuit tort reform? Don't hold your breath.
Corporate profits are a vital form of capital, and capital is the key ingredient in capitalism. If the latter is to work and expand prosperity, then the former must be saved. In fact, corporate profits shouldn't be taxed at all.
It would be much better to abolish the corporate tax code, along with all of its special-preference complexities that reward political lobbying rather than work effort or entrepreneurial investment. The taxation of corporate capital gains and paid dividends should similarly be abolished. Company investments should be cash-expensed immediately in the first year.
In place of today's cumbersome corporate tax code, why not institute a simple flat tax on corporate sales revenues? Taxing business consumption is a much better idea than taxing business saving and investment. And a business-revenue tax would be much less volatile for government budget purposes.
Profits are the seed corn of economic growth. Eliminating the tax burden on profits will reap a record harvest of jobs and prosperity.