How America was Tricked on Tax Policy. Bret N. Bogenschneider

Hammer, The Helmsleys: The Rise and Fall of Harry & Leona (New York: NAL Books, 1990).

5Matt Egan, Just 4% of Companies Boosted Hiring Because of Tax Cuts, CNN Business (Jan. 29, 2019) https://www.cnn.com/2019/01/28/business/tax-cuts-jobs-business-spending-nabe/index.html. Accessed Nov. 10, 2019 (“The expensive 2017 tax law failed to encourage Corporate America to embark on a boom in hiring or job-creating investment. Just 4% of business economists say their companies accelerated hiring because of the tax overhaul, according to a survey released Monday by the National Association for Business Economics.”). And only 10% of business economists said their firms stepped up investments like building factories, buying equipment and purchasing software because of the tax law.

6Data are available on the relation between tax base and GDP per capita. See Organization for Economic Cooperation and Development (OECD), http://www.oecd.org/tax/revenue-statistics-2522770x.htm; World Bank Data on GDP Levels Per Capita https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?view=chart. I have previously compiled and published charts to illustrate the lack of any correlation between tax cuts and GDP per capita. See, e.g., Bret N. Bogenschneider, Causation, Science & Taxation, 10:1 Elon L. Rev. 1 (2017); Bret N. Bogenschneider, The Tax Paradox of Capital Investment, 33:1 J. Taxation of Inv. 59, 79 (2015).

7Bret Bogenschneider & Ruth Heilmeier, Income Elasticity and Inequality, 5:1 Int. J. Econ. & Bus. Law 34 (2016).

8Switzerland has a federal tax, a cantonal tax and some municipal taxes, which when combined are relatively low. For an explanation and tax rates on the individual tax system in Swiss localities, see Federal Government of Switzerland, The Swiss Tax System (Dec. 2018), https://www.efd.admin.ch/efd/en/home/themen/steuern/steuern-national/the-swiss-tax-system/fb-schweizer-steuersystem.html. Accessed Nov. 10, 2019.

9An interesting illustration is the deceased multimillionaire, Jeffrey Epstein, who was once a scion of the investment banking scene. See generally, Greg Norman, Jeffrey Epstein’s Private Caribbean Island Had Mysterious Safe, Former Employee Claims, Fox News (July 12, 2019), https://www.foxnews.com/us/jeffrey-epstein-caribbean-island-mystery. Accessed Nov. 10, 2019. Obviously, Epstein’s capital investments into his various sex palaces in the Caribbean and New York City were not efficient investments for broader society.

10St. Louis Federal Reserve, Why Are Corporations Holding So Much Cash? (Jan. 1, 2013), https://www.stlouisfed.org/publications/regional-economist/january-2013/why-are-corporations-holding-so-much-cash. Accessed Nov. 10, 2019.

11See Jeffry Bartash, Repatriated Profits Total $465 Billion After Trump Tax Cuts, Leaving $2.5 Trillion Overseas, MarketWatch (Sept. 19, 2018), http://www.marketwatch.com/story/repatriated-profits-total-nearly-500-billion-after-trump-tax-cuts-2018-09-19. Accessed Nov. 10, 2019.

12For a general discussion of this idea, see: Benjamin Willis, Fool Me Twice: Trump’s Payroll Tax Cuts, Tax Notes (Aug. 22, 2019) (“On August 20 President Trump said regarding tax cuts that the ‘payroll tax is something that we think about, and a lot of people would like to see that, and that very much affects the workers of our country.’ Such a strategy is based on the economic belief that reducing taxes on low- and middle-income Americans is the best way to ensure that consumers continue spending money and the economy is stimulated.”), https://www.taxnotes.com/opinions/fool-me-twice-trumps-payroll-tax-cuts/2019/08/22/29vv7. Accessed Nov. 10, 2019.

13Robert Frank, Top 1% Pay Nearly Half of Federal Income Taxes, CNBC (Apr. 14, 2015), https://www.cnbc.com/2015/04/13/top-1-pay-nearly-half-of-federal-income-taxes.html, citing Tax Policy Center, https://www.taxpolicycenter.org/research-commentary. Accessed Nov. 10, 2019

14See, e.g., Stephen Moore, Do the Rich Pay Their Fair Share?, Heritage Foundation (Mar. 3, 2015), https://www.heritage.org/budget-and-spending/commentary/do-the-rich-pay-their-fair-share. Accessed Nov. 10, 2019 (“Suppose there were a banquet for 100 people and at the end of the night it was time to split the bill of $50 per person. If that bill were paid for the way we pay our income taxes, here is how it would work. Those in the top half of income would pay roughly $97 each and those in the bottom half of the income would pay an average of $3 each. Almost 40 people would pay nothing.”); Adam Michel, The New York Times Is Wrong. The Rich Pay More Taxes Than You Do. The Heritage Foundation (Oct. 15, 2019), https://www.heritage.org/taxes/commentary/the-new-york-times-wrong-the-rich-pay-more-taxes-you-do. Accessed Nov. 10, 2019.

15For an illustration of this method in the news media, see Michael R. Strain, The Rich Really Do Pay Higher Taxes Than You, Bloomberg Opinion (Oct. 10, 2019), https://www.bloombergquint.com/gadfly/the-rich-really-do-pay-higher-taxes-than-you (“This is half the story. When assessing the progressivity of the U.S. Federal system, it makes sense to look at both taxes and the means-tested transfer payments—Medicaid, Food stamps and Supplemental Security Income—that those taxes fund. If you subtract these payments from federal taxes paid.”) (emphasis added).

16See Council on Foreign Relations, U.S. Corporate Tax Reform (Nov. 3, 2017), https://www.cfr.org/backgrounder/us-corporate-tax-reform. Accessed Nov. 10, 2019.

17See Brian Spilker et al. Taxation of Individuals and Business Entities (New York: McGraw Hill, 2020), at 1–9.

18See Bret Bogenschneider, The Effective Tax Rates of U.S. Firms with Permanent Deferral, 145 Tax Notes 1391 (2015).

19Megan Cerullo, 60 of America’s Biggest