Sunday, August 7, 2011

The SP Downgrade of US Credit Rating

First of all, the S&P downgrade of US credit rating is only from AAA to AA+ - still a good credit rating, and one that is way above that of many other nations. But the S&P credit rating SHOULD awaken politicians to some very important truths.

The US government is taking in TOO LITTLE in tax income. It is only fair that people (and companies) who earn money PAY the bill. Everyone wants to enjoy the blessings of public service, and consequently paying the bill SHOULD be at the forefront of all governors, senators as well as governmental bodies.

When some states (e.g. Delaware) offer VERY LOW taxes, those taxes are used for speculative purposes. Establishing offshore companies where European companies create holding companies with hometown in a low percentage state is pure speculation. Not a single job is created by such speculation, and therefore there seems to be little reason to offer these bargain taxes. If there is ANY reason whatsoever, please add your comment. I would gladly hear from those who could explain the reason for wanting such holding companies to center their businesses without any job gains as far as I can see... :-)

One important element is that companies SHOULD pay taxes in the country where the money is earned. Equally applicable for all company sizes - small and big.

Likewise, it seems clear for all that you can't save money as a way to gain positive results. You need to get a proper state income for a nation to finance its way through the economic challenges ahead. It may not be popular to raise taxes, but given the fact that some high salary earners run speculative scams also, there might be a good reason to review tax laws - and this principle applies to many countries.

If I may include a principle from the world of religion, I will claim that the Ten Commandments are simple to remember - yet applicable to virtually all aspects of living. Why couldn't tax laws be just as simple?

It would bring in lots of tax money once the principle is understood, and that should be possible for Democrats and Republicans alike...

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