Skip to comments.My Proposal for Employee Housing Cost-Based Federal Corporate Tax Rates
Posted on 12/10/2019 12:25:45 PM PST by Brian Griffin
Right now the federal corporate tax is the same whether a corporation operates in high housing cost Silicon Valley or low housing cost Albany, Georgia.
I would set the federal corporate rate tax to an employee housing cost calculation divided by an inflation indexing divisor, rounded up to the nearest 1%.
To keep corporations from dashing out of Silicon Valley and New York City, the rate would be bounded to within 1% of the standard federal corporate rate tax in 2021 and the bounds would be expanded by 1% in each of the following four years. In five years the federal corporate tax rate would vary from say 16% to 26%.
The employee housing cost calculation for a corporation would be based on the HUD fair market rate for a one-bedroom apartment in the zip code area with the most employees of the corporation for tax withholding purposes as of the last payday of the corporate tax year. Other employee housing cost calculations are possible and might be allowed.
The inflation indexing divisor might start at 60 for 2021 and increase by 1 each year to adjust for inflation.
In 2026, if the HUD fair market rate for a one-bedroom apartment in Cheapsburg was $1,040/year, the federal corporate tax rate for Cheapsburg corporations would be 16%.
In 2026, if the HUD fair market rate for a one-bedroom apartment in Expensive City was $2,500/year, the federal corporate tax rate for Expensive City corporations would be 26%.
This system would hold down and eventually lower housing prices and rents in expensive areas. New startups would still cherish Silicon Valley and NYC and wouldn't care about the federal corporate tax rate since they would expect to lose money for a few years.
Decreases in HUD fair market rental rates and HUD payouts would pretty much pay for the corporate tax reductions.
You can’t screw with supply and demand and not mess something up.
If you can’t afford city housing, don’t live there. When enough people don’t live there, housing becomes cheaper. If you’re some kind of idiot that just HAS to live in a city, then pay that sucker tax of high-priced housing.
“Decreases in HUD fair market rental rates and HUD payouts would pretty much pay for the corporate tax reductions.”
It takes a communist to think tax breaks must be “paid for”. Sorry, it is not your money in the first place, so stop acting like it.
Oh, boy, another lame “proposal” for big government to fix everything!
So it’s just too bad for the property owners whose values are reduced by this tax manipulation, and oh happy day for the ones elsewhere who benefit. Fair and constitutional thing is to have the same tax rates for all, not play winners and losers with the tax code and real estate values — too much of that already.
You could call it The Federal Tax Accountants Full Employment Act of 2019.
To keep corporations from dashing out of Silicon Valley and New York City,
Why should normal people and companies subsidize profligate CA & NY idiocy??
Democrat politicians in California and New York are already doing a fine job of driving out business creators. Look at the population figures for CA and NY.
Why? Why is there a need for federal tax intervention with regard to housing costs in various areas?
High housing costs are a problem in some areas of the country. But is it really the business of the federal government, through the tax code, to try to alleviate such problems?
Why in the F would you even want to do this?
Somebody got way too much time on their hands
Two monkeys, six and a half minutes.
Sorry, we need a lot less government, a lot less government regulation, and a lot less government taxation. My counter-proposal for helping the economy and saving the country is to just fire 75% of all federal employees.
This in definitely taking the story on a tangent, but:
The only reason housing might not cost much in Albany Georgia is because of the neighbors, and their tendency to destroy everything around them. No corporation in their right mind moves to Albany Georgia. Once they look at the schools, the outrageous cost of medical facilities, the crime rate, and the likely pool of employees, housing doesn’t even figure into the equation. Cooper Tire pulled out partly because of the quality of their employees at that plant compared to their other facilities. P&G routinely talks about how Phoebe Putney’s (the local hospital conglomerate that eats up all the competition through bribes to state officials) costs are higher than any other market where they have a plant.
Houses and apartments are quite a bit higher in Lee County, but I expect that to change as the residents of Dougherty County march north.
“Why is there a need for federal tax intervention with regard to housing costs in various areas?”
Housing costs are probably the leading cause of poverty in the USA.
“The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;”
Taxes don’t have to be uniform throughout the US.
Why should we subsidize housing in CA NY? Why should the taxpayer try to keep a company from moving from same? Nope, nope.
“So its just too bad for the property owners whose values are reduced by this tax manipulation”
LA, SF, DC and NYC property values aren’t held up by market forces.
Every person I still know in the DC area gets governmental rental help.
I once met a woman here in Venice, Florida looking for a place to rent that would take her subsidy money. She had a choice of housing that was surprisingly broad.
Vaguely reminds me of an old Tennessee Ernie Ford song: “I Owe My Soul to the Company Store”.
Yes, I am THAT old! Lol
How do housing costs cause poverty?
“High housing costs are a problem in some areas of the country. But is it really the business of the federal government, through the tax code, to try to alleviate such problems?”
The federal government has been at it for over 80 years.
Congress creates power for itself by manipulating tax rates and exceptions to effect the economy and reward special interests, who like to design tax relief around their unique circumstances to stymie competition. We have a nefarious system that is not at all what the Founders intended. The last thing I would want is more of it.
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