Economic Idea 2: Corporate flat tax - Tax companies 2% on their revenues instead of 21% on their profits - Produce 50 million jobs in 5 years time - Produce $500 billion per year of new tax revenues

This is my supergreat corporate tax reform idea, which is republican, an election promise for President Trump.

This genius idea is based on the Belgian diamond sector. There are no profits reported by diamond companies (buying and selling prices of diamonds are secret). So the Belgian government decided to tax them 2% on their revenues.

My idea is to find out if a corporate tax on revenues is better than a corporate tax on profits.

And yes it is!

1. Companies pay a corporate tax on their revenues, both small, medium-sized and big corporations. There is no possibility anymore to do tax evasion. Big companies usually pay 0% corporate taxes by implementing many tax loopholes and tax shelters and by shifting profits overseas, like with transfer pricing. This comes to an end. Big companies will pay a fair amount of tax of 2% on their revenues.

2. All the domestic and offshore tax loopholes and tax shelters are closed. This tax reform is super transparant. Not a single company can avoid or evade paying their corporate taxes as the revenues of companies is known, both US generated revenues as well as foreign generated revenues for international companies.

3. Self employed people and small companies pay only 2% of their revenues as corporate tax. If they make $100,000 profit on $200,000 of revenues, they pay 21% now or $21,000 in taxes, instead they pay 2% on $200,000 revenues, so only $4,000. So they pay 5x times less taxes on average! These are enormous savings for companies. Especially for small and mid-sized companies, those that produce most job creation.

4. Small and mid-sized companies pay less corporate taxes so they can grow 10-20% faster each year, also employing 10% more employees each year. They can reinvest the money they save on corporate taxes. This produces up to 50 million more jobs in 5 years time and $500 billion in more tax revenues per year in 5 years time, on top of the $300 billion per year collected from the 2% corporate tax on revenues!

5. The accountancy of companies is fully transparant. There is no way they can reduce their taxes by reducing their profits, tax breaks are over, but tax credits remain for companies. A tax on revenues makes it easy for accountants to calculate the corporate tax bill, compared to complex accounting rules for taxing profits.

6. International companies and investors will come to the United States, where they pay the least amount of corporate taxes worldwide and millions of Americans and foreigners start a company in the United States. We have 10% more GDP growth per year, also due to corporate growth and job creation at 10-20% per year. Americans don't need to fear anymore the complications of running complex accounting for their company and they don't need to fear paying corporate taxes anymore, many Americans start their own company, whereas in the past, they found incorporating risky business.

7. Chances of companies going bankrupt is much lower, the corporate tax bill is 5x cheaper on average. This also saves us millions of jobs over 5 years time.

8. Previously, it was impossible for the US government to pass bills to close all the corporate tax loopholes and tax shelters, and offshore transfer pricing techniques. With a corporate tax on revenues, we will collect the proper amount of tax and we will close all these corporate tax loopholes and tax shelters once and for all with only one government bill! Corporate tax evasion or corporate tax avoidance also becomes impossible!

9. International American companies will only pay American corporate tax of 2% of their revenues on domestic, American-earned revenues, whereas nowadays, they shift trillions of dollars of American profits overseas (and ship millions of American jobs overseas) to low-tax countries, they will keep their profits in the United States now. This fits into the America First policy of President Trump.

10. During times of an economic recession, the US government can decide to budget-wise lower the corporate tax rate on revenues from 2% to 1% or even to 0%, then corporate America will be briefly tax-free! So we save $100rds of billions per year from not losing jobs. So we exit a recession in 1-2 years instead of 4-8 years time. We thus have a new tool to steer the economy during times of a recession aside from only depending on lowering central bank interest rates.

11. International companies will move their headquarters to the US, where they are taxed the lowest, we have reverse corporate inversions, producing millions of new American jobs per year. These companies have also access to the American stock markets for massive growth.

12. Companies save $1,000ds, if not $10,000ds on legal fees to prepare their corporate tax return with their tax attorney. Some companies spend millions of dollars to create and setup tax shelters and tax loopholes to reduce their corporate tax on profits, with a tax on revenues of 2%, tax attorneys need to spend only a couple hours to a couple days to calculate the estimated taxes and claim the necessary corporate tax credits, instead of days or weeks to prepare the tax return. Also, companies save money on administrative hours to assemble the corporate receipts and invoice details, with a tax on revenues, they don't need to take care of this administrative burden anymore.

13. It could be that a 2% tax on corporate revenues yields $600 billion per year in tax revenues for the United States, instead of the $300 billion per year necessary. Then we instantly have a $300 billion per year surplus. Governments need to calculate a 2% corporate tax on revenues for all domestic revenues of companies, and the result may be surprising!

14. As companies grow, faster than GDP growth, the tax revenues on a corporate tax on revenues instead of a corporate tax on profits will yield much higher revenues each year, even during times of an economic recession, the corporate tax on revenues is recession-proof to guarantee tax revenues for the government. So if this year, this tax yields $600 billion per year in government revenues, next year it may yield 10% more or $660 billion per year in government tax revenues.

15. It results in a simplification of the corporate tax code, easier to calculate and to implement, also government tax officers can easily calculate the corporate tax of companies and needs to do no controlling, no checking or auditing of companies on tax evasion. So they will not come by anymore to visit companies to check if they are doing tax evasion or not, unless companies deliberately under-report their corporate revenues, which is hard to do.

End result?

We produce 50 million more jobs in 5 years time and $500 billion per year of more tax revenues due to job creation and due to a GDP growth acceleration of 10% per year (companies grow 10-20% faster per year also creating jobs faster)

The United States can become the frontrunner of this capitalistic republican corporate tax reform, taxing US companies on their revenues instead of taxing US companies on their profits. We write history in corporate tax reform! The corporate flat tax is born.


Write to President Trump so he proposes this idea as an election promise for the 2020 presidential elections!

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