Other firms trading in the Territory must pay a standard 35 per cent tax on their profits.

5. The Turks and Caicos Islands levies no income tax, capital gains tax or sales tax.

The Corporate Tax Conundrum

Of course, taxation of financial firms profits and bonuses should be made more similar to that of other economic activities.

These companies pay a fixed annual tax, irrespective of profits made and whether or not their profits are received in the Territory.

Not just rule so that big companies can make a bigger profit.

Personal income tax would be reviewed, company tax breaks rationalized and basic goods exempted from VAT.

To begin with, several significant fiscal taxation reforms are now underway or in the pipeline, such as an increase in the collection of state owned companies dividends and a hike in the resource tax on industries such as oil and coal mining, in order to reduce corporate savings.

A lower corporate tax rate would weaken this justification. Moreover, pension funds, retirement plans, and non profit organizations, which receive about 50 of all corporate dividends, do not pay tax on these earnings, and would benefit from a lower corporate tax rate.

Recently, the IMF proposed a new global tax on financial institutions loosely in proportion to their size, as well as a tax on banks profits and bonuses.

But the Indian decision also means less money for the big multinational pharmaceutical companies.

The corporate tax rate is a flat 18 , one of the lowest in the world.

Meanwhile, corporate profits have soared. The GDP share of after tax corporate profits is at a nbsp record high, whereas labor compensation has plunged to its lowest share since 1950.

And the US financial sector, in greasing the wheels of the real economy, has been soaking up an astounding 30 of corporate profits and 10 of wages.

The combined profits of the key players in this market total 80 billion, which represents a massive tax on the real economy.

Most of the corporate profits came from financing consumer automobile loans through Ford Motor Credit Company.

They are afraid of affecting American companies apos profits from trade, mining and weapons sales in Indonesia.

Corporate profits are bursting at the seams of investors expectations in virtually every corner of the world.

On the contrary, almost every activity of government has an impact on corporate profits, and in turn, on the stock market.

Corporate profits are up. The economy is growing again.

Then there is the matter of security, which constitutes a huge tax on business in many parts of Mexico.

If you look over the past couple decades at the returns to capital in other words, corporate profits we see them going up, and we see that they're now at an all time high.

That had been accomplished by widening the tax base, improving administration efficiency, reducing corporate income tax, introducing a personal income tax of 10 per cent and keeping value added tax at 10 per cent.

The share of total profits of companies in the United States represented by financial firms rocketed from 10 in 1980 to 40 in 2006.

The Defense Dividend

We found that, during the 1990 2001 period, but not afterwards, the earning announcements of good governance firms were more likely to surprise both markets and analysts than the earning announcements of bad governance firms.

Both President Barack Obama s plan for business tax reform and the Simpson Bowles deficit reduction plan propose reducing such expenditures to pay for a reduction in the corporate tax rate.

The pre crisis profits of banks one third of all corporate profits appear to have been a mirage.

Such mechanisms could be financed from taxes on the profits of the corporations that controlled the markets for those commodities.

These revenue losses could be offset by curtailing so called corporate tax expenditures deductions, credits, and other special tax provisions that subsidize some economic activities while penalizing others and broadening the corporate tax base.

Corporations are allowed to deduct interest payments on bonds, but stock dividends are effectively taxed at the both the corporate and the individual level.

In a rapidly globalizing world, companies can no longer count on their home markets as a relatively secure source of profits.

As a consequence of the ensuing tax competition, corporate tax rates have fallen to 15 25 in most European countries.

According to conventional wisdom, the corporate tax burden is borne principally by the owners of capital in the form of lower returns.

A Scot!

Corporate profits are quite high in fact, if you include bank profits, they're higher than they've ever been.

Most countries that reduced their corporate tax rates have followed this path, while the US has done the opposite.

Instead, they have to pay a fixed annual tax set at a nominal amount of 225 to 300.

It has also driven up corporate savings, because firms earnings are growing faster than household income and (and, for that matter, faster than overall GDP).

Nor are the non poor faring particularly well, as wage growth has remained virtually flat for a very long time, even as corporate profits are booming.

And, as corporate profits have grown, those who share the capital gains in one way or another have also seen their incomes increase faster than the national average.

Instead of this dinosaur economy that focuses only on corporate profits, we want a new economy that puts safe products, happy people, and a healthy planet first.

An Inequality Tax

The same negative effect on the current account could occur if the corporate sector increases its rate of investment in plant and equipment or reduces corporate saving by paying higher wages or dividends.

It is time for an international tax on bank profits perhaps implemented as a levy on international financial transactions which would raise tens of billions of dollars each year.