There is no incentive for companies to invest. There is no incentive for companies to pay employees more. There is no incentive for companies to return cash to shareholder.
Until you change the incentives within the system you will not gain any of the goals you are seeking. Taxes are a dis-incentive (Laffer). You tax things that you do not want. That said consumers are not going to spend more if you drop sales taxes because they aren't paid enough to increase spending.
You need to start with the legal system. Japan has to have a more reasonable bankruptcy system. Without this you will never get new business development. Japan is way behind the rest of the world in many ways because too few companies are started.
Banking regulations have to change drastically. You have to promote earnings and risk taking at banks. If you are a loan officer and the company you are lending to goes bankrupt -- the banker's career is ended.
The pension system is owned and operated by the government. They are not risk takers. Returns for the funds is no longer the top priority of the fund managers. You are more likely to lose the business (as a manager) if you don't focus on ESG than is you lose money for the pension. This is stupid and means that there is no incentive for the largest investors to focus on earnings they are forced to focus on ESG. Note there is no good source of information on ESG.
How do you change Japan from a worker mentality to a owner mentality? Without this you will get nowhere.
By the way, Reagan's tax strategy came from President Kennedy... not Mr. Laffer.
First, why would you look at pre-tax profits from "non-financial" companies? I believe the financials pay the same tax rates as other companies. You are skewing the data from the start.
Second, there is no evidence that your plan would be revenue neutral. The great Art Laffer has stated (correctly) you tax things you don't want. If you want to limit consumption -- tax consumption. If you don't want corporate profits -- tax corporate profits.
Lowering corporate taxes encourages business expansion. It makes companies more competitive internationally. Increasing corporate taxes could be a disaster.
There is zero evidence backing your statement that corporate tax revenues would have increased if tax rates had remained at 50%. It is completely possible that revenues would have fallen because the onerous tax rates reduced the earnings of companies. Also, having the highest corporate tax rates in the developed world invites companies to do everything they can to move earnings off shore.
Businesses are very dynamic. You can't use cherry picked numbers and static analysis. You could be right, but it is highly unlikely.
There is no incentive for companies to invest. There is no incentive for companies to pay employees more. There is no incentive for companies to return cash to shareholder.
Until you change the incentives within the system you will not gain any of the goals you are seeking. Taxes are a dis-incentive (Laffer). You tax things that you do not want. That said consumers are not going to spend more if you drop sales taxes because they aren't paid enough to increase spending.
You need to start with the legal system. Japan has to have a more reasonable bankruptcy system. Without this you will never get new business development. Japan is way behind the rest of the world in many ways because too few companies are started.
Banking regulations have to change drastically. You have to promote earnings and risk taking at banks. If you are a loan officer and the company you are lending to goes bankrupt -- the banker's career is ended.
The pension system is owned and operated by the government. They are not risk takers. Returns for the funds is no longer the top priority of the fund managers. You are more likely to lose the business (as a manager) if you don't focus on ESG than is you lose money for the pension. This is stupid and means that there is no incentive for the largest investors to focus on earnings they are forced to focus on ESG. Note there is no good source of information on ESG.
How do you change Japan from a worker mentality to a owner mentality? Without this you will get nowhere.
By the way, Reagan's tax strategy came from President Kennedy... not Mr. Laffer.
First, why would you look at pre-tax profits from "non-financial" companies? I believe the financials pay the same tax rates as other companies. You are skewing the data from the start.
Second, there is no evidence that your plan would be revenue neutral. The great Art Laffer has stated (correctly) you tax things you don't want. If you want to limit consumption -- tax consumption. If you don't want corporate profits -- tax corporate profits.
Lowering corporate taxes encourages business expansion. It makes companies more competitive internationally. Increasing corporate taxes could be a disaster.
There is zero evidence backing your statement that corporate tax revenues would have increased if tax rates had remained at 50%. It is completely possible that revenues would have fallen because the onerous tax rates reduced the earnings of companies. Also, having the highest corporate tax rates in the developed world invites companies to do everything they can to move earnings off shore.
Businesses are very dynamic. You can't use cherry picked numbers and static analysis. You could be right, but it is highly unlikely.