US Corporate Tax

In this article, Martin Feldstein gives few key points of problems with higher US corporate taxes.  Higher taxes causes
- a shift of capital to sectors such as, housing where there are tax benefits
- companies tend to raise capital more with debt than equity
- less foreign capital flowing into US for corporate investments

Even foreign income by US corporates are taxed in a manner that puts US companies at a disadvantage relative to other countries.  Income is taxed at a rate equal to difference of US tax rate and foreign country rate.  End result is - companies prefer not to bring in foreign income into US but use it in the foreign country itself.

This is quite interesting - come to think of it - in India, where I grew up, under the protectionist era - restrictive policies were used on foreign companies to prevent capital from flowing out.  Seems like US tax policy is quite the reverse - or as they in DC - an "unintended consequence"