Current issue in global business - Essay Example

In 2008, one of the most severe financial crises since the Great Depression struck. Banks had been lending money recklessly for several years and this led to a serious asset bubble. To make things worse, many of the people who borrowed money were completely unable to pay off their debts as they became due. Banks and businesses collapsed. Millions of people were laid off. Credit dried up, making it very hard to borrow money and allow companies to begin the rebuilding process. Throughout these problems, corporate taxes remained high in most developed countries.

In Canada, they were reduced somewhat, with an eye towards encouraging business opportunities (Vieira). Elsewhere, however, they remain high and continue to limit the amount of jobs that can be created and the economic re-bound that is desperately required to restore western economies to a level comparable to pre-2008. This is an issue for everyone who cares about global stability and economic growth. The backbone of our economies are our corporations, be they small family-owned businesses are huge multi-national companies.

We need to work hard to create environments in which they can thrive and hire employees. There are those who would wish to raise corporate tax rates and effectively stifle growth. . They wish to see Ireland's advantage wiped out completely. Ireland has been forced to accept a massive bailout from the EU and so far has managed to keep its tax rate, a point of national pride, but only after great duress was brought to bear on its government by countries such as France, which have a high corporate tax rate and don't like Ireland's competitive tax advantage (EU Business).

When countries squabble like this, it is businesses that lose out. This kind of instability is anathema to good business. They have a very difficult time planning long-term when they are not sure what the tax rate will be a few years down the line. Stability is key in these kinds of situations. Some say that lowering corporate tax rates is the wrong policy. It involves giving extra cash to those who need it less. They suggest it makes more sense to give money to education programs and needy families.

But they miss the point. Lowering corporate taxes jump-starts business. It allows companies to hire more people. Businesses form the cornerstone of the economy. We should not punish them with high taxes. Of all countries in the world, it is most surprising to learn that the United States has one of the highest tax rates in the world. Despite the fact that it is often seen as a champion of business, it makes life very difficult for them. Even Republicans see fit to attack business when they talk about putatively lowering taxes.

A recent article discusses the opinion of Eric Cantor, the majority Republican leader in the House: As a first step toward that wider overhaul, Mr. Cantor said he supports allowing U.S. multinational corporations to bring nearly $1.2 trillion in profits derived from foreign operations onshore at a temporary lower tax rate, in a bid to