While we're all focused on the supposed coming of Chinese economic hegemony, we might want to take a glance at Japan. They may have just discovered our secret sauce (via Bloomberg, bold is mine):
Much of the focus in Asia's biggest economy has been on raising sales taxes from 5 percent to help the government pay for swelling welfare costs. That may be eclipsed by an increasingly vocal movement favoring lower corporate taxes. Foreigners have long decried Japan's tax system as ambivalent toward their investments. And the tax structure favors established corporate behemoths at the expense of start-ups. Some tax-policy tweaking could be just the thing to catalyze economic growth, investment and job creation.... " Even if tax revenue falls in the near term, a tax cut may help revitalize business activity and eventually lead to a rebound in tax receipts, Shoichi Nakagawa, a lower house legislator who until August 2007 was policy chief for the ruling Liberal Demo cratic Party, said last week. Nakagawa recommends lowering the level to about 30 percent from 40.7 percent, the highest among Organization for Economic Cooperation and Development nations.
Me: So we might just end up with the highest corporate tax rate in the world, with 70 percent of the burden falling on workers by means of lower wages. That's really great. I can see we're serious about competing with Rising Asia. Maybe we'll all escape into our giant flat-screens that we can buy with another round of fiscal stimulus paid for by a windfall tax on corporations.