Redux: The Coming Corporate Raid On The U.S. Treasury

[marmar]

from the Working Life blog:




Redux: The Coming Corporate Raid On The U.S. Treasury

by Jonathan Tasini
Friday 28 of January, 2011

Got crabs? Cut corporate taxes. Can't get your kid to eat spinach? Cut corporate taxes. Worried your skin it too dry? Cut corporate taxes. And, then, of course, want the economy to be more "competitive" and "grow"? Cut corporate taxes. None of the above will be helped by cutting corporate taxes--but the reasons given for any of them carry the same validity and weight. Unfortunately, the thieves are backing up the corporate limos and landing the private jets as our elected officials stand ready to give away some more dough or promise not to collect a fair share.

From the president's State of the Union speech:

For example, over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries. Those with accountants or lawyers to work the system can end up paying no taxes at all. But all the rest are hit with one of the highest corporate tax rates in the world. It makes no sense, and it has to change.

So tonight, I’m asking Democrats and Republicans to simplify the system. Get rid of the loopholes. Level the playing field. And use the savings to lower the corporate tax rate for the first time in 25 years –- without adding to our deficit. It can be done.

He got the first part right: lobbyists have rigged the system. But, he is simply wrong when he implies that corporations based here pay higher rates than corporations based in other countries. The president is entitled to his opinion--but not to his own set of facts or misleading conclusions that continue to mislead the people about what corporations pay.

The Citizens for Tax Justice has the facts:

U.S. corporations pay a smaller percentage of their profits in taxes than do corporations based in other developed nations. Corporate leaders and anti-tax politicians often point to the top statutory corporate tax rate in the U.S. — 35 percent — which is higher than that of most other countries. But because there are so many deductions, credits and other special breaks in our corporate income tax, the effective tax rate for U.S. corporations is actually relatively low.

In 2007, a report from the Bush Treasury found that "the United States takes a below-average share of corporate income in taxes." The report found that, over the 2000-2005 period, U.S. corporations paid 13.4 percent of their profits in corporate income taxes, while the corporations of the other countries in the Organization of Economic Cooperation and Development (OECD) paid 16.1 percent of their profits in corporate income taxes.

And by connecting corporate taxes to the idea that lower taxes will help the economy, the president mislead the country, as CTJ points out:

Low taxes do not make a nation competitive or business-friendly. Are low corporate taxes the key to a growing economy? No. Much more important are a well-educated workforce, a robust infrastructure, economic and legal stability and many other things that can only be provided if the U.S. collects adequate tax revenue from corporations and others who profit the most from these public investments.

In other words, even if the effective tax rate for U.S. corporations was higher than the effective tax rate for the corporations of other countries (which it’s not), that would tell us very little about how competitive or business-friendly the U.S. is.(emphasis added)

I don't want to quibble with CTJ's assertion about education because I think that's a sideshow to the war against wages underway no matter how educated you are. But, the basic point is right: lower corporate tax rates tell us very little about whether an economy is growing...and, more important, whether the PEOPLE are getting their fair share of the expanded wealth in the country.

We can't let corporate America raid the Treasury again. The CEOs have taken, taken, taken and have no limit to their avarice--all geared towards building up profits so they can pay themselves extravagant salaries and take up stupendous pensions--while leading the charge against tiny pensions given to public workers.


http://www.workinglife.org/blogs/view_post.php?content_id=15090

[DeSwiss]

1. K&R

[Bonhomme Richard]

2. Who are we kidding? Big business is the largest social program...

we have.

[Hannah Bell]

3. +100.

[Hydra]

5. I know, scary, isn't it?

All of these "self made people" who can't exist without the biggest gov't welfare program imaginable.

Some of those people happily live here at DU and claim "Private industry!!!"

[Enthusiast]

4. K&R nt