Respectfully submitted by Lawrence Rafferty (rafflaw)-Guest Blogger
While we have discussed the fairness of the taxes paid and not paid by large corporations in the past, the alleged high corporate tax rate is once again in the news. It seems that after contraception the Right’s most consistent accusation is that the corporate tax rate is way too high for corporations to compete in the world market. The facts seem to differ from those claims however.
“Corporations are lobbying for lower corporate rates and an exemption for profits they shift offshore. McIntyre, however, says “Our study provides proof that too many corporations are already being coddled by our tax system.” Findings in the report include:
The average effective tax rate for all 280 companies in the study over the three year period was 18.5 percent; for the period 2009-2010 it was 17.3 percent, less than half the statutory rate of 35 percent.
78 of the companies enjoyed at least one year in which their federal income tax was zero or less.
30 companies enjoyed a negative income tax rate over the entire three year period on their combined pre-tax profits of $160 billion.
Total tax subsidies given to all 280 profitable corporations amounted to $222.7 billion from 2008-2010.
Wells Fargo tops the list of 280 U.S. corporations receiving the most in tax subsidies, getting nearly $18 billion in tax breaks from the U.S. treasury in the last three years.
Pepco Holdings had the lowest effective tax rate of all the companies in the study, at negative 57.6 percent over the three year period.” Citizens for Tax Justice
If I understand those numbers correctly, large corporations are paying about half of the rate that they claim is too high. Another example of how little these corporations are paying was recently discussed in a Crooks and Liars article on General Electric. “General Electric is a prime example of this trend. Despite being highly profitable and subject to a theoretical tax rate of 35 percent, GE paid only a 11.3 percent tax rate in 2011. And that number was the most they paid in more than a decade. In 2010, they actually paid no taxes and got a net tax benefit of $3 billion. For the 10 year period prior to that, their effective average tax rate was 2.3 percent.” Cooks and Liars
Recently, President Obama proposed a reduction in the corporate tax rate to 28 percent for many corporations while claiming to reduce or eliminate many tax loopholes. “President Obama will ask Congress to scrub the corporate tax code of dozens of loopholes and subsidies to reduce the top rate to 28 percent, down from 35 percent, while giving preferences to manufacturers that would set their maximum effective rate at 25 percent, a senior administration official said on Tuesday. Mr. Obama also would establish a minimum tax on multinational corporations’ foreign earnings, the official said, to discourage “accounting games to shift profits abroad” or actual relocation of production overseas.” New York Times
In light of the low actual rates paid already by these corporations, I don’t understand why the rate even needs to be reduced. When General Electric pays an average of only 2.3% over ten years, what will they pay under Obama’s proposal? I think the proposal to set a minimum tax is good in theory, but the devil is in the details. I will believe it when I see it.
When politicians are screaming that corporations are people and should be allowed to deny their employees any insurance coverage for services that they have religious objections to, shouldn’t we make sure that they pay tax rates that Real people pay? How many workers were laid off or terminated while these profitable companies paid very little, if any, taxes? What are your thoughts?
(Disclosure: The author owns a small amount of shares in General Electric stock.)
Thanks Anon & CJ. Just in case anyone has hearing problems (like me) here are the lyrics to the song eniobob posted above:
Ball Of Confusion lyrics
People moving out,
People moving in,
Why, because of the color of their skin,
Run, run, run, but you just can’t hide.
An eye for an eye,
Tooth for a tooth,
Vote for me and I’ll set you free,
Rap on, brother, rap on.
Well, the only person talking about loving thy brother is the preacher,
And it seems nobody’s interested in learning, but the teacher,
Segregation, demonstration, intergration, determination, aggravation, humiliation,
Obligation to our nation.
Ball of confusion,
That’s what the world is today, hey.
The sale of pills is at an all time high,
Young folks walk with their heads in the sky,
The cities aflame in the summertime,
And oh the beat goes on.
Evolution, revolution, gun control, sound of soul-shooting rockets to the moon,
Kids growing up too soon,
Politicians say, “More taxes will solve everything,”
[From: http://www.elyrics.net/read/t/temptations-lyrics/ball-of-confusion-lyrics.html%5D
The band played on.
So, round and around and around we go,
Where the world’s headed, nobody knows
Oh, Great Googamooga,
Can’t you hear me talking to you,
Just a ball of confusion,
That’s what the world is today, hey.
Fear in the air, tension everywhere,
Unemployment rising fast,
The Beatles new record’s a gas,
And the only safe place to live,
Is on an Indian reservation,
The band played on.
Eve of destruction, tax deduction,
City inspectors, bill collectors, mod clothes in demand,
Population out of hand, suicide, too many bills,
Hippies moving to the hills,
People all over the world are shouting, “End the war!”,
And the band played on.
Great Googamooga,
Can’t you hear me talking to you,
Just a Ball Of Confusion, -ac
Perfect description of our crazy, mixed up world today
And does Lieberman’s wife list him as a pressure point, or maybe a client, or both?
AY
“There is a whole cottage industry of lobbyists that want to preserve their jobs….. ”
Help with that, please. Are they all working on the fed level or …..?
And are all registered, or under some oversight as to pressure points, clients, etc.?
I’ll bite i707…. What the he’ll are you talking about…. It’s as plain english as you can get…. Unless you you have another question you want the answer to…unless this is a bait question….
Good Post Rafflaw, this topic needs more attention in the Media.
There are some bumper stickers out that might be apropo:
“The System isn’t Broken it’s FIXED”
“Lower corporate taxes we can’t let them go hungry”
“The Budget Crises is a Hoax”
“Work Harder the Corporations want more tax breaks.”
“End special tax favors for corporations”
“Had enough of doo-doo economics”
“GOP corporate tax cuts are the Axes of Exil”
“Support the Unions they built the middle class”
“Occupy Wall Street”
Anon nurse,
It sounds like you were taught the same thing that the good Benedictine sisters taught me.
rafflaw,
For a moment I thought that I was you… 😉
Thanks for the posting. I was taught that those who benefit the most should give the most… It’s time to do what we have to do, as a country, to even things out…
Anon nurse,
None needed! 🙂
rafflaw…
My apologies… 😉
Thanks anon nurse for your assistance.
Margaret Richards,
I agree with both you and CEJ…
(Excellent comments and suggestions, CEJ.)
I haven’t watched it yet, eniobob, but “Ball of Confusion” hits the nail on the head…
Margaret Richards I agree with you; that Yahoo lead is vile and despicable.
When I see stuff like this I usually contact:
mediamatters.org
thinkprogress.org
Margaret Richards,
You might want to take a look at the following thread on this blog, which is where it was recently discussed.
http://jonathanturley.org/2012/03/01/racist-or-clueless-chief-judge-of-montana-under-fire-for-obama-joke/
(Read the comments from the bottom up… Sometimes the regulars will take up a topic that’s of interest. I’m just guessing that Professor Turley os probably well-aware of the Sandra Fluke situation. Perhaps Professor Turley or one of the guest-bloggers will do a follow-up story on the topic.
The tax structure that rafflaw points out indicates that it is one tool in the plutocracy’s bag of plunder tools.
They use those tools to plunder the citizenry, by way of plundering the people’s treasury.
Congress is another one of their tools, if current events is an indicator.
rcampbell,
I like your idea.
I realize that he did not write the article but there’s no way to contact him on this blog and I thought he might want to know about this continued abuse of this young woman. I did contact Yahoo and ABC which are apparently partners or whatever. So far I have the usual form letters which is not unexpected.
Now if we can just condense Raff’s piece onto a bumper sticker we may be able to get some conservatives to see it.
Margaret Richards,
Prof. Turley did not write this article that you posted on, I did. Contact Yahoo with any complaints about their article. Thank you.
Mr. Turley, Since there seems to be no way to contact you directly I am posting this:
I was appalled at the following headline at Yahoo News:
http://news.yahoo.com/blogs/ticket/obama-rings-limbaugh-slut-georgetown-sandra-fluke-200016515.html
Obama rings up Limbaugh’s ‘slut,’ Georgetown’s Sandra Fluke
By Dylan Stableford | The Ticket – Fri, Mar 2, 2012
Dylan Stableford is as vile & despicable as Rush Limbaugh for labeling Sandra Fluke in such a manner and he should be exposed & fired for his despicable action.
I hope that Sandra Fluke sues Limbaugh, Yahoo & this despicable reporter for the vile they have directed at her. Limbaugh’s slut??! Are these people insane?
There is a very good topic on npr that addresses this subject as well….. The reason that it’ll never be equitable is that too many lobbyists would be put out of work….. There is a whole cottage industry of lobbyists that want to preserve their jobs….. So, Imo…..we will never see any real change….