Respectfully submitted by Lawrence Rafferty (rafflaw)- Guest Blogger
I have written in the past about corporations dodging taxes, but this latest story out of Washington takes the cake. Susan Ford, an executive with Corning, Inc. testified recently at a House Ways and Means committee meeting and made the following claim. “American manufacturers are at a distinct disadvantage to competitors headquartered in other countries. Specifically, foreign manufacturers uniformly face a lower corporate tax rate than U.S. manufacturers, and virtually all operate under territorial systems which encourage investment both abroad and at home.” Think Progress That is a very strong statement coming from Ms. Ford. What is really interesting is that her claim that foreign companies face a lower corporate tax rate would be important issue, if it only was true!
“In fact, according to Citizens For Tax Justice, the company received a $4 million refund from 2008 to 2010. The truth is that Corning, Inc. is one of at least 26 companies that paid zero Federal taxes on their profits. ” Think Progress According to the Citizens for Tax Justice, Corning actually paid an effective tax rate of -0.2 percent for 2011! Now, as many on this blog can attest to, I am no math whiz, but a negative tax rate is a good thing, isn’t it? The truth that Ms. Ford and many other Corporate executives don’t want you to know is that the United States, while it does have one of the highest marginal tax rates, its effective tax rate is lower than most. In fact, according to Think Progress, the effective rate in 2011 was the lowest it has been in 40 years!
“U.S. corporate taxes that were actually paid (the effective rate) fell to a 40 year low of 12.1 percent in fiscal year 2011, despite corporate profits rebounding to their pre-Great Recession heights. The U.S. both taxes its corporations less and raises less in revenue from corporate taxes than its foreign competitors:
Why wouldn’t Ms. Ford and her fellow corporate executives want you to know that they are paying an effective tax rate that is so low that they are actually obtaining refunds from the IRS even though they are earning Billions in profits? Why do politicians keep repeating the meme that our corporations are being bogged down financially by the taxes that they are being charged and that they just can’t compete against these foreign companies that pay less taxes? When you are actually paying little or no taxes like the 26 companies mentioned above, how much lower can your taxes really go?
How can you not be competitive when you are not paying any Federal taxes at all? It is time for politicians of all stripes to actually tell the American public the truth about corporate taxes. The good Benedictine Nuns taught me that it is always better to tell the truth. Our long nosed fellow shown above learned the lesson too. So, here it goes. It isn’t Federal taxes that are preventing United States corporations from being competitive! Now, was that so hard? My nose feels much better now.
By the way, should there be an investigation into the untruths that Ms. Ford testified to? Let’s here what you think!
Additional Reference: Citizens for Tax Justice; Susan Ford Testimony
I stay this blog so many time, because every time something fresh, and I recited all object your blog, very charming
shano:
just call the presidents administrative assistant and complain.
Mike Spindell 1, July 23, 2012 at 10:21 am
“Mike, Let us not forget Gramm’s wife Wendy:”
Elaine,
Thank you for filling out my point so well.
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I still need a second on the McDonald’s joke.
I am with Tony C on this one. The size of these corporations is the problem. has anyone had a good experience with any of the service of these gigantic corporations? When I call and get some scripted person who lives in India who cannot answer any of my questions, then the whole business model stinks.
People complain that the government is inefficient, but these giant corporations are just as bad when they get to a certain size. Too big to service. Too big to know what is going right and what is wrong. Too big to manage efficiently in all sectors.
I’ll bring up an example of executive promotion which may be the same as in the USA.
Associate your name as driver of a bold new business venture, ignore its spectacular failure, and move on and upwards through the contacts gotten through advancing your bold new venture.
Do such bold sequences at least three times.
Be promoted to CEO, be afforded board memberships on other major corporations, be promoted to useless board chairman, retire, buy lord of the manorship with suitable mansion, be eased off the boards due to lack of business acumen.
Go to your mansion and sulk.
BettyKath,
Interesting idea on reasons for executive promotions.
Philip,
I understand your problems. The corporate welfare is immense and you are absolutely correct that the economy will never recover completely without a vibrant, working middle class.
My state (Kansas) has a new tax law. Starting January 1, 2013 business owners like me will be totally exempt from state income taxes because we are “Job Creators.” My employees, however, will continue to pay. Adding insult to injury is that my town and the state will socialize taxpayer support for airline traffic so I can fly more cheaply.
Who says there is no free lunch?
Unfortunately, what no one gets is that my business (dentistry) depends on a vibrant, affluent middle class in order to be successful. It will be years before the middle class is recognized as the true job creators. There will be troubled times till then.