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