If you were to ask me what the 2012 election will be about, two things would pop into my head: jobs and taxes. Millions of Americans need jobs, the president has a plan to help the unemployed (while repairing the country’s tottering infrastructure) and he is seeking a modest tax increase on the wealthiest Americans to pay for it.
Republicans are digging in their heels, flatly resisting any and all tax increases on corporations or the rich.
And who is funding the Republican resistance? The corporate elite.
The country’s ruling class does not want to pay higher taxes. And they’re spending millions to lobby members of Congress in an all-out war to block any tax increase.
I bet they’re spending more on lobbyists than they would have to pay in the event of a tax increase. It makes no sense.
Especially when you consider that under the present tax structure, many of the largest companies pay no income taxes. Not a dime! Indeed, it’s the taxpayers who are giving money to some of the richest companies.
Here’s what Reuters reports today:
Thirty large and profitable U.S. corporations paid no income taxes in 2008 through 2010, said a study on Thursday that arrives as Congress faces rising demands for tax reform, but seems unable or unwilling to act.
Pepco Holdings, a Washington, D.C.-area power company, had the lowest effective tax rate, at negative 57.6 percent, among the 280 Fortune 500 companies studied. (Negative means that we pay them!)
The statutory U.S. corporate income tax rate is 35 percent, one of the highest in the world, but over the 2008-2010 period, very few of the companies studied paid it, said the report.
The average effective tax rate for the companies over the period was 18.5 percent, said Citizens for Tax Justice and the Institute on Taxation and Economic Policy, both think tanks.
Their report also listed General Electric Co, Paccar Inc, PG&E Corp, Computer Sciences Corp and NiSource Inc as among the 30 that paid no taxes. All 280 corporations examined were profitable over the period….
The authors looked at the tax filings from 2008-2010 of 280 of the nation’s biggest, most successful corporations. These companies reported $1.4 trillion worth of profit during a period when most Americans were struggling to stay afloat. The authors discovered that the average effective tax rate — what the companies really paid after government subsidies, tax breaks and various tax dodges were taken into account — was only 18.5 percent, less than half the statutory rate. Fully a quarter of the 280 companies paid under 10 percent.
An article in Salon sums up the situation this way:
In an era of crushing government deficits and mass unemployment, corporate America is not only skating blissfully free of its civic responsibilities, but continues to complain that it is paying too much in taxes. Even worse: Congressional Republicans and many Democrats agree! Listening to our politicians talk, you would imagine that corporate America’s neck is permanently under the tax man’s steel-tipped boot. When, in fact, the exact opposite is the truth.
Click here for the Salon article.
How do the richest of the rich get away with this kind of scam? The reason is, of course, loopholes. The tax code is riddled with exemptions that favor the rich. Everyone knows by now that Americans – not just corporations but individuals too – pay little or no income taxes if they can afford to hire a good tax lawyer.
So what on earth is going on?
Why would the Republicans, who represent corporate America, want to change a tax system that’s so favorable to their bosses? Could they be so greedy that they want even more of the pie?