(Original Post)
MIKE IVEY | The Capital Times | Posted: Wednesday, November 16, 2011
Something is definitely out of whack when a lowly newspaper reporter in Madison, Wis., can rightfully complain:
"I pay more federal income taxes than General Electric, Boeing, DuPont, Wells Fargo and Verizon put together."
No wonder small-business owners feel like the cards are stacked against them.
But that's the sad state of affairs -- and something Americans on both the left and right increasingly agree is messed up. Even Herman Cain gets it.
In this excellent new study, the non-partisan Citizens for Tax Justice found that many of the largest corporations paid no federal income tax from 2008 to 2010. It's not just the well-publicized case of GE
Dozens of leading companies have managed to avoid paying income taxes despite booking hefty profits. The list includes two state-based electric utilities -- Wisconsin Electric of Milwaukee and Integrys Energy, formerly Wisconsin Public Service, of Green Bay.
It also includes Mattel, parent company of Middleton-based American Girl, which counted over $1 billion in profits from 2008-2010 and still somehow managed to grab a $9 million refund from the IRS.
Other state companies have been enjoying similar tax holidays as noted by the Institute for Wisconsin's Future.
The CTJ report, meanwhile, found that while U.S. corporations are supposed to be taxed at 35 percent, the 280 largest firms surveyed paid on average closer to 10 percent.
Twenty-five years ago, the report notes, President Ronald Reagan was horrified by a similar epidemic of corporate tax dodging. He pushed through the Tax Reform Act of 1986, working to close the loopholes and make everyone pay their fair share.
But things have reversed over the past decade, led, ironically, by the very politicians who claim to oppose government subsidies that interfere with the free market.
"It's been 25 years since the last big tax reform legislation, which cut the corporate rate to 34% from 46% and eliminated a lot of deductions and tax breaks. But a quarter-century of pushing by businesses -- of which GE has been among the most aggressive -- has left us with both the lower tax rate (now 35%) and lots more deductions and shelters and other tax-reducing tactics than the 1986 legislation envisioned," notes Forbes columnist Allan Sloan.
The inequity is enough to make Cain's 9-9-9 flat tax plan sound reasonable.
Of course, the little guys sure can't get away with much. Witness the woman from LaFayette County who just got jail time for falsely collecting $7,979 from Wisconsin and $12,165 from the IRS. Meanwhile, the Wall Street crowd goes unpunished for their misdeeds.