(Original Post)
DAVE ZWEIFEL | Cap Times editor emeritus | Posted: Monday, December 5, 2011 4:00 am
To hear national politicians like the current crew of Republican presidential aspirants and local ones like Scott Walker and the brothers Fitzgerald tell it, corporations are being forced to pay so much in taxes that they can’t afford to hire workers.
Trouble is, this tall tale has been told so many times that people have come to actually believe it. How many times have you heard anti-government mouthpiece Grover Norquist complain that U.S. taxes on business are the highest in the world?
While the federal corporate tax rate is 35 percent, which, indeed, is high, there aren’t very many who actually pay it.
In fact, a new comprehensive study released in November reported that 280 of the biggest publicly traded American companies paid federal income tax bills equal to 18.5 percent of their profits during the past three years.
Like the most wealthy Americans, who Warren Buffet often points out wind up with tax bills of about 17 percent, the corporations are able to take advantage of tax code breaks that significantly lower their tax liability. Some are quite aggressive in uncovering ways to weasel out of paying taxes.
Citizens for Tax Justice studied the regulatory filings of the 280 firms to compute the actual taxes they paid. Using that information, the study found that one-fourth of the corporations owed less than 10 percent of profits in federal taxes while 30 of them had no tax liability over any of the three years. Another one-fourth actually wound up paying the 35 percent rate.
“Companies that are paying their fair share ought to demand that the tax-dodging companies pay their fair share, too,” said Robert S. McIntyre, the study’s author. “So should the public, which is subsidizing them in terms of increased federal debt.”
The organization conducted the study in response to corporate lobbyists’ claims that the 35 percent corporate rate needs to be lowered so that American companies can compete with foreign competitors. Citizens for Tax Justice insists that the taxes they pay now are actually lower than many of their overseas rivals.
As McIntyre pointed out, it’s the average U.S. citizen who winds up having to make up the difference. The loopholes and tax breaks are just one more way of shifting costs from the country’s most wealthy to the backs of the working people.