Both President Obama and Mr. Romney are working hard at selling the concept that cutting corporate taxes will stimulate jobs - that the private sector, if given a financial stimulus, will be motivated to act in a responsible patriotic manner. Bear in mind they say nothing more than a blanket corporate tax cut. Absent from all discussion and debate is which corporations will receive tax cuts; how much they will they be cut; by what means they will be cut; and if those who have effectively skirted taxation will finally be held accountable to pay their fair share in the future.
While there has been much talk about the upper one percent of wage earners in American paying their fair share in taxes there has been no such dialogue regarding corporations. That has been suspiciously absent from any concept of tax increases.
To be sure there are many smaller corporations paying the full corporate tax rate of 35%. Many of those may indeed be patriotic and community minded organizations in need of tax relief. But let’s check out the big boys.
Let’s start with the American Jobs Creation Act of 2004. This act contained more than $13 billion A Year in tax reduction stimulus money. To date there is no evidence that this bill created even one job in America. What it has effectively done is motivate GE to spend $18 million in lobbying to ensure this law is not overturned. Yes, it is true – this nonsense was sold by both congress and President George W. Bush as an American Jobs Creation bill. Talk about unmitigated gall.
This of course is the same GE who made over $14 billion dollars in 2010 and paid no taxes while receiving a $3.3 Billion tax benefit (presumably deductions) from the federal government. 2010 was the second year in a row that GE recorded billions in profits and paid nothing in taxes.
GE is not alone. According to a study conducted and released by the General Accounting Office (GAO) in Washington DC, two-thirds or 66% of U.S. corporations paid no federal income taxes between 1998 and 2005. The study surveyed tax returns from LARGE corporations defined as those having at least $250 million in assets or $50 million in receipts. In fact, in a three-year period, 78 corporations had at least one year where they paid no federal income tax at all, while 30 corporations paid not a dime over this entire three-year period. Those 30 corporations made over $160 billion in profit during that time.
While the corporate tax rate in America is 35%, the big boys have been able to ignore such a mundane mandate. Of the 500 companies in the well-known Standard & Poor’s stock index, 115 paid a total corporate tax rate — both federal and otherwise — of less than 20 percent over the last five years, according to an analysis of company reports done by The New York Times and Capital IQ. Thirty-nine of those companies paid a rate less than 10 percent. Then there were the 280 Fortune 500 corporations that paid only about half of the 35%. And those who paid even half the statutory corporate tax rate, paid far more than many of their competitors.
Meanwhile, President Obama has ceased talking about the more than 16 trillion dollars neatly tucked away in whatever vehicles may provide these companies with the best tax shelters, during a time of economic crisis.
This cowboy capitalism based upon the socialism of taking from the poor and middle class to enrich the greedy has failed. Our presidential candidates now need to disassociate themselves from that socialism. Thus far they have failed to delineate between greedy corporations and deserving corporations. What we need to see is that their level of commitment to pursuing increased taxation from those callous corporations is every bit as strong as their commitment to reducing the taxes of those who need relief. Failure to do so will just continue to further paint them as being no different than the self-serving charlatans they seem compelled to protect.
