Big business must pay its fair share to help America survive recession
Businesses complain that our corporate income tax rate is higher than other nationsí rates, but that assumes corporations actually pay the taxes.
In truth, there are more holes in the U.S. tax code than in Swiss cheese, and business takes advantage of every one of them. In the 1950s, corporate taxes made up 46 percent of federal tax collection. Today those taxes make up only 15 percent.
Donít let their whining fool you! According to the Congressional Budget Office, U.S. corporations pay one of the lowest corporate tax rates as a percentage of GDP in the world.
In 2006, it was just 2.9 percent of GDP while the average rate of economically advanced countries internationally was 3.8 percent.
The notion that American companies will be unable to compete overseas is a myth. In addition to having a comparable or lower income tax rate, the United States has no value-added tax, a kind of national sales tax that exists for most of our foreign competitors.
The corporate tax bonanza is most evident in the taxation of overseas profits. In 2004, U.S. corporations paid just 2.3 percent on total multinational earnings of more than $700 billion.
Why? They hide their profits in foreign tax shelters. Thus, over the years the burden has shifted from corporations to individuals, especially wage earners.
The Government Accountability Office found that corporate tax-havens cost the Treasury $100 billion every year ó a trillion dollars over 10 years.
More than 80 percent of the biggest U.S. corporations now shelter profits offshore, with the biggest abusers multi-billion dollar corporations like Citigroup and Bank of America, both recent recipients of tax-payer funded bailouts.
Itís not just the government, or wage-earning taxpayers who are unhappy with these tax skates; itís main street American businesses that play by the rules and pay their taxes.
Why should small businesses in Toledo, Ohio, pay the full freight, but not companies 10 times their size? Those smaller, productive businesses need a business association that represents their interests, but the Chamber of Commerce knows its bread is buttered chiefly by large corporations. President Obamaís plan seeks only to ensure that all corporations pay their fair share and to eliminate the incentives that encourage them to move their business overseas on paper only and bury their tax obligations in Caribbean banks.
Corporate wailing aside, it is a modest, reasonable, common sense plan that will not impact competitiveness and will raise revenue during the worst economic climate we have experienced since the Great Depression.
Corporations that argue every tax hurts their ability to compete until they are paying zero taxes, leave the full responsibility for paying our nationís bills on working people whose taxes are deducted from the source.
Meanwhile, they get all the benefits of doing business in the United States ó roads and bridges on which to deliver their products, public utilities, an educated workforce, police and fire departments, a stable government with a strong military to protect their international interests, and so on ó largely paid for by you and me.
It is time to return fairness to our tax code, and for those who have benefited the most from all our great nation has to offer to stop their bellyaching. They canít have it both ways.