The United States corporate tax rate is 35% and is one of the highest of any nation in the world; therefore, one can, to some extent, sympathize with American corporations for wanting the rate lowered and the desire of some businesses to relocate their headquarters operation to lower tax rate countries. But wait a minute, realistically is the rate that high, that unfair? When all measures are considered, is it stifling the American economy? The answer is an emphatic No! Let me explain.
Teams of tax lawyers, accountants, corporate lobbyist, influence peddlers, the Congress and other own special interests make a mockery of the 35% rate. For American corporations the law apparently does not apply as intended and is a smoke screen, a Swiss cheese of loopholes for profit grabbing at the expense of the American public. The reader may be astonished to learn the exact amounts the following profitable Fortune 500 companies actually paid the federal government in taxes during the period 2008 thru 2012.
Take a look: American Electric & Power, Boeing, Dupont, Exxon Mobile, Fed-Ex, General Electric, Honeywell International, IBM, United technologies, Verizon Communications, Wells Fargo, and Yahoo, paid Nothing. Zero! Furthermore the average paid for Fortune 500 Corporations is 19.4%, while a third paid on the average of only 10%. This discloses the myth of a 35% tax rate. No corporation pays it.
Moreover, our federal government refunded 2.5 billion dollars immediately to the corporations or credit the amount for future filings. We assume the American taxpayer should consider themselves fortunate that the Treasury Department provided these corporations only a mere couple of billion dollars in refunds. With a little more creative bookkeeping these corporate bandits could have finagled more than they have. So, let’s not feel sorry for corporations or for their complaints of ‘Cry Wolf at the Door” as they handily make off with billions for hidden investments, savings, dividends and bonuses while the true adjusted average wage has for the worker not gone up a dime since before Ronald Reagan’s term. It is estimated these Captains of Industry are comfortably sitting on from two to three trillion dollars that has not been invested in the United States during this rough period during the nations recovery from the worst recession since the days of the Great Depression. We should not have the least sympathy for the greedy needs of these big business giants and their cohorts in Congress as they moan of profit loss and potential losses due to taxation. The next time one hears John Boehner or Mitch McConnell complain that our tax structure is deficient in supporting investment need for their dynamic corporate Wall Street sponsors, these facts should be brought to their attention. (As if they didn’t know) So, welcome to the domestic and international Tax Avoidance Club.
President Ronald Reagan signed into law the tax reform Act of 1986 that was signed specifically to increase corporate business revenue by 30%. This give away law continues and is largely in effect to this day. President Obama wants to diminish or delete tax loopholes for the largest Corporations, but allows the corporate tax rate to stay the same knowing the law is successfully undermined every day. Obama’s effort is a mild approach to solve the issue, a slow step by step advance that will take years and necessitate the cooperation of future gridlock Congresses and Administrations. In the meantime big business lobbies, coordinated by mostly the Republican Party want additional tax breaks so they can keep trillions more over the next decade and they so drag their feet on behalf of any worthwhile reform, while the Democrats appear inactive and mute on the subject.
The reason is obvious Democrats want big time money from executives and top 500 Political Action Committees. They are willing to let the Republicans stem the debate and dare to try to put forward programs to reduce Medicare, Social security and other social benefits to absorb the budget shortfall that should be apportioned to Wall Street Corporations.
So, what is the message to the American worker, the middle class, and the public in general, is it ‘We’re out of here with your jobs to save our bottom line’ heading for Canada, Ireland, the Cayman Island, Iceland, Britain, Luxemburg, as Pfizer, Burgerking and Federal Express have recently done. The tiny country of Luxemburg has 340 American tax evasion accounts stashed away in its banks. That’s moneys that could be put to use in the U. S. to build and maintain our dilapidated infrastructure, maintain our schools and creat jobs for people. Since the early 2000’s companies have cut their work force in the U.S. by 2.9 million while creating 2.4 million jobs overseas for themselves or others.
These are a cabal of corporations that have little appreciation for the country that has supported and protected them. They are patriotically strip mining America at the expense of the average American taxpayer.
All the best,