by Linda Beale
Ok, I’m tired of it. Aren’t you? The Tax Foundation–an organization that claims bipartisanship but these days seems to be a shill for corporate managers and owners–is at it again, claiming that US businesses “are paying the second-highest corporate tax rate in the world.” That’s misleading at best, and maybe just downright hypocritical.
The Tax Foundation knows that the US statutory tax rates (set at 35% for the biggest corporations, but at much lower rates for the majority of corporations that have less than $10 million in assets) are not paid on the full amount of income by corporations, and in fact the effective tax rates (amount of tax paid as a percentage of income earned) are much much lower–enough lower so that the US counts as a tax haven on the tax rates scale.
Further, the US taxes for US businesses are plenty competitive. Taxes are most likely not the reason they go abroad: it seems to be much more likely that they do so to get away with paying their workers near slave-labor wages rather than enough for a decent standard of living. And even that isn’t passed on to customers–it provides the moolah to pay managers ridiculously high salaries and pay rent dividends to shareholders.
Moreover, tax cuts for corporations don’t really create jobs. If they did, we wouldn’t have had the great recession, since the Bush tax bills included a whole smorgasboard of tax cuts for businesses, including the infamous “American Jobs Creation Act of 2004” that cut corporate rates (almost tax-free repatriation of foreign-earned income, manufacturing deduction that lowered the corporate rate for most US industries, all kinds of tax expenditures for extractive industries, various changes to subpart F that favored corporate taxpayers, bonus depreciation, etc.). If tax cuts for businesses worked, those bills should have resulted in millions upon millions of new jobs. Instead, it looks like most of the benefit of the low-taxed repatriation of profits went to stock buybacks and other manager/owner-friendly provisions, not job creation. IN fact, as pointed out in earlier postings, many of the corporations employing the low-taxed repatriation laid off workers! So much for tax cuts as a way to create jobs…..
But the organization continues putting out one press release after another claiming that our business tax system is “out of line with the rest of the industrialized world” or that we don’t have jobs because of a too-high corporate tax rate.
Bunk. Hoopla. Exaggeration.
The Tax Foundation press release then goes on to commit even worse sins. It complains about “playing one class against another” in setting tax policy. Fact is, the wealthy class has been engaging in class warfare in this country for decades. Talking about appropriate distributive policies is the right thing to do. We need to address the growing problem of income inequality and the resulting diminishing standards of living for many in a country that is extraordinarily wealthy in the aggregate.
crossposted with ataxingmatter