It doesn't matter what a corporation pays in taxes as compared to GDP, or how it's compared to any other index of measure (to skew the numbers), it's what they actually pay to the U.S. Treasury after loopholes (aka "deductions") that matters most. And for the last 25 years corporations have actually paid historically low taxes.
While today some corporations may have paid the maximum rate of 35% (when it was over 50% in the 1950s), many others paid ZERO, with the average being only 18%.
The same can be said for their CEOs and other high-income earners. While although the top bracket is also almost historically low (at 35%, when it was once over 90%), what they actually pay is nearer to 15% because the majority of their income is earned through capital gains
And because corporations have been paying a low effective corporate tax rate for decades, that didn't keep them from outsourcing jobs overseas for cheap labor, but rather, it did enable them to pay very excessive CEO salaries...who only mostly pay 15% in federal income taxes on their capital gains.
What makes a grown man cry?
When Congress voted earlier this year on whether or not to end taxpayer-paid entitlements for big oil companies, ConocoPhillips CEO James Mulva (a Republican) cried, saying ending the tax breaks for the big oil companies would be "un-American", then he refused to apologize to the American people.
Republicans (who represent CEOs of large corporations) cry all the time too. When we asked large profitable corporations to pay their fair share of taxes, they cried, "You can't tax us, we're the job creators!" When we asked Fox News millionaires like Bill O'Reilly for a little more, they cried, "If you raise my taxes, I'll have to quit my job!" When we asked that the Bush tax cuts be allowed to expire so that we could balance the national budget, they cried, "That's class warfare!" or "Why do you want to punish the rich for their success?"
When a CEO (or Republican or Fox News commentator) cries about paying too much taxes, they're usually lying. It's almost as though they were all suffering horribly! They're like big cry babies! They're like sniveling rich spoiled brats, the privileged ones, who always feel entitled!
Does taxing these supposed "job creators" really cause unemployment? It seems more likely that by NOT taxing them has caused 30 million people to lose jobs since the Bush tax cuts from 2001 to the present.
America's middle-class peaked in 1979. As of 2010 50% of all American workers earned less than $27,000 a year when the poverty line for a family of four was $22,314. Of the total work force, 16% are unemployed and earned ZERO dollars last year (of those, 50% collected unemployment benefits at some time). The top 1% earns $1 million or more a year.
Because of the many loopholes in the U.S. tax code, on average, for the past 25 years the largest U.S. multi-national corporations and banks have paid a lower effective tax rate in corporate taxes (14% to 18%) than they would have in China (25%).
High taxes is not why U.S. companies outsource jobs, it's because China has very few (if any) environmental regulations and they offer very cheap labor. (Read: America's Race to the Bottom and Apple Inc. is Rotten to the Core)
The effective corporate tax rate has been steadily declining for decades. Corporations paid more than 50% of their profits in federal taxes in the 1950s, 38% in the 1960s, 33% in the 1970s and 25% in the 1980s. All the while, U.S. wages have been stagnant for years - - even as worker productivity has risen.
U.S. corporations are sitting on a huge and growing pile of cash. It just crossed the $2 trillion threshold, according to new Fed data. The Federal Reserve figures don't even include the substantial amount of cash held at many U.S. companies' foreign subsidiaries, which would be subject to taxation if the companies repatriated it.
And they're still bringing up the same old tired argument about "double taxation".
Double taxation is defined as the systematic imposition of two or more taxes on the same income (in the case of income taxes), asset (in the case of capital taxes), or financial transaction (in the case of sales taxes)
The IRS states: "The profit of a corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends. This creates a double tax. The corporation does not get a tax deduction when it distributes dividends to shareholders. Shareholders cannot deduct any loss of the corporation."
Those who argue that capital gains taxes are a "double tax" are just full of crap.
If you work for a corporation and they pay you an hourly wage, is that a tax to them? If a corporation issues stock options to their CEOs in lieu of a cash salary, and after those stocks are sold and taxed as capital gains, is that a "double tax" on the corporation, or just another form of a wage that's paid to an employee from the corporate treasury?
When I get a paycheck, it has federal taxes and FICA deducted. Shouldn't the CEOs also have to pay their share of federal income taxes and FICA from their personal incomes?
Their argument of "double taxation" would be the same as if I took my paycheck and went to buy tires for my car and was charged a federal excise tax; wouldn't that also be a "double tax"? After all, the corporation that paid me an hourly wage also paid corporate taxes and I already paid federal income taxes before I received my paycheck
If I had earned $16.59 an hour ($35,501 a year) in that CEO's factory, I'd be in the 25% tax bracket. The CEO who pays me from the corporate treasury, and also pays himself with stocks options, would only pay 15% in capital gains taxes (and have their Social Security taxes capped).
Corporations have already been paying a declining "effective" corporate tax rate for decades (peaking in the 1950s), just as the CEOs have also been paying a declining capital gains tax rate too...hence, the record profits and record bonuses we've been hearing so much about.
These people NEVER think they earn money, because the greed for wealth is an addiction..."Wealth is like sea water; the more we drink, the thirstier we become." - Schopenhauer
The CEOs are already earning record profits and their corporations have been earning record profits. They've already over-worked us, under-paid us, over-charged us, and out-sourced us while under-paying us in tax revenues. It's time to tax.
A corporation by it's very nature won't go away and die if we tax them and their CEOs more. No matter what we do, they'll always over-work us, under-pay us, over-charge us, and out-source us more in their ever-ending quest for more profits...but at least we can keep them from under-paying their taxes.
Most of the corporate monsters we have today started out small when tax rates were much higher. That didn't inhibit their growth; they grew and grew, gobbling up smaller ones along the way, until they became giants (or "too big to fail"). They almost become an entity onto themselves. CEOs are expendable, and if you chopped off the head of a corporation, another one will grow back to take its place.
But I can sympathize with the people who run these multi-billion-dollar multi-national corporate conglomerates....about as much as they do for me. I'm tired of feeling sorry for the ultra-rich.
And I just hate to see a grown man (or woman) cry. Especially millionaires like Bill O'Reilly, Paul Ryan, Sean Hannity, Eric Cantor, Glenn Beck, Rick Santorum, Rupert Murdoch, the Koch bothers, Paul Rand, Karl Rove, Grover Norquist, Rush Limbaugh, Newt Gingrich, Herman Cain, Mitt Romney, and all the big bankers and CEOs.
But while they were crying all the way to the bank, I was standing in line waiting for food stamps. So we need to tax them, because if they won't hire and pay people, they can a least pay for their food stamps.
"Class warfare" by ass, it's just "business".
My Related Posts:
- Subsidies for the Rich and Famous
- Historical Tax Rates on the Rich (1862 to 2011)
- The Second Gilded Age: History Repeats Itself
- Mellon: The Banker Who Rigged the U.S. Tax Code
- The GOP Tax Plan - Ignorance, Insanity, or Greed?
- We have a Revenue Problem, Not A Spending Problem
- 280 Corporations are "Too Big to Tax"
- Trickle-Down Economics: The Cruel 30-Year Hoax
- You Pay Hidden Entitlements for the Rich
- Record Profits + Record Bonuses = Zero Jobs
- Mom Pays More Taxes Than Bankers!
Other Related Articles:
- "The richest 1 percent have more financial wealth than the bottom 95 percent combined."
- The total net worth on the Forbes 400 List marks $1.5 Trillion in 2011
- The Global Super-Rich Stash: Now $25 Trillion
- Historical Tax Rates and Time-line
- Capital gains from Citizens for Tax Justice
- 1977 - 2007 tax rates from U.S. Treasury
- Economic Policy Institute on capital gains taxes
- Capital gains explained from U.S. Internal Revenue Service
- The great corporate tax scam
- The top 1% took home 23.5 percent of income in 2007, the largest share since 1928
Click photo to enlarge.