Jan 10th, 2012
As this is an election year, we can expect to hear a great deal from the GOP hopefuls regarding the 'crippling' tax rates on American businesses. Try and remember that this is straight up, one hundred percent bullshit.
"The number of U.S. corporations structuring their businesses in such a way that they can avoid higher taxes has skyrocketed in the past quarter century,The Wall Street Journal reports.
In 1986, about 24 percent of corporations were what's known as nontaxable businesses -- meaning the companies themselves pay no federal income taxes -- instead passing on the earnings to individual investors to pay taxes on. By 2008, these businesses accounted for about 69 percent of all corporations, a designation that can save companies hundreds of millions of dollars in a single year
Advocates for the business community have expressed frustration with the country's 35 percent corporate income tax rate, calling it unreasonably high. In practice, though, it's common for big businesses to pay much less, thanks to a cornucopia of tax-code loopholes and exemptions won by lobbyists.
The issue of corporate tax participation has become especially pressing in recent years, as the country struggles to manage its ballooning deficits. Corporate taxes for non-financial companies have fallen more than 13 percent since 2007, according to Bloomberg. At the same time, the national debt grew to $15.23 trillion from $9.13 trillion -- a number larger than the economy itself.
According to a recent analysis of nearly 300 Fortune 500 companies by the Citizens for Tax Justice, the average company was paying just 18.3 percent in taxes -- a little more than half the official rate. And by using techniques like industry subsidies, stock option packages, and moving assets overseas where they can't be taxed, 30 companies mentioned in the report -- including Wells Fargo, Verizon, Boeing and General Electric -- didn't pay a cent in federal taxes in 2008, 2009 or 2010, the report found."
Coming on the heels of the most recent IRS data showing hundreds of billions in uncollected taxes, a portrait is emerging that puts the lie to very nearly every argument made by America's elites and our politicians. Continued calls to lower tax rates are absurd. What's lower than zero? It turns out our government has an answer; actual corporate welfare.
A study released by Citizens for Tax Justice last November revealed:
"Thirty corporations paid less than nothing in aggregate federal income taxes over the entire 2008-10 period. These companies, whose pretax U.S. profits totaled $160 billion over the three years, included: Pepco Holdings (–57.6% tax rate), General Electric (–45.3%), DuPont (–3.4%), Verizon (–2.9%), Boeing (–1.8%), Wells Fargo (–1.4%) and Honeywell (–0.7%)." EMPHASIS OURS