Corporations Zero Tax Liability
August 16th, 2008 -- Posted in American Politics | 12 Comments »The GAO recently released a report in July 2008 entitled:
Comparison of the Reported Tax Liabilities of Foreign- and U.S.-Controlled Corporations,1998-2005
I cannot take credit for finding this story as that clearly goes to the folks over at C&L but I felt like they did not make the necessary conclusions. One of the big divisions between those on the left and right, Obama and McCain, liberals and conservatives is that liberals believe Corporations should pay their fair share in taxes while conservatives believe that excessively taxing corporations reduces their competitiveness (something to that effect). The Tax Policy Center recently released and updated analysis of the respective candidates tax proposals in which they state Senator McCain’s position:
Corporate income tax reductions. Corporations currently pay tax at rates of 15, 25, 34, and 35 percent and are also subject to 3 and 5 percent surtaxes in certain income ranges. Senator McCain proposes to cut the maximum corporate income tax rate from 35 to 25 percent.
The problem with reducing the maximum corporate tax rate by 10% is that 54.9% of U.S controlled corporations offered no tax liability for at least one year between 1998 - 2005. During that same time corporate sales in the USA totaled $2.5 trillion dollars according to Senators Levin and Dorgan who requested the study:
Now let’s pause and think for a moment the amount of money the American government would have lost if the corporate tax rate had been reduced to 25% at that time. The Government would have then recieved 25% of a possible 45.1% of companies whose tax liability achieved the maximum tax bracket. Given the rising cost of the Iraq war and other possible conflicts, can we afford to give companies and even greater break then the one they already enjoy? What about the oil companies, where do they fit into this, I would personally not be surprised if someone lookes through their financial statements to discover how much of an advantage they have been taking of the tax system.
