President Barack Obama recently proposed lowering the corporate tax rate to 28%. Rick Santorum, in an attempt to outdo him, proposed lowering the corporate tax rate to 17.5% so that American corporations can compete more effectively. But is there any justification for doing such now?
Presently the average corporate tax rate is only 12.1%. So why is there all this screaming and hollering about 35%? Who is paying a 35% tax rate? Certainly not some of the top thirty corporations in America, who in reality had a negative tax rate.
And corporate profits in the third quarter of 2011 alone were at an all-time high at $1.97 trillion. Do we really need to increase our national debt now with a $15 trillion national debt by giving the corporations a giantic tax cut?
GE had a negative tax rate of 64% in 2010. And between 2002 and 2011 it had an average tax rate of only 2.3%.
Over the last sixty years, corporate tax revenues as a source of federal tax revenues decreased from 30% to nearly 5%, whereas the payroll tax revenues as a source of federal tax revenues increased from around 10% to over 40% of the total revenues. In other words, employers had effectively shifted their tax burdens onto their employees, as they had their medical insurance and retirement benefits. Cool, huh? The transfer of wealth to the top 1% keeps going and going and going.
Warren Buffett makes a compelling argument for justice and equity in our tax laws, especially in light of the huge national debt and the gigantic transfer of wealth to the few over the last thirty years.
Why are Certified Public Accountants so silent on this issue? Are they not concerned about equity in our tax laws?
To see a video and transcript of more on tax injustice in America today, please see Should corporate taxes be lowered when their effective tax rate is only 12.1%?