Disgraceful tax dodge
If there is anything we should be able to agree upon in this fractured nation it's that giant corporations should not pay less in federal taxes than the average small business or working man and woman. Especially those corporations that extravagantly compensate their top officers and/or ship jobs overseas where they pay their workers pennies. There is no defense for this chicanery, but even as preposterous flat tax and 9-9-9 tax plans that would punish the middle class get floated, there is little serious discussion on the campaign trail about corporate tax reform.
A new report emerged last week to put a finer point on what was already part of the motivating force for the Occupy protest movement. The nonprofits Citizens for Tax Justice and the Institute on Taxation and Economic Policy found that 30 of 280 corporations studied paid no federal taxes between 2008 and 2010. Several, courtesy of tax breaks, ended up with what amounts to negative tax rates. Under the federal tax code, corporations are supposed to pay 35 percent of their profits in taxes, but the study found that only 71 of the corporations paid taxes in roughly that proportion while approximately the same number paid less than 10 percent.
It has been known for some time that General Electric collected tax rebates even without paying taxes last year, but the study puts a number on it -- a remarkable minus 45 percent negative tax rate over three years. The giant corporation's undeniably gifted tax attorneys found a variety of loopholes to squirm through to avoid paying federal taxes, loopholes that don't apply to or can't be located by the average small business or working person.
A spokesman for Verizon, which paid a negative 3 percent rate from 2008 to 2010 according to the study, told The Washington Post that "Verizon fully complies with all tax laws and pays its fair share of taxes." Plainly, a minus tax rate is not a fair share of taxes. It's no share. And no one is accusing Verizon of cheating on its taxes. The fact that the profitable corporation had a minus tax rate for three years while complying with tax laws makes the argument that the tax code must be reformed and corporate loopholes closed.
Taxes are not a penalty for living in America; they are the price for living in a nation with obligations -- like defense, education, infrastructure, law enforcement, food inspections and many more -- that contribute to our standard of living and must be paid for. The corporations that benefit from everything America has to offer while cynically ducking their responsibility to pay for it should be embarrassed and ashamed. Financially struggling Americans should be angry, and must make corporate tax reform a major issue in the national election campaign.
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