The Torture Of Corporate Tax Rates
So Grover Norquist associates corporate tax rates to waterboarding, which seems perfectly apt, right?
NORQUIST: The other tax cut you could do is cutting the corporate rate. The U.S. corporate rate is 35 percent; the European rate is 25 percent. Obama is a more international guy, so we should be close to the European average. We’ll stop torturing people, we’ll stop torturing corporations, and that will make us more like Europe.
Of course, he's talking about the terrible burden of the corporate tax RATE. The only burden this actually puts on corporations is that they have to hire creative accountants to get them to avoid those taxes. And they do an incredibly good job.
Most of America's largest publicly traded corporations -- including several that are receiving billions of dollars from U.S. taxpayers to finance their recovery -- have set up offshore operations that could help them avoid paying U.S. taxes on their profits, a government study released yesterday found.
American International Group, Bank of America, Citigroup and Morgan Stanley are among the companies that are getting bailed out by U.S. taxpayers while having subsidiaries in locations where they can avoid paying U.S. taxes, according to the Government Accountability Office.
Of the 100 largest public companies, 83 do business in tax-haven hotspots like the Cayman Islands, Bermuda and the British Virgin Islands, where they can move their income into tax-free accounts.
It is all legal, but it could come to an end, given the dire condition of the U.S. economy and President-elect Barack Obama's campaign pledge to close this popular business tax loophole. The Treasury estimates that it loses $100 billion a year in tax revenue as a result of companies shipping their income off shore, and congressional leaders are vowing to introduce legislation forcing big companies to pay full freight.
I would be all too happy to lower the corporate tax rate if concurrently we ended every single loophole and tax credit and mandated exactly 25 of all income, or a lesser percentage of gross sales, to flow into the US Treasury. This actually would boost revenues, because as it stands now, most US firms paid no taxes in the 1990s and two-thirds paid none from 1998 to 2005. The statistics are astounding and they have led to the United States having the second-lowest effective tax rate in the world.
But I suspect ol' Grover wouldn't like that. Because he hates America.
"This is kind of like economic patriotism," (Sen. Byron) Dorgan said. "Americans were told you have to pony up some money to help these companies. And it's rather infuriating for them to find out now that those companies, when they were profitable, didn't want to pay taxes and found clever ways to hide their money overseas."
Yes, I questioned his patriotism.