While it is true that America claims the second highest corporate income tax rate (35 percent) among the 30 wealthiest countries in the Organization of Economic Cooperation and Development (OECD); our generous representatives in Congress have provided so many tax breaks and loop-holes for their corporate campaign contributors that the United States actually “collects the fourth lowest corporate tax revenues [of those same 30] countries” (The Brookings Institute, 10/27/08).
If that weren’t bad enough, a recent study by the Government Accountability Office found that two-thirds of all U.S. corporations paid no federal income taxes--between 1998 and 2005.
· More than 38,000 foreign corporations had no tax liability in 2005 and 1.2 million U.S. companies paid no income tax, the GAO said. Combined, the companies had $2.5 trillion in sales. About 25 percent of the U.S. corporations not paying corporate taxes were considered large corporations, meaning they had at least $250 million in assets or $50 million in receipts.”--AP, 8/12/08
Igor Greenwald (Smart Money, 1/25/08) explains there are “many ways to play the game”: Microsoft Corporation assigns high-value intellectual properties to its foreign subsidiaries, thus avoiding American income taxes on the royalties generated. Other corporations generate tax deductions by borrowing money from their own foreign branches (This is called income shifting). Vice President Dick Cheney’s old company, Halliburton, which has made tens of billions of dollars through no-bid contracts in Iraq, moved its corporate headquarters from Houston (TX) to Dubai to avoid paying their fare share of taxes. Some companies don’t even bother to move. They just rent a post office box and an empty office in the Cayman Islands to avoid American taxes.
So, the next time you pay your income taxes, you can take pride in the fact that you have contributed more to our nation’s upkeep than two-thirds of U.S. corporations--thanks to their tax breaks and loopholes--none of which would exist if corporations weren’t writing our tax laws. This is why we need to elect people who will represent the American people in Washington, DC--not just the corporations.
Barack Obama wants to close corporate loopholes and give Americans a $1000 tax rebate, funded by a windfall profits tax on the obscene profits being made by the oil companies. John McCain has a different plan:
· “The McCain plan would deliver approximately $170 billion a year in tax cuts to corporations, including some corporations that are very large and profitable. Just one of the proposals-cutting the corporate rate from 35 percent to 25 percent-would cut taxes for five largest U.S. oil companies by $3.8 billion a year.”--Center for American Progress, 3/27/08]
This probably explains why CEOs of the 100 biggest Fortune 500 corporations have given ten times as much money to Republican John McCain’s presidential campaign than they have given to Barack Obama’s (Truthout.com, 8/15/08). They are afraid that Barack Obama might actually represent the American people and make their corporations pay their fare share (like in the good old days).
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