The Republicans in Congress are refusing to consider eliminating tax breaks for wealthy corporations as part of the plan to reduce the deficit. They portray the issue of raising taxes on wealthy corporations as "redistributing wealth" and have convinced many Americans that this is somehow unfair. But the fact is that having the wealthiest corporations pay more in taxes is based on simple fairness. These big corporations use the largest percentage of our nation's public goods that are paid by our taxes such as roads and ports for shipping their goods, courts for settling their corporate legal issues, police protection for their multiple properties, air traffic control for their fleets of private jets and the military for protecting shipping lanes on the high seas and their property overseas. The big corporations create industrial waste which needs to be cleaned up. They dump huge amounts of trash in our landfills and they pollute our air much more so than the average citizen, yet they are not paying their fair share to support the system.
When people hear the term "redistributing wealth," they mistakenly believe that this means that their tax dollars are being transferred downward to the poor. What has actually been happening under the Republicans is that wealth has been dramatically redistributed upward to the wealthiest corporations, their owners and their top executives. The latest economic statistics show that the top 1% of households in the U.S. own 42.7% of all the financial wealth in America. While the wealth of the middle class has been decreasing, the concentration of wealth at the very top has been dramatically increasing. Unless we act to bring fairness back into our tax system, a small super-wealthy elite will soon own most of America and those of us in the middle class will be at their mercy. The long-range plan of the big multi-national corporations is to reduce American wages down to a level that is the same as the rest of the world. Their goal is to create a cheap American labor force that will allow them to end the cost of having to constantly move their factories around overseas in pursuit of low-cost labor.
The final figures from 2010 show that the median pay for top executives at 200 big companies last year was a whopping $10.8 million. That works out to be a 23 percent gain from 2009. Despite the big recession, executive pay at the big corporations has been accelerating. When we ask the wealthy corporations to pay more in taxes, this is not about "redistributing wealth." It is simply making sure that they pay their fair share in taxes for the cost of what they use. The richest corporations use more of America's vast public infrastructure that was built by our tax dollars and they should pay more for its use. They can afford it by bringing executive pay down to reasonable levels.
The Republican refusal to consider ending tax breaks for rich corporations as part of the deficit reduction plan is not just bad public policy. It is fundamentally unfair to 99% of the American taxpayers who are currently subsidizing the use of America's vast public infrastructure by these wealthy corporations and their owners. Instead of talking about cutting Social Security and Medicare, we need to talk about cutting the tax breaks for the big oil companies and the hedge fund managers on Wall Street. Before we even think about cutting student loans for college, we need to cut the tax breaks for the owners of corporate jets and professional sports teams.
If we are going to cut the deficit, we have to use simple common sense. How does the average American family deal with a deficit in their budget? They have two alternatives--cut their expenses and/or increase their income by such options as working more hours or having another family member take a part-time job. The Republicans would have us believe that there is only one alternative--cutting expenditures. They refuse to consider the second alternative that involves increasing income by cutting tax breaks for the big corporations. By refusing to consider this alternative, the Republicans are choosing to protect the wealthy at the expense of America's working families. For this they should be ashamed.
According to estimates produced by the Department of Treasury staff, the special tax breaks benefiting corporations will cost the U.S. Treasury about $102 billion in 2011. I can hear the Republicans complaining that corporations already are burdened with a high tax rate. But the fact is that because of all the corporate tax breaks that their lobbyists have engineered into the tax code, many big corporations pay little or no taxes. For example, General Electric earned $14.2 billion in profits in 2010, but it paid not a penny in taxes because the bulk of those profits, some $9 billion, were offshore. In fact, GE got a $3.2 billion tax refund from you and me. We need to eliminate all the corporate loopholes and treat everybody fairly . This is an issue that we can all agree upon.
By eliminating these corporate tax breaks, we can avoid deep budget cuts in those programs that benefit America's middle class. Unfortunately, those Republicans in Congress who have been bought and paid for by the big corporations are choosing to fight for big oil and the big Wall Street firms instead of fighting to help the little guy on Main Street.