Sunday, August 28, 2011

Nothing is Certain but Death, Taxes, and Republican Bull

So America has become uncompetitive because of the marginal corporate tax rate?  Is the marginal rate of 35% one of the highest in the world?  Absolutely, only Japan has a higher marginal rate.  Do other developed nations have much lower marginal rates?  You Betcha (ooops sorry): Ireland (12.5%), Germany (15.8%), and Canada (16.5%) to name a few.  But there is a big difference between marginal rates and effective rates in the U.S.  In Europe, they are one in the same, but in the U.S. the differences are enormous thanks to loopholes, credits, and offshoring.  Did you know that of the S&P 500, 115 paid tax rates below 20%, 30+ paid less than 10%, and some of the true tax masters include Southwest Airlines (6.3%), Boeing (4.5%), Yahoo (7%), General Electric (3.6%), Merck (12.5%), H-P (20%), and J&J (22%). 
GE gets special consideration for claiming a loss of its U.S. operations in 2009 due to losses at GE Capital while globally it earned $14.2Billion in global profits.  I guess having a tax department of 975 lawyers and accountants pays off, especially when many of them are former Treasury employees.
But are corporations paying less income tax as share of total federal tax revenue now?  Is Eric Cantor a weasel?  During the 1950’s the IRS collected 30% of its revenues from businesses, in 2010 it was down to 9%.  Well if corporations are people (thanks Supreme Court and Mitt Romney), then some people are making out a whole heckuva of a lot better than some others.  But we shouldn’t complain because they are the job creators right?
But don’t you fear; the Big People (formerly known as corporations) are willing to help us Small People out.  They are willing to bring back some of the $1.5Trillion they have socked away offshore provided Congress lowers the tax rate for repatriation and that way they can take these new mounds of cash and hire workers.  Praise the Lord; except why does this sound so familiar to me?  That’s right, the cynically named American Jobs Creation Act of 2004 that allowed U.S. Multinationals to repatriate their offshore cash and 92% ended up going to dividend payments and stock buybacks.  Fool me once assholes.

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