Advocates Want To Abolish Corporate Income Tax

August 18, 2008

The Facts

James Pethokoukis of US News & World Report and Scott Hodge of the Tax Foundation are advocating the abolishment of corporate taxes. They cite the US as having the second highest corporate tax rate in the world and that high taxes on corporations have proven it is the most harmful thing to economic growth. Pethokoukis and Hodge insist these taxes should be abolished so America can compete in the world market. But as Jared Bernstein with the Economic Policy Institute points out in the same interview, US corporations actually rank 4th from the bottom with countries that pay taxes when measured in actual taxes paid. This disparity of the two points is a result of the tax breaks and tax loop holes corporations enjoy.

My View

Point number one; if corporations do not pay any taxes, who’s to pay off the $10 trillion in debt we have – a debt that has been piled on by subsidizing these corporations and bailing out fail businesses (Savings & Loan failures of the 1980′s at a $1.4 trillion cost to tax payers, etc)? I notice these advocates for corporate tax abolishments without fail never want to talk about this problem. They seem perfectly alright with letting the wage earner finance the entire country, including all the perks, benefits, and protection these corporations enjoy in this country. Corporations should at least be willing to finance the military which has been so generous to them over the past 60 years.

As for the corporate tax being responsible for holding back our economy, that is about as much crap as I’ve heard in a while. The problem with the economy is the excess greed by our corporations, which has led them to move millions of American jobs away from America. Triple-digit, and sometimes quadruple-digit, profits above fair value is just not good enough for American corporations. As I have said before, corporations will not be satisfied until 100% of gross revenues stay in the boardrooms. Then they will be trying to improve on that by getting tax “rebates” from tax money paid by wage earners.

Point number two; corporations have the option of being incorporated or being a business. They choose incorporating because of the many major benefits that corporations have over businesses. Somewhere I seem to have heard that you have to take the bad along with the good.

Here’s a real question; if America is so bad for these corporations with our tax structure, why don’t they just move their headquarters to one of those countries that have one of those tax rates that is so appealing to them? Answer; because they know their actual taxes paid would be higher, they wouldn’t be protected, and wouldn’t have the good life the way they have in America. They certainly wouldn’t be running the country the way they are here, and they know that too. What they really want is to play-but-no-pay.