Daniel R. Cobb:
For several decades, the Republican Party has been spewing their dogma that all corporate taxes are bad, that American corporations are horribly overtaxed, and that massive corporate tax cuts are needed to stimulate economic growth. These statements are fabrications and distortions that rely on an American public too distracted or exhausted to see the facts. Donald Trump wants to cut the top corporate tax rate to 15%, but like every one of Trump’s plans, it has no basis in reality.
The top base federal corporate tax rate is nominally 35%. However the effective American corporate tax rate is, on average, slashed to less than 15% using corporate tax loopholes and deductions that congress, dominated by Republicans for decades, has put into place. This effectively puts America’s corporate tax rate well below the global average for developed economies.
The majority of American corporations pay no federal income taxes in any given year. A GAO study found that from the years 2006 to 2012, a stunning two-thirds of all American corporations paid no federal corporate taxes after all the deductions and loopholes. Even in 2006, well before the last recession began, a full 67% of all corporations paid no federal taxes. And even among corporations with at least $10 million in assets, in 2012, 42.3% of those paid no federal income taxes.
A perfect example is the drug company Pfizer. In 2014, Pfizer reported a $3.1 billion tax bill worldwide and an effective tax rate of 25.5 percent. However, the company currently earns billions on overpriced drugs made at its foreign subsidiaries, using American patents and sold to American customers, and pays no US taxes on those profits. Pfizer’s effective tax rate to the US government is just 7.5 percent, and all of this is legal though the myriad of tax loopholes congress has passed for companies like Pfizer. Do you really think Trump’s tax “reform” is going to kill all those precious corporate loopholes?...
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