If there’s anything we need, it’s obviously to cut the corporate tax rate! The LA Times reports that we may be getting just that:
As part of their budget plan passed last week, House Republicans want to cut the corporate tax rate to 25% from 35%. The Obama administration and many Democrats also are looking to slice the current rate, but not as much.
Supporters of the corporate tax cuts say they’re needed to make U.S. companies more competitive with their foreign counterparts, and the administration and House Republicans say they want to offset rate cuts by eliminating unspecified loopholes and tax breaks.
Yet despite complaints that they fork over too much money to Washington, U.S. corporations have been paying an increasingly smaller share of federal taxes over the last half-century.
Nearly a third of all federal taxes came from corporations in 1952. Last year, they paid just 8.9%, according to government figures. Loopholes, credits and the ability to shelter earnings abroad have helped many of the country’s biggest companies pay far less than the corporate tax rate set into U.S. law.
What the corporate tax rate is on paper would be relevant if there weren’t massive loopholes that enable corporations evade taxes and pay as little as zero. Or in GE’s case, get a $3.2 billion tax benefit. Corporations are making record profits, but rather than turn those profits into capital and create jobs, they’re sitting on them or paying out massive bonuses to their CEOs.
There are a lot of things that could be done to improve our economy. Helping corporations pay a smaller share is most definitely not one of them. The fact that members of both political parties want to follow this destructive path just goes to show how little variance there is between them.