How Corporations Have Mastered the Art of Not Paying Their Fair Share of Taxes

How Corporations Have Mastered the Art of Not Paying Their Fair Share of Taxes

By Richard D. Wolff, Comment Is Free
AlterNet
Posted on February 21, 2011, Printed on February 23, 2011

Nothing better shows corporate control over the government than Washington's basic response to the current economic crisis. First, we had "the rescue", then "the recovery". Trillions in public money flowed to the biggest US banks, insurance companies, etc. That "bailed" them out (is it just me or is there a suggestion of criminality in that phrase?), while we waited for benefits to "trickle down" to the rest of us.

As usual, the "trickle-down" part has not happened. Large corporations and their investors kept the government's money for themselves; their profits and stock market "recovered" nicely. We get unemployment, home-foreclosures, job benefit cuts and growing job insecurity. As the crisis hits states and cities, politicians avoid raising corporate taxes in favour of cutting government services and jobs – witness Wisconsin, etc.

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US corporations resented that arrangement, and after the war, they changed it. Corporate profits financed politicians' campaigns and lobbies to make sure that income tax receipts from individuals rose faster than those from corporations and that tax cuts were larger for corporations than for individuals. By the 1980s, individual income taxes regularly yielded four times more than taxes on corporations' profits.

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General Electric (GE) deserves special mention. The New York Times reported that its total tax payment amounted to 14.3% over the last five years. Citizens for Tax Justice corrected that down to 3.4%, as the profits tax it paid in the US. Thus, GE paid a far lower tax rate on its income than most Americans paid on theirs. In 2009, GE received a huge $140bn bailout guarantee of its debt from Washington. By choosing GE's chief executive, Jeffrey R Immelt, to head his economic advisory panel, President Obama effectively rewarded the corporate programme: give us more and tax us less.

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http://www.alternet.org/story/149991/