To Fix The Budget Deficit, Raise Corporate Taxes
Washington is a town currently gripped by deficit hysteria. Various commissions and congressional “gangs” have formed (and broken up) with the goal of crafting a plan to bring the nation’s budget into balance. Even the media has been sucked into this vortex, dedicating far more of its time to covering the deficit than other economic issues, such as unemployment.
At the same time, both parties seem to agree that the nation’s corporate tax code needs to be reformed. President Obama and House Budget Committee Chairman Paul Ryan each dedicated a portion of their respective budget plans to overhauling the federal corporate income tax, which is high on paper, but so riddled with loopholes, deductions, and outright giveaways that few corporations pay the full statutory rate (and several corporations pay no corporate income tax at all).
This, then, should be an excellent opportunity to kill the proverbial two birds with one stone: cleaning up the corporate tax code, lowering the corporate tax rate, and still raising more revenue that can be put towards deficit reduction.
But no.
Despite all the hyperventilating over the deficit, both Republicans and Democrats have said that they want corporate tax reform to be revenue neutral, meaning no more or less revenue will be raised by the new system than was raised by the old. President Obama and Treasury Secretary Tim Geithner have each extolled the virtues of deficit-neutral corporate tax reform. But if this is actually the road that’s taken, it will constitute a colossal missed opportunity.
At the moment, corporate tax revenue has plunged to historic lows. In 1960, the corporate income tax provided more than 23 percent of federal revenue; the Office of Management and Budget estimates that it will provide less than 10 percent this year.
During the 1960s, the United States consistently raised nearly 4 percent of GDP in corporate revenue. During the 1970s, the total was still above 2.5 percent of GDP. Now, the U.S. raises less than 1.5 percent of GDP from the corporate income tax. As the Congressional Research Service put it, “Despite concerns expressed about the size of the corporate tax rate, current corporate taxes are extremely low by historical standards.”
The United States effective corporate tax rate is also low by international standards (though the 35 percent statutory rate is the second highest in the world). There are plenty of reasons for this drop, but chief among them is the proliferation of loopholes and credits clogging up the corporate tax code (alongside the growing use of offshore tax havens and the ability of corporations to defer taxes on offshore profits indefinitely).
Huge corporations, such as ExxonMobil, have recently had years where they paid literally nothing to the U.S. Treasury, despite making huge profits. The New York Times made waves by finding that General Electric paid no federal income tax last year, instead pocketing hundreds of millions of dollars in tax benefits. Mega-manufacturer Boeing has done the same, paying no federal taxes in 2009 while collecting $132 million in tax benefits. Google last year had a 2.4 percent effective tax rate, while California-based Broadcom’s rate was just 1.4 percent, far below the rate that the average American pays.
The Treasury Department estimated in 2007 that corporate tax preferences cost $1.2 trillion in lost revenue over a decade. So there is ample room to remove credits and deductions (like those that benefit, amongst others, hugely profitable oil companies and agribusinesses), lower the statutory rate, while still bringing in more revenue. Some companies would see their taxes go up, but others would see their tax bills drop, and the corporate tax code would be more fair, efficient, and competitive, while ensuring that all corporations pay their fair share.
As the Center on Budget and Policy Priorities put it, “corporate tax reform is a solid candidate to make a contribution to fiscal improvement … Taking a major revenue source off the table for deficit reduction at the outset would be ill-advised.” Indeed, with corporate profits skyrocketing—up 81 percent over a year ago—and corporations sitting on trillions in cash reserves, there is no reason that corporate tax reform should be done in a way that is deficit neutral, besides the fact that raising more revenue will be politically difficult, as corporations will likely throw their considerable lobbying weight against such a move. But in the end, failing to raise additional corporate tax revenue will simply shift more of the deficit reduction burden onto a middle-class already battered by the Great Recession.
By: Pat Garofalo, U. S. News and World Report, May 25, 2011
The Continuing Fight Against Women: House Passes Amendment To Defund Medical Schools That Teach Abortion
Not content to defund health care for women, the Republicans in Congress, who just can’t stop obsessing about abortion, have now passed yet another bill, brought to us by the lovely Rep. Virginia Foxxxxxxxxx, to prohibit government funding of abortion. Only this one also bans medical programs that receive government dollars from even teaching students how to perform abortions. Because taxpayers shouldn’t have their hard-earned dollars spent on training doctors to provide health care to women.
And, in case we didn’t get the message the first gazillion times Republicans mentioned it, the amendment re-reiterates that taxpayer dollars should not be used to fund abortions. Which they aren’t.
But despite the endless parade of bills to make it really, really, really clear that taxpayers should not pay for abortions, Rep. Foxxxxxxxxxx still wanted to make it “crystal clear.” In case the bill they passed three weeks ago didn’t quite get the message across.
The measure is an amendment to H.R. 1216, the Republicans’ latest never-gonna-happen attempt to repeal the Affordable Care Act. Because nothing creates jobs like passing ideologically-driven symbolic measures to appease teabaggers and woman-haters everywhere.
Next up: a bill to ensure that taxpayer dollars are not used to repair roads that lead to medical schools that teach doctors how to perform abortions, and to re-re-reiterate that taxpayer dollars should not be spent on abortions. And then I’m sure they’ll get around to that jobs, jobs, jobs thing.
By: Kaili Joy Gray, Daily Kos, May 25, 2011
Unions Aren’t The Only Ones Targeted By Gov Walker
Is this really what Wisconsin voters had in mind last yaer?
Gov. Scott Walker believes a new law that gives gay couples hospital visitation rights violates the state constitution and has asked a judge to allow the state to stop defending it.
Democrats who controlled the Legislature in 2009 changed the law so that same-sex couples could sign up for domestic partnership registries with county clerks to secure some – but not all – of the rights afforded married couples.
Wisconsin Family Action sued last year in Dane County circuit court, arguing that the registries violated a 2006 amendment to the state constitution that bans gay marriage and any arrangement that is substantially similar.
With no real understanding of the state constitution or the anti-gay measure approved in 2006, I can’t speak to the merits of the constitutional argument in any depth. But as E.D. Kain noted, “Walker is literally going out of his way to prevent two people in a loving, committed relationship from visiting one another at the hospital. In other words, at what is quite likely a couple’s darkest hour, Scott Walker wants to impose legal restrictions barring two people from being with one another. Imagine that your wife or your husband was in the hospital and you were legally prohibited from visiting them. Is this the role we want our government to play in our lives?”
Doug Mataconis added:
I won’t speak to the legal side of this issue because I’m not up to speed on it, but I really have to wonder what kind of person would seek to prevent two people who are in a relationship from making whatever arrangements they want to allow the other to visit them in the hospital, and what right the state has to tell hospitals that they cannot honor those requests.
Is the GOP hatred for gays so pervasive that they could really be this cold and heartless?
Apparently, yes. Cruelty, in some circles, is a “family value.”
For months, it’s been assumed that Scott Walker’s agenda was primarily focused on punishing school teachers and other state workers. We’re now learning his hostility for some of his constituents is broadening.
By: Steve Benen, Contributing Writer, Washington Monthly, May 19, 2011
Recall Arizona… From The 19th Century
The dictionary definition of insanity should be changed to spell A-R-I-Z-O-N-A and its state capitol building should be designated as a home for the criminally insane. But lest we kid ourselves, this Arizona insanity has now spread nationwide. Let’s take a tour of the [police] state.
On the educational front, Tucson Unified School Superintendent, John Pedicone, has managed to militarize school board meetings. He has done this because several weeks ago, the high school group UNIDOS, tired of having their Mexican American Studies program targeted for elimination, chained themselves to the school board members chairs, prompting the board to cancel its meeting. For this, the students and others have received death threats. At the subsequent May 3rd meeting, officially, some 100 police officers were deployed to the TUSD headquarters. However, on top of TUSD security guards, including those staffing metal detectors, along with bomb squad officers, helicopters, plus riot squad officers deployed inside and around the building and neighborhood, it is likely that the officers totaled closer to 200.
At this meeting, seven people were arrested for the criminal act of attempting to speak to the board. One elderly and disabled professor, Lupe Castillo, 69, was arrested by some 20 helmeted and shielded officers for attempting to read ”A Letter from the Birmingham Jail” by Martin Luther King Jr. The other arrestees were [secretly] sent to two jails before they were booked and released. In the action inside, dozens of riot squad police physically threw other people out the building, including elders, this while hundreds of MAS supporters outside stood their ground. Then later, the violence, caught on videotape, started behind the building. Police officers in full riot gear began throwing young students, parents and other community members around like rag dolls. Officially, the officers did a great job, commended by the chief of police.
All this is the calm before the storm, precipitated by a 2010 law (HB 2281), purportedly inspired by Martin Luther King Jr, that has declared the teaching of Ethnic Studies illegal. This week, an audit ordered by the state schools superintendent, John Huppenthal, who ran on the campaign to “eliminate La Raza” (the Mexican people) – is scheduled to be released, with expected pre-ordained findings that will declare Tucson’s highly successful MAS program to be out of compliance.
That’s from the sane part of the state. Now, from the insane sector:
This past week, the governor signed SB 1404, a law that attempts to wall the state from the rest of society. Not satisfied with the federal walls that line the U.S./Mexico border, Arizona will soon be embarking upon creating its own wall along the Arizona/Sonora border, financed through online donations and built by prison labor. Being that imprisoning migrants is a growing multi-billion dollar industry, look for the state to employ incarcerated migrants to attempt to build it.
Beyond the state’s 2010 (SB 1070) racial profiling law, this year, state legislators attempted to pass nearly two dozen even more stringent laws, including one that would overturn birthright citizenship as guaranteed by the 14th Amendment. Legislators also attempted to pass two other laws that can only be construed as attempts to secede from humanity; SB 1443 and SCR 1010 were attempts to exempt the state from federal and international laws, respectively.
Most of this legislation is designed to incarcerate migrants and to enrich the private prison industry. The mastermind of most of this legislation is state senate president, Russell Pearce, who in addition to facing a recall, is also embroiled in the Fiesta Bowl “gift” scandal that threatens to bring down he and many of his associates.
And then there’s Maricopa County’s unindicted Sheriff Joe Arpaio, who continues to thumb his nose at the feds with his ongoing racially motivated mass dragnet raids. Recent investigations have found that in eight years, his department has misspent close to $100 million, and that his top commanders targeted “enemies,” confirming he is the most corrupt Sheriff in America. Federal investigations into his activities continue.
Outside of the state, the governor of Georgia recently signed HB 87, joining Arizona, Utah and Indiana in implementing anti-immigrant racial profiling laws. Twenty other states are pursuing a similar return to the 19th century. The good news is that Utah’s HB 497 anti-immigrant law, was recently blocked by a Utah judge, and the DREAM ACT has again been introduced in Congress.
Given recent dramatic events on the international front, it is generally thought that the president can now restore sanity and actually bring about actual immigration reform. Regarding Ethnic Studies, not sure he can do anything about those intent on “eliminating La Raza.”
By: Roberto Rodriguez, Professor, University of Arizona; CommonDreams.org, May 17, 2011
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