It’s Time to Quit Whinin’ about U.S. Corporate Income Tax Rates

This piece engages the issues surrounding corporate income taxes based on contribution against return.

Anyone that does some casual research on corporate tax rates quickly finds that the United States has the highest published corporate tax rates, by percentage, in the world. Not only do we have the highest rates, but we also tax corporate profits made offshore, which contributes to many multi-national corporations leaving their earnings offshore. 

The illusion of high corporate tax rates and tax structure drives the corporatists crazy and is constantly a major point of contention concerning business growth, domestically and internationally. However, if information is placed in the proper context, the U.S. ranks fifth, in percentage, from the bottom for revenues generated by corporate taxes when compared to other OECD nations. (2011, Office of Management and Budget) The figures for 2011 percentage, when exemptions, deductions, incentives and credits are figured in, are about $1.0 trillion of the $2.2 trillion generated in total income tax revenues. This is a mere pittance when compared to the benefits that corporations receive.

The greatest benefit to native corporations is the United States over muscled and dominate military. Beginning with the Teddy Roosevelt Administration, it was understood that if the United States was going to participate in the rapidly growing global marketplace, that it would require a massive build up of capital line ships and naval forces. This was strongly promoted by “big business” as a means to protect national interests. A note: national interests are synonymous with business interests. Hence the well used phrase; “the business of government is business”.

The first fifteen years of the 20th century found the United States building up naval forces, occupying foreign territory; Philippines, Hawaii, Guam, Panama, just to name a few. The road to American Imperialism and world dominance had begun. World War I found the U.S. on the winning side and an open door to American growth and development.

The Great Depression provided a temporary setback, but American business remained intact, even though much diminished. The late 1930s found the U.S. in a prime position to build up industrial production, but to remain, figuratively speaking, insulated from the possibility and direct involvement with the coming war. The U.S. was the only major player prepared to directly benefit from such a war. By war’s end, even though the U.S. was dragged into the conflict by Japan, was the only industrial economy left intact.

U.S. business was prepared to rebuild the shattered nations and economies and it wasn’t by accident that the WW II military was left mostly intact. The Marshall Plan, although dressed as humanitarian relief, was also responsible to assure American business interests with the occupying forces as a foundation to maintain order.

The paranoid and dangerous Joseph Stalin set the agenda for the next 50 years, threatening the stability and well being of the capitalist west. With the Soviet Union armed to the teeth and arming every group willing to take up arms against capitalist interests, whether pursuing nationalism or Marxist ideology, it provided motivation for the United States to maintain and expand its marshal forces and become covertly involved all over the globe. However, the U.S. did not only protect its vital national interests (business) through efforts of it’s dominate military forces, but also assured dominance in vital governing authorities.

The United States dominance led to leadership roles in the United Nations, International Monetary Fund, NATO, World Bank, and a number of other governing bodies. To promote trade for U.S. export business, the government formed the Export-Import Bank of the United States (Ex-Im Bank) in 1934 by Presidential Executive Order. In 1945, congress passed the necessary legislation to make it a permanent organization and it joined other OECDs in an agreement to regulate a level playing field, giving no one nation an advantage in financing. By 1968 it became a permanent charter that is renewed by congress every five years. The bottom line is that the U.S. based corporation receives immense benefits from the government and pays next to nothing for those benefits.

Total government spending has risen to an estimated 22 percent of 2012 GDP or $6.3 trillion, raising the alarm bells and calls for significant reductions in government spending. Of the total spending, the U.S. military accounts for nearly $1 trillion on its own and its chief beneficiary, corporations don’t pay enough in income taxes to even provide for the cost of the military expenditure, let alone other benefits gained from governments. (Sources: CIA National Status Report, GAO, and CBO) Any way one views it, corporations are getting a good deal, since the average citizen doesn’t receive a direct benefit as does business and is paying the majority of the cost.

How does it help the average citizen for the U.S. government to deploy an Aircraft Carrier Battle Group off another nation’s coast just to remind them that the U.S. is capable of backing up their national interests with an unrivaled force? In short, it doesn’t.

It’s time to stop whinin' about corporate income taxes and realize the bargain that corporations are getting and that the rest of society is paying for. If anything, it is time to force corporations to pay their fair share and if nothing else to cover the cost of the military.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Brian Dey May 13, 2012 at 12:26 AM
Lyle- That is really a flawed premise. I would argue that because of the research, development, innovation and technology, the military is able to have the hardware to protect the citizens, who in turn have the most to gain by the protection the military provides. So it is precisely the citizens who should foot the bill for the protection. Most of those hidden dollars you claim are put back into the corporations through research and development. Defense contracts have led to some of themost technilogical advances that benefit the average citizen. See the problem is that the left just plain thinks corporations don't pay taxes. If we profit, we pay taxes. The stockholders pay capital gains tax on their investments. The officers pay payroll taxes and the employees pay taxes. It doesn't take a genius to figure out the higher the tax, the higher the cost of the product or service, because the corps are going to pass it on to the consumer. Look at the gasoline tax. I think we all can agree that knocking the 43 cents in combined state and federal taxes would benefit the average citizen immensely.
Lyle Ruble May 13, 2012 at 12:41 AM
@Brian Dey...Please explain how it's flawed. My basic premise is that if we are going to have a huge military, then it has to be paid for and since business benefits the most, then they should pay for it and individual citizens could have their taxes lowered.
Brian Dey May 13, 2012 at 12:44 AM
How do they benefit the most? If you read my post, it can be argued that the citizen has the most to gain.
Richard Head May 13, 2012 at 01:16 AM
"How does it help the average citizen for the U.S. government to deploy an Aircraft Carrier Battle Group off another nation’s coast just to remind them that the U.S. is capable of backing up their national interests with an unrivaled force? In short, it doesn’t." The Dollar is the World's Reserve Currency - it is what is traded for OIL! OF course, that is now being challenged - which is why we find ourselves at odds with IRAN - It is why we invaded Iraq - Saddam was going to trade oil for Euros at his Oil Bourse; In Libya Ghadaffi was going to begin demanding Gold, therefore he had to be killed. The Dollar - is a FIAT piece of nothing issued by the Federal Reserve Central Bank - ONLY the principal is produced, never the interest - hence it is a debt-based money system. IT WILL COLLAPSE when economic expansion ends and credit isn't constantly growing. IT'S A FRAUD. The day Imported Oil stops coming to America is the day all our world's end - and the civil war begins. Collapse IS coming.
dave mc arthur May 31, 2012 at 05:35 PM
why does the government not listen to the voter,s and downsize themself, instead they always take a stand that school,s bugeting is always the first place they go . our school,s were to be paid for with lottery dollars


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