That corporations large and small paid less than half the statutory tax rate in 2010, and much lower rates than in the half-recession year of 2009, casts doubt on whether corporate tax rate cuts are needed to improve global competitiveness.
At a minimum the new figures raise questions about whether good tax policy, or political exploitation of corporate rent-seekers, is driving the debate over corporate tax rates and whether it is really a debate over tax favors for corporations with Friends In Congress.
In a troubling sign that good politics has already trumped good tax policy, Baucus and Camp have asked fellow lawmakers to tell them which tax favors they want to retain.
This is sure to bring a deluge of campaign donations (and other favors for politicians,) as those fearing loss of their tax breaks dig into corporate coffers to protect them — a method of extraction facilitated by the Supreme Court’s 2010 Citizens United decision that made campaign donations as unfettered as political speech.
Paying a shrinking share of profits in taxes is just part of what corporate America buys with campaign donations and perks for politicians, and helps explain why many millions still struggle in the economic doldrums five years after the government rescued Wall Street from its own fraudulent sales of mortgage securities.
Oh, and don’t forget that government rules make it very hard to determine precisely how much those big, mostly publicly traded companies actually paid in taxes. Government rules require big companies to disclose to the dollar how much they put into each CEO’s 401(k) plan even though it may be only a few thousand dollars, but not the amount of federal corporate income tax on its tax return.
Keep in mind that while America has 5.8 million corporations, a relative handful of big companies dominate the economy. The 2,772 corporate giants with $2.5 billion or more of assets own 81 percent of all the business assets in America. The biggest of these — like Walmart, ExxonMobil and General Electric — rent lawmakers as needed.
Those rents – er, donations and perks – also ensure that those appointed to regulatory agency boards do well after they leave office, provided they have been good servants to corporate interests. Tricks like making customers pay taxes to monopolies that are exempt from the corporate income tax are one way that those appointed to regulatory boards will do well when they leave the government payroll, as my book The Fine Print revealed.
The corporate giants quietly lobby for laws and regulatory rules that get little to no attention in the mainstream news.
GE spent $39.3 million just on Washington lobbying in 2010, more than $73,000 per senator and representative.
ExxonMobil has spent on average almost $23 million annually lobbying Washington in 2008 through 2010. Walmart has spent between $6.2 million and $7.8 million lobbying Washington each year since 2008.
Lobbyists for these and other corporations have lawmakers on speed dial. As for you, just try to get a face-to-face appointment with your senator or representative. If you try, whether you succeed or fail, please tell me about it in an email to email@example.com.
Copyright 2013 The National Memo