With election season heating up, the usual right-wing talking-heads are spouting the usual right-wing misinformation. They claim uncertainty, taxes, and the possibility of a Scott Walker recall (specifically here in Wisconsin), are the culprits behind businesses not investing and their threats of moving to a location with a more friendly business climate.
Jared Bernstein and Lawrence Mishel have dispelled the "uncertainty" talking point, "First, 'uncertainty' in this context refers to the Republicans argument that it's government and central bank actions -- taxes, regulation, fiscal/monetary policy, health care/financial regulation reforms -- that are holding back the economy, not any of that ill-begotten Keynesian stuff, like lack of customers, orders, investors. So how might you test for something like that? Well, what about actual investment? Investment in the current recovery has increased more than in it had at the same time period in the prior two recoveries and roughly the same as it did during the 1980s recovery. In other words, this recovery is far more investment-led than the recovery under the pro-deregulation George W. Bush administration. Private sector jobs, you ask? ...private sector job growth in this recovery looks much like job growth in recent recoveries, suggesting that businesses are not reacting to a new threat of potential regulations and taxes (the difference with this recovery is actually the loss of public sector jobs. And then, of course, there's what the business folks, as opposed to their DC reps, actually say about what's bugging them: ...the regular National Federation of Independent Business (NFIB) surveys of small businesses found that the most common answer to the question, "what is the single most important problem your business faces?" was 'poor sales.' And while a number of businesses also cited regulation, the numbers were not substantially higher than under Presidents George W. Bush or Ronald Reagan and were lower than under Presidents Bill Clinton and George H.W. Bush. None of this is to say 'uncertainty' is not a problem. But while conservative politicians are busy jamming their perennial tax cut/deregulate agenda into the current context, the thing that businesses are truly uncertain about is when they're going to start seeing some customers again."
Numerous sources have debunked the 'burdensome tax climate' drum the Republicans continually pound.
As David Kocieniewski notes, "But by taking advantage of myriad breaks and loopholes that other countries generally do not offer, United States corporations pay only slightly more on average than their counterparts in other industrial countries. And some American corporations use aggressive strategies to pay less — often far less — than their competitors abroad and at home. A Government Accountability Office study released in 2008 found that 55 percent of United States companies paid no federal income taxes during at least one year in a seven-year period it studied."
The Institute for Wisconsin's Future has a series, Who Does Not Pay Taxes?, which details the numerous Wisconsin businesses that are paying little to nothing in taxes. Kimberly-Clark, Brunswick, Rockwell Automation, Snap-On and S.C. Johnson are but a few on the list.
Citizens for Tax Justice (CTJ), in their latest research spanning 2008-2010, has uncovered that the 280 most profitable corporation shelter half of their profits from taxes. "The average effective tax rate for all 280 companies in the study over the three year period was 18.5 percent; for the period 2009-2010 it was 17.3 percent, less than half the statutory rate of 35 percent." "30 Companies average less than zero tax bill in the last three years, 78 had at least one no-tax year."
CTJ has also discovered that the U.S. is one of the least taxed developed countries. U.S. taxes are the third lowest among OECD nations. "In 2009, total federal, state and local taxes in the United States were 22.6 percent of our gross domestic product, ranking 26th among the 28 OECD countries for which data are available. Only Chile (18.2 percent) and Mexico (17.5 percent) had lower taxes."
And, as the Center on Budget and Policy Priorities has found, "Government and independent researchers have long pointed out that the top statutory corporate tax rate is an incomplete measure at best of the burden of corporate taxes. It does not take into account the generous depreciation rules, exemptions, deductions, and credits (some of which are sometimes termed “loopholes”) that corporations may be eligible for. Those special provisions lower corporations’ effective tax rate, or the share of their profits they actually pay in taxes, and do so in a way that creates different tax rates for different industries. These differential tax rates across industries are generally regarded as more harmful to economic efficiency than any burden due to the current top statutory rate."
Business basics - inputs, suppliers, customers, labor, transportation - are much more important for a business in their site location decision. Republicans continually push for lower taxes because it benefits their favored constituents - the top 1 percent. But these policies actually have hurt the rest of us.
If we've learned anything from the Great Recession it should be that companies can get too big...and then we're stuck preventing their failure. Do we want such monopolistically large companies having such sway and getting such favors from state governments? Due to this war among the states (the competition for jobs) the ante keeps increasing with every business threatening their current host state for subsidies with the threat to move their jobs to another state.
Taxpayers are being asked to cover the bills for big business (by allowing them to pay less in taxes alongside receiving billions in subsidies) whilst being asked to take lower pay, less health care, and to fund their own retirement. And taxes and regulations are never little enough for these right-wing freeloaders. They want more and more breaks while they expect workers to sacrifice more and earn less. At the same time, corporations are making record profits.
Here's hoping voters don't buy the Republicans' snake-oil at the next election and we continue righting the wrongs initiated by the Reagan revolution.
For Further Reading:
America's Corporate Tax Obscenity
Blackmailed Into Oblivion
Doing Development Right
Insincere Revenue Barons
Misdirection & Ulterior Motives
Taken For A Ride
WalMart Propaganda & Media Lapdogs
We Have A Revenue Problem
1 comment:
The students should go thru the exercise of evaluating candidates every year even if they are not yet allowed to vote. With this, when it's time to vote a person is more than capable of choosing the right person. Just like starting a new business, there should be an actual training and management.
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